Many online Casino players frequently confuse the House Edge and the Hold Percentage which can affect the development of their gaming strategies. Here at Casinos.ca we get lots of questions about these two concepts, so we thought we’d help you to understand what they are and how they differ from one another.
The House Edge is extremely relevant to the Casino player. This is the built-in advantage that the Casino has on any one game (or a particular bet in a game) that would ultimately prove favourable to the Casino over time. The House Edge means that even if you play a flawless game, there is almost always a guaranteed advantage held by the House in any Casino game. That’s not to say you can’t win, but just that you need a bit of luck on your side.
The House Edge, for the sake of statistical analysis, assumes that the player is playing a flawless game and considers the payouts over the lifespan of the game. This means that although you might win a huge amount at one game in an evening, if you continued to play for an ongoing amount of time, the House would inevitably win overall. For example, if you bring CA$1,000 to a Casino and leave with CA$1,200 – not an unreasonable expectation – you’ll be leaving with 120% of what you wagered.
However, over time, if the House edge was something around 95% that would mean you’d only be leaving with 95% of what you had wagered. The House would claim the other 5% which is essentially how Casinos make their profit. On the other hand, the Hold Percentage is a crucial number that concerns the Casino. This is the percentage of purchased chips that are then returned to the Casino, irrespective of any built in gaming advantage. The Hold Percentage is a less theoretical concept than the House Edge as it looks at how much money is actually flowing in and out of the Casino.
The Hold is almost invariably higher than the House Edge, which means that in each game the Casino is making more money than it should. ‘Why is this?’ you ask. Simply, because most Casino players are not capable of playing a flawless game. The House Edge assumes perfect play from each player, whereas the Hold Percentage is proof that many Casino players don’t know quite what they are doing. In Blackjack, for example, assuming the player is not counting cards, the House Edge stands at about 0.5%. This means that, theoretically, players should leave with CA$995 for every CA$1,000 they spend.
Surely not a great result for the Casino. However in reality, most players at a Blackjack table are not experts and so where the House Edge might be 0.5%, the Hold Percentage is probably closer to 15%. This means that the Casino is in fact winning a lot more money from the average player than theory would suggest.