Understanding Casino Margin with Examples
What is Casino Margin and How is It Calculated?
If you want to win at casino games, you have to be lucky before anything else, but that doesn’t mean you have to leave everything to chance. You can find thousands of games on a site like the casino online GG.bet, but some of them will make you lose less and win more often. To find such games, simply pay attention to the casino margin: if you know what it is and how to use it, you can have a much more enjoyable and rewarding experience. Below, we explain everything you need to know about casino margin.
Two Important Terms: RTP and House Edge
Casino margin is also known as “house edge” and RTP (return to player) is an integral part of it. Therefore, it is best to start by explaining these basic terms. Every casino game in existence has an RTP and a house edge. These are simply values that determine how much you will win and how much you will lose, but neither is related to the chances of winning. Let’s start with the basic concepts first:
- If you make an investment of 100 EUR/USD and win 100 EUR/USD, you will get 100% of your investment back. You do not make a profit, but you do not lose anything.
- If you earn 101 EUR/USD for such an investment, you have made a 1% profit.
- If you earn 95 EUR/USD for such an investment, you have lost 5%.
These financial examples also apply to casino games. How much of your investment you recover will show whether you made a profit (or exactly how much you lost). To give a practical example:
- Let’s say you are playing a slot machine with an RTP of 97%. RTP and house edge are opposite concepts – if a game has an RTP of 97%, its house edge is 3% (the total should always be equal to 100%).
- This means that if a number of players deposit 1000 EUR/USD in this game, they can win back 970 EUR/USD in the long run. So, somebody may win all 970 EUR/USD, and others will lose all their investments. Or, all players can get a share of that $970 in different proportions.
- This 3% loss also determines the casino margin, i.e., how much the casino will win out of every 100 EUR/USD bet.
A game’s RTP is never 100%, and it is not possible for a game to exceed 100%. Otherwise, the casinos will not be able to make money. If a game had an RTP of 100%, you could win all your investment back in the long run – the casino wins nothing. If a game had an RTP of 105%, for example, it would be guaranteed to win 5 EUR/USD for every 100 EUR/USD investment, which means the casino would lose money, so it’s not possible too.
In short, the RTP of casino games is always below 100% – their rules are created to guarantee that. Currently, single deck blackjack has the highest RTP of all casino games: 99%. Depending on the optimal gameplay and the strategy used, this rate can go up to 99.50% and slightly higher, but it will never be 100%. To give you an idea, below you can see the average RTP values of the most popular casino games. If you subtract these numbers from 100, you can also see what the casino margin is for each.
- Slot games – 95.00%
- Roulette – 97.00%
- Baccarat – 97.00%
- Poker – 98.00%
Remember that these are average figures and are subject to change based on the variants you play. For example, the RTP of roulette can be as low as 94.00% if you are playing the American variant or as high as 98.00% if you play the French variant.
How to Calculate Casino Margin?
Casino margin and RTP are calculated differently for each game, there is no single formula that applies to all games. Let’s give an example using European roulette:
- This variant of roulette has 37 numbers on the wheel. The game result can only be a single number.
- This simply means 1/37, resulting in 0.0270, or 2.70%.
- This figure is the casino margin. Therefore, the RTP of this game will be 97.30% (100 – 2.70).
Calculating casino house edge is not an easy task and can be quite difficult in games with almost infinite possibilities such as slots. Therefore, we recommend simply checking the paytables of the games: the RTP values are indicated in these tables, and you can easily calculate the casino margin using these values.
RTP and house edge of games are calculated based on long-term gameplay (usually after 1,000 spins/round). In other words, it is not possible to see the effects of these values by playing a game for a short time. After 10 minutes, you can lose all your money or double your investment: none of them indicates that the house edge is high or low. These values show what will happen if you continue to play and complete an average of 1,000 games.
As a player, you should always prefer games with high RTP and low house edge. In general, this value should be at least 95%. Once again, note that these are not values for chances of winning. However, you lose less and win more often on a low-margin game.