A Guide To RTP And The House Edge In Casino Games

The RTP (Return to Player) and house edge attached to a game significantly impact your winning potential. In this guide, we’ll show you exactly how these metrics work and how to use them to your advantage for improved win potential.

  • Learn What RTP And House Edge Means: We explain what these terms mean, how they affect a game’s outcome, and how they’re calculated.
  • Good Vs. Bad RTP: We provide benchmarks for low and high RTPs in slots, so you know which games to play.
  • When To Consider A Game’s House Edge: Get tips on when to consider a game’s house edge, along with standard figures for classic casino games.

What You’ll Learn In This Article

RTP And House Edge Explained

Both RTP (Return to Player) and the house edge are key metrics to consider when choosing a game and deciding on your wagering strategy. Let’s explore exactly what they mean and how to make decisions where they’re concerned.

RTP (Return To Player)

Although RTP applies to all automated online casino games, it’s most commonly discussed regarding slots. Because there are thousands of slot titles out there, RTP becomes a very handy metric to help you decide which games to play and which to avoid.

The most important thing to understand about RTP is that it’s a ‘theoretical’ measurement. This means that if you play the casino game long enough, you will theoretically get the stated percentage paid back to you.

However, the RTP stated for any slot game is calculated by an algorithm that mimics millions of spins to produce an average win percentage. Therefore, it’s best to view RTP as a long-term average, not a short-term promise as the results are never guaranteed.

You can find the RTP for any specific game using any of these methods:

  • Read Our Detailed Game Reviews: We give you all the key stats, including RTP ranges, for every casino game we review.   
  • Look at the In-Game Specs: Tap the ‘i’ button to bring up the game’s info panel or paytable, and scroll through to locate the RTP information.
  • Game Provider’s Website: Most game providers publish the RTP information for their games on their official websites.

Online casino software providers often build two or three RTP percentages into their games, and it’s up to each online casino to choose which one they offer you.

Therefore, you could play the same game at different online casinos and encounter a higher or lower RTP. That’s why shopping around and checking the RTP before playing any online casino game is a good idea. 

Top Tip

The Relationship Between RTP and Volatility

Volatility can dramatically impact your chances of winning, and it plays alongside RTP. High-volatility games tend to have larger but less frequent payouts, while low-volatility games offer smaller, more frequent payouts. Our expert article on volatility in casino games explains how volatility works and how to use it to your advantage.   

House Edge

Think of the house edge as the inverse of the Return to Player percentage. Like RTP, house edge applies to all online casino games, including table games and live dealer games, and represents the percentage of each bet the casino expects to keep over the long run.

The house edge is easily calculated by subtracting the RTP from 100%. For example, if a game has an RTP of 95%, we would subtract that from 100%, giving a house edge of 5%. This means that, on average, the casino will retain 5% of all the money wagered on that game over time.

The following online casino games have the lowest house edge:

  • Blackjack: If you can gamble using an optimal strategy, the house edge can often be as low as 0.5%.
  • Baccarat: The house edge is typically about 1.06% on the banker bet and 1.24% on the player bet.
  • Craps: The pass line bet has a house edge of around 1.41%. Specific other bets in craps, such as taking odds on a pass line bet, have no house edge at all, giving you better value.
  • Roulette (European): Features a house edge of 2.70% due to the single zero on the wheel. In contrast, with its additional double zero, American roulette has a much higher house edge of 5.26%.

Playing online casino games with a low house edge can significantly improve your chances of winning over time. A lower house edge means a more significant proportion of your wagers will likely be returned as winnings, providing better value and potentially more extended gambling time for your money.

A low house edge is typically considered to be below 2%, as seen in Blackjack and Baccarat. By contrast, games with a house edge above 5%, like American roulette and numerous slot titles, are considered to have a high house edge.

How RTP Is Calculated

Calculating RTP isn’t as simple as placing a few wagers and seeing what returns you get because all casino games are random games of chance. So, this approach would mean one gambler could hit a few wins and produce an RTP of 300%, while someone else could win nothing and create an RTP of 0%.

This is why RTP is based on the theoretical long-term performance of the game across millions of bets, not on short-term results.

The exact process online casino game developers use to calculate RTP goes like this:

  • Game Design and Mechanics: Casino software developers first establish the rules and mechanics, including paylines, symbols, bonus features, and multipliers, for each game. Then, they determine the potential outcomes for each spin.
  • Assigning Probability and Payouts: The developers will then assign specific probabilities to each symbol and combine these probabilities with the game’s paytable payouts for symbol combinations.
  • Mathematical Modeling: Things get more complex as the game developers use sophisticated models to simulate outcomes of millions or billions of spins. They calculate the expected return using the formula RTP=(∑(Probability of Winning Outcome×Payout for That Outcome))×100, ensuring all potential outcomes and probabilities are factored into the overall RTP.
  • Simulation and Testing: The game developers will finally conduct extensive testing and simulations to validate their RTP calculation. At this stage, the game design may be adjusted to meet the desired RTP target by tweaking symbol probabilities or the paytable.

What Is A Good RTP Vs A Bad RTP?

Before you jump in and gamble on any online casino game, it’s worth knowing what constitutes a good or bad RTP percentage. Below are some RTP benchmarks to help you decide which slot offer better potential returns.

  • 96%: This is the industry average percentage. Slots with an RTP of 96% return, on average, $96 for every $100 wagered over a long period.
  • Above 96.5%: Slots with an RTP above 96.5% we would consider good. These games provide better returns than the industry average, giving you a slightly higher chance of winning money.
  • Above 97%: Slots with an RTP above 97% we would consider to be great. These games are among the most favourable you’ll find due to having the best potential returns available.

Here are some additional things you need to be aware of when it comes to RTP.

  • Lowest Acceptable RTP: Although we always recommend shooting for slots with an RTP of 96% or higher, lower RTPs aren’t necessarily out of the question. You should also consider any jackpots and multipliers and weigh everything out.
  • Older Slots: Older slot games tend to have lower RTPs compared to newer titles. As the online casino industry has evolved, game developers have increased RTPs. Therefore, avoid games made more than ten years ago as they offer lower return potential.

Comparing The House Edge In Different Casino Games

Understanding the house edge across different online casino games can help you choose games that offer you the best odds and, therefore, win potential. The table below gives you the house edge for the main types of casino games to help you easily compare them. 

Casino GameHouse Edge
BlackjackTypically, around 0.5% when played with optimal strategy
BaccaratBanker Bet: 1.06%
Player Bet: 1.24%
European Roulette2.70%
American Roulette5.26%
CrapsPass Line Bet: 1.41%
Don’t Pass Bet: 1.36%
Three Card PokerAnte and Play: 3.37%
Caribbean Stud PokerAround 5.22%
SlotsTypically between 6% to 1%, depending on the RTP

Is There A Difference Between RTPs At Online Casinos And Games At Land-Based Casinos?

The short answer is yes.

Online casinos offer higher RTPs on slots and other games for the following reasons:

  • Operational Costs: Online casinos have significantly lower operational costs than land-based casinos. They don’t have the expenses that come with a physical location or staff wages, among other overheads. As a result, online casinos can afford to offer higher RTPs.
  • Casino Competition: The online casino market is increasingly competitive, so to help them stand out from the crowd and attract new gamblers, online casinos often provide games with higher RTPs.
  • Creating a Buzz: Online casinos can struggle to match the excitement gamblers experience at a brick-and-mortar establishment. Higher RTPs can help offset this by offering increased win potential to online gamblers.
  • Game Variety and Availability: Online casinos typically offer a wider variety of games and can easily update their game catalogues more frequently. This variety allows them to include more high-RTP games, catering to a diverse gambler base who are seeking maximum value.

In contrast to the above, land-based casinos have much higher operational and staffing costs. To recoup these expenses, they reduce the win potential on their games by lowering the RTPs.

The physical space limitations also mean that land-based casinos cannot offer the same extensive variety of games as online casinos, potentially limiting the availability of higher RTP games.

Top Tip

Play Live Dealer Games With the Lowest Possible House Edge

I bet you are keen to find online casino games with the lowest possible house edge. Without a doubt,  live dealer games are the way to go. Titles like Lightning Roulette from Evolution Gaming offer an impressive RTP range of 97.10% to 97.30%.  

When And Why You Should Consider A Game’s House Edge

Now that you understand how it can truly boost your online gambling, here are some key reasons and situations when you should consider the house edge:

  • Playing Skill-Based Games: When gambling on skill-based casino games like Blackjack or Poker, knowing the house edge helps you apply smart strategies to improve your odds of winning.
  • Applying Betting Strategies: Casino game strategies, such as Martingale or Fibonacci, rely on your understanding of the house edge to be effective. These tactics will help you manage your bets more effectively and minimise losses over time.
  • Extending Your Bankroll Longevity: By choosing games with a lower house edge combined with lower volatility, you can extend the longevity of your bankroll. This will allow you to gamble for longer periods and help to minimise dry spells.
  • Assessing Risk Levels: Different casino games come with varying levels of risk. Understanding the house edge helps you assess these risks and select games that match up with your risk tolerance.
  • Understanding Probability of Winning: A lower house edge indicates a higher probability of winning in the long run. This knowledge can help you avoid poor game selections and betting decisions.
  • Maximising Bonuses: You can make the most of casino bonuses by choosing games with a lower house edge. This, in turn, increases your chances of meeting wagering requirements and cashing out your bonus winnings.
  • Optimising Loyalty Program Benefits: Playing games with a lower house edge can help you optimise the benefits of casino loyalty programs. You’ll earn points and rewards while maximising your potential gambling returns.
Top Tip

Set Realistic Expectations

Remember, just because a game has a lower house edge, it doesn’t guarantee you a win. Each outcome in an online casino game is independent of previous results and cannot be predicted, so always play responsibly. See our responsible gambling guide for the lowdown on how to achieve this.   

FAQ

RTP stands for Return to Player and is a theoretical percentage calculated by simulating millions of wagers on a casino game, typically slots. It indicates the long-term payback you can expect from a game but isn’t a guarantee of winning.

House edge is the inverse of RTP, representing the casino’s expected profit from each bet over time. It varies by game, with Blackjack typically having the smallest edge at just 0.5%. Lower edges offer you better long-term win potential.

Yes. Online casinos have significantly lower operational costs, allowing them to offer higher RTPs to attract more players in the face of fierce competition. Therefore, online casinos give you better potential returns compared to gambling at a land-based casino.

RTP indicates the long-term payback percentage, while volatility measures payout frequency and size. High-volatility games offer larger but less frequent payouts, whereas low-volatility games provide smaller, more frequent payouts. Both will help you find games that match your risk tolerance.

About the Author

Hi, I'm Laura Simpson, the Chief Editor at climatesmart.citieschallenge.org - With hundreds of reviews and thousands of no deposit bonuses, climatesmart.citieschallenge.org is certainly your one-stop destination for free online gambling. Our bonuses are updated daily and we pride ourselves on providing the highest percentage of working bonus, worldwide.