House Edge and RTP: What Do They Mean?

When experienced players visit casinos, they go there with plans in mind. They know what specific games to target, how long to play and the money to spend. Essentially, they gamble like professionals.

That’s because casino games are wired like regular businesses. The risk of failure is high. So, you must have a robust plan to help minimize risks and maximize your potential. The reason slots, blackjack and roulette, carry risks is because of two terms: House Edge and RTP.

Here’s what they mean and how they impact your performance at casinos. Crucially, we also show you how to reduce the house advantage and to increase your winning potential. Sounds good? Let’s begin.

What is House Edge?

House edge describes the percentage of odds designed to give casinos a guaranteed profit over time. It’s the reason why casinos always win in the long run. It’s also the reason bets supposed to be 50/50—say odd/even in roulette don’t really have odds of 50%.

Ideally, everyone would want a casino's house edge to be 0%. But that's not the case, and it's alright. Instead, the objective is to find games with the lowest house edge, most 0.5% to 5%.

What is RTP?

Return to Player (RTP) describes the percentage of gambled money a slot machine pays back to winners as profits. A game designed to payout 97% of wagered cash has a 97% RTP. Interestingly, the remaining percentage (3%) is the casinos' house edge.

Because the goal is to keep the house advantage low, it’s essential to find games with the highest RTP possible. For clarity, NetEnt’s Mega Joker slot has the highest RTP at 99%. Most online slots have an RTP that ranges from 95% to 99%, which makes them more profitable than land-based machines.

How House Edge and RTP Impact your Profits

As mentioned, the house edge is how casinos make profits. And in all fairness, gambling operators are in the business of making as much money as possible. That’s why none of them give you games with a 100% RTP.

Instead, each game you find at an online casino is wired to favor the house. To win, you must know how to lower the advantage. According to the experts at ukcasino.org.uk, one of the best tips is to find games with a naturally low house advantage. These include blackjack, roulette and video poker.

How to Beat the House Advantage

There are only so many high RTP, low house edge casino games. Fortunately, there are several ways to beat the house even when its games don’t favor you. Here’s how.

• Variance/Volatility

Variance describes a game’s frequency of paying out money to winners. The term is mostly used in slot machines. A low volatile game pays out often but in small amounts. In contrast, a high variance game pays out substantial amounts of money but scarcely.

If you like to win regularly, you should choose low-variance games: Blood Suckers, Mega Joker, Thunderstruck II and 1429 Uncharted Seas, to name a few. Alternatively, you can choose medium-volatility slots like Gonzo's Quest and Twin Spin to win decent amounts. Or play high variance games for huge wins.

• Strategies

A betting strategy is a system used to increase a player’s chances of winning. Some strategies are so effective that every casino player is advised to know them. A case in point is Basic Strategy in blackjack.

By default, Blackjack has a house edge of 1%. But when you use the basic strategy, you can lower the house advantage to 0.5%. In case you’re wondering, this system dictates a handful of helpful tips.

For example, you should always split 8s and aces. You should stand at 12-16 if the dealer has 2-6. And you should hit when the dealer has 7-11, and you have 12 to 16.

• Bonuses

Slots, roulette, blackjack and poker are games of math. They come with a pre-calculated probability of winning and losing. This probability increases the more you play. And that’s where bonuses come in handy.

Bonuses give you money to increase the probability of winning. And isn’t that everyone’s ultimate goal? Unfortunately, not all casino offers are created equal. And as a result, you don’t want to accept every bonus out there.

Choose bonuses that can be converted to cash easily. That way, you can turn your bonus wins into withdrawable cash comfortably.

• Maximizing Bets

Why win less when you can win more? That’s the whole premise of maximizing casino bets. You want to make as much profit as possible when you win. Sure, you also risk more—and lose significantly more than someone who minimizes their wagers.

But as many experts admit, minimizing casino bets doesn’t amount to much. In fact, you only prolong your losses. But when you bet maximums, you ensure that any win you make will result in a decent amount.

• Budgeting

Can a budget help you beat the house advantage? In many ways, yes, it can. Here's how. Without a budget, you'll have no targets and goals. Instead, you play casually until you're bored or run out of money.

When you have a budget and goals, though, you play until you meet your targets or until you hit your budget. If you hit your targets, then you’ll leave the casino having beat the house. If you reach your budget, then you’ll have cushioned your losses for that day.

• Play Different Games

This is an often-underrated tip. Software developers are always creating new games. Some of these titles have higher RTPs, more in-game features and more generous free spins than what people play.

But for some reason, not everyone likes to switch games. Surprisingly, playing different games is an effective way of increasing your odds of winning. And that’s because you get to avoid games that don’t help you win.

According to successful gamblers, you should have a schedule for playing different games. If you’re not successful at a game, then you move to a different section. That’s how Las Vegas’ most successful poker players thrive. And you should try it too.

This article does not necessarily reflect the opinions of the editors or management of EconoTimes