How Casinos Make Money – House Edge, RTP & Variance

House edge

House edge is the percentage of every wager the casino expects to keep on average, in the long run. It is a mathematical property of the game itself, not a casino setting. European roulette has a single zero, which gives the house a 1/37 probability of every bet winning – that’s a 2.7% house edge. American roulette adds a double zero (00), which raises the house edge to 5.26%. Slot house edge is set by the game designer (e.g. 3.49% for Sweet Bonanza at 96.51% RTP).

RTP

Return to Player (RTP) is the inverse of house edge: the percentage of all wagers paid back to players over the long run. RTP + House Edge = 100%. A 96% RTP slot has a 4% house edge. For more on how RTP is calculated and audited, see are online casinos rigged?

Hold percentage

Hold percentage is what the casino actually keeps over a real time period (usually a month). It’s typically much higher than the house edge implies because of turnover multiplication: most players play through their wagers multiple times before withdrawing.

Example: you deposit $100 at a 96% RTP casino. After playing through your bankroll once, your expected balance is $96. If you then play through that $96 again, your expected balance is $92.16. After 5 turnovers, the expected balance is $81.5. The casino’s 4% per-spin edge has compounded into a 18.5% hold of your initial deposit. Land-based slot floors typically report 8–12% hold; online slot rooms 5–8%.

Variance and your real odds

Long-run averages don’t describe any single session. Variance – also called volatility – measures how spread-out individual outcomes are around the expected value. A high-variance slot like Sweet Bonanza can pay nothing for hundreds of spins and then 1,000x in a single feature. A low-variance slot pays small wins often. Both have similar RTP over millions of spins.

For a 100-spin session at $1 bets, on a 96% RTP slot, expected return is $96 (loss of $4) – but the actual range of outcomes (95% confidence interval) might be anywhere from $0 to $300+. RTP is a long-run statistic; variance dominates short sessions.

House edge by game

• Blackjack (basic strategy): 0.4–0.7%.
• Video poker (Jacks or Better, full pay): 0.46%.
• Baccarat (banker bet): 1.06%.
• European roulette: 2.7%.
• Craps (pass line): 1.41%.
• Slots (modern online): typically 3–6%.
• American roulette: 5.26%.
• Side bets, keno, scratch cards: 5–25%+.

For game strategy and rules see online blackjack strategy, online roulette, video poker and our full casino games guide.

18+ only. Gambling should be entertainment, not income. Set deposit and loss limits before you play. For free, confidential help in Canada call ConnexOntario (1-866-531-2600) or visit ResponsibleGambling.org.