| The house edge, which is the commission that a | | | | only $0.91, the houseedge of an even-odds betting will |
| gambling agent such as acasino, a sportsbook | | | | therefore be |
| (bookmaker), or a lottery administrator charges, is | | | | ( 1 - 0.91 ) / 1 * 100 = 0.09 * 100 = 9% |
| ayardstick that measures how a specific gambling | | | | So, this is how sportsbooks make a living. Since |
| game is fair and reasonable. | | | | several internet sportsbooks offer odds higher than 1.91 |
| It is one of the most important factors that every | | | | in order to lurebettors, the house edge could be smaller |
| player should consider whenever he/she is engaged in | | | | than 9%, which is one of the things that the bettor |
| any type of gambling, inasmuch as it indicates how | | | | should be looking for when searching for a sportsbook. |
| much of the money wagered goes to the gambling | | | | On the other hand, if the bettor iswagering on parlays |
| agent's pocket and how much is redistributed to the | | | | the house edge would be significantly higher than 9%; |
| winners. Indeed, a house edge cannot be zero since | | | | forbig parlays, it could go as high as 40%. |
| casinos, sportsbooks, and lottery administrators have | | | | It should be apparent by now that the gambler is |
| to make some money in order to cover their | | | | better off with casino gamesthan sports betting. It |
| expenses, and to make some profit as well. Yet, a | | | | should also be noted that while the house edge |
| high house edge simply means that the players are | | | | couldbe a major factor to consider while selecting a |
| unnecessarily being ripped-off, and as a result, any | | | | gambling game, it is by no meansthe only one. For |
| gambling game with a high house edge should certainly | | | | instance, one should consider the fact that casino |
| be avoided by aknowledgeable gambler. | | | | games aremostly games of chance, while sports |
| In this article, we shall compare, in the simplest | | | | betting also involves a learned decision inselecting a |
| waypossible, the house edges of a roulette, an | | | | pick, consequently leading to a higher probability of |
| evens-odd betting, and a Cash 3lottery game as | | | | winning a bet. |
| representatives of the three major gambling | | | | Cash 3 |
| categories. | | | | Depending on the state you are in, this lottery game |
| The Equation | | | | may be known by adifferent name such as Pick 3, |
| The easiest way to compute a house edge is to | | | | Play 3, Daily 3, etc. In this game, the playerselects a |
| compare the actual winnings that arepaid by the | | | | three-digit number from 000 to 999, and plays the |
| respective agents to the winnings that would be paid in | | | | number as a straightor as a box. A straight play is a |
| afair game or bet. A fair game or a fair bet is one in | | | | prediction that the number will come exactlyas |
| which no commissionis involved; an obvious model is a | | | | selected while a box is a prediction for the number to |
| game between friends. Therefore, inpercentage form, | | | | come in any order. Forinstance, if a player selects the |
| the house edge is obtained by subtracting an actual | | | | number 672 and plays it straight, he/she willwin if the |
| game winningfrom a fair game winning and dividing the | | | | number drawn is exactly 672. Instead, if the player |
| result by the fair game winning,finally multiplying by 100. | | | | plays 672 as abox, he/she will win as long as the |
| Thus, | | | | drawn number contains a 6, a 7 and a 2, inany order |
| House Edge = [ (fair game winning - actual game | | | | (276, for example). Obviously, a straight game pays |
| winning) / fair game winning ] * | | | | much morethan a box game for the same amount |
| 100 | | | | wagered. |
| Roulette | | | | Now consider 1000 friends (maybe in a club) selecting |
| Because of its simplicity and popularity, we shall | | | | a number as a straight,each for $1, so that all the 1000 |
| consider the roulette as arepresentative casino game. | | | | possible numbers are covered. When the |
| A European roulette wheel has grooves marked by | | | | winningnumber is drawn, the person who has selected |
| thenumbers 0 to 36; the American wheel (also called | | | | that lucky number will be deemed awinner and will |
| Las Vegas wheel) has anadditional groove marked as | | | | cash in all the $1000 collected, so making him win $999. |
| '00'. So, the European wheel has a total of 37numbers, | | | | This isa fair game. In the case of state lotteries, |
| while the American wheel has 38. Internet casinos | | | | however, the winner will be paidonly $500 in most |
| usually make availablethe option to select the type of | | | | states. Some states may pay a little bit less, others |
| wheel the customer prefers, but the brick andmortar | | | | may paya little bit more, but $500 is more or less the |
| casinos normally offer only one type. The winning | | | | standard. The winner thereforewins $499. The house |
| number in a roulettegame is the number corresponding | | | | edge for a Cash 3 game will therefore be |
| to the groove where a spinning ball lands. | | | | ( 999 - 499 ) / 999 * 100 = 500 / 999 * 100 = 50% |
| Now, consider a fair game in which 38 friends are | | | | This house edge applies not only to the Cash 3 game |
| playing the roulette at home,and each one selects a | | | | but also to all statelottery games such as Play 4, Cash |
| number and places a $1 bet on the number (no two or | | | | 5, Mega, Fantasy 5, Lotto, Power Ball, etc. |
| moreplayers wagering on the same number). When | | | | So, whenever you are playing the state lottery, |
| the ball is spun and lands in agroove, the number | | | | remember that you are wageringonly half of your |
| marking that groove will be the winning number. | | | | money on the actual lottery; the other half, you arejust |
| The person who has selected this winning number | | | | giving it away. Where this other half goes is not the |
| collects all the money on thetable thus making him win | | | | gambler's concern,since his/her main objective is to win |
| $37. On the other hand, if the game were conducted | | | | some money in order to pay the everpresent bills, or |
| ina casino, the winner would be paid only $35. The | | | | to get out of a miserable life, or to change his/her |
| difference between the twowinnings applied in the | | | | 20-year-old car. As regards contributing to education |
| above equation gives us the house edge of a roulette | | | | and other noble causes,there are other means of |
| gameas | | | | collecting money called taxes and charities. |
| ( 37 - 35 ) / 37 * 100 = 2 / 37 * 100 = 5.4% | | | | Unfortunately, many states do not allow casino games, |
| This means that every time you spend a $100 on an | | | | and furthermore,sports betting is illegal in the United |
| offline or online casino roulette, $5.40 goes to the | | | | States. The player is therefore leftwith no choice but |
| casino and the rest is redistributed to the winners. | | | | to cross state borders in search of a casino, or |
| Evidently, there are quite a number of casino games | | | | morerecently, to engage in online sports betting through |
| and the house edge variesfrom game to game, many | | | | the several offshoreinternet sportsbooks. Nowadays, |
| of them having a house edge less than that of | | | | there is a plethora of trustworthy onlinecasinos and |
| theroulette. For obvious reasons, a good gambler | | | | sportsbooks operating from Canada, the UK, Antigua, |
| always prefers games that have low houseedges, | | | | Costa Rica, andso on. |
| while the casino itself loves those games with high | | | | The Conclusion |
| house edges. For example,the house edge of craps is | | | | As far as the house edge is concerned, it has been |
| 1.4% which makes it one of the most preferred | | | | shown that casino gamesare the best choice for the |
| casinogames by the players. | | | | gambler. On the other end, any state lottery is apretty |
| Even-odds Sports Betting | | | | miserable game to play. Nevertheless, besides the |
| Again, because of its simplicity, we shall consider an | | | | house edge, there isalso the possibility of winning to |
| even-odds betting as arepresentative of this category | | | | consider. |
| of gambling. By even-odds we mean that the event | | | | Casino games, like lotteries are mostly games of |
| (usually a sports game) has equal chances of going | | | | chance; the player justselects a number or numbers |
| either way. An example is atennis match between | | | | and waits to see what luck brings him/her. There |
| two competitive players each of which has an equal | | | | isabsolutely no basis to prefer one number to others. |
| chanceof winning the match. | | | | Some people try to analyzepreviously drawn numbers |
| A fair bet, in this case, is just a simple bet between | | | | in order to see the trend and predict the next numbers. |
| two friends who justpick one of the tennis player as | | | | This strategy may work a few times, but not always. |
| winner. If these two friends wager $1 each, thewinner | | | | Keep in mind that it is theplayers, and not the machines, |
| will collect $2, thus winning $1. If instead the bets are | | | | who remember the previous numbers. In short, |
| placedthrough a sportsbook, the winner will collect only | | | | thepossibility of winning a roulette or the lottery entirely |
| $1.91, since the odds of anevens game at most | | | | depends on luck. |
| bookies and online sportsbooks is 1.91. If you are not | | | | While there is little or nothing that a roulette or a lotto |
| familiar with thedecimal representation of odds, 1.91 is | | | | player can do toinitially select a possible winning |
| the same as 10/11 in UK notation and | | | | number, the situation could be quitedifferent in the case |
| -110 in US odds notation. Odds of 10/11 mean that you'll | | | | of betting. With a lot of information and some |
| win $10 when you wager $11; and odds of -110 mean | | | | assistance fromsports handicappers, it is possible to |
| that you have to wager $110 in orderto win $100. | | | | predict the outcome of a sports eventwith more |
| Anyway, since the winnings paid by a sportsbook is | | | | certainty than predicting a Cash 3 number. |