An Introduction to House Edge
House Edge is the ratio of a player's average loss as compared to his initial bet. By knowing the House Edge of certain games or at times the House Edge of different bets in a particular game, players can make valuable betting decisions and gaming strategies.
One common misconception is that the House Edge is the ratio of the money lost as compared to the total money wagered by a player. That is not really true, nor is it really statistically possible for every player to be able to estimate the exact House Edge for every single bet he has made in a playing day.
The truth is that the House Edge is only based on the initial bet. Of course players may make additional bets other than their initial bets, and the House Edge may not be applied to these additional bets. When determining the House Edge the additional money wagered is not figured directly into the denominator. But that having been said, it doesn't imply that we don't increase risks when we make additional bets.
Why then is the House Edge calculated relative to the player's original wager and not to the player's average total wager? The big reason is that by calculating the House Edge relative to the original wager the player can easily make his estimates on how much he is going to lose.
Let's say, as a point of analysis, that a game's Hose Edge is at .6%. A player can then estimate pretty easily that if he wagers $10 he would eventually lose six cents average. Given this definition of a House Edge any player can thus only estimate how much it would cost him to play a certain game.
The data given in this definition of a House Edge does not reveal everything a player needs to know about measuring the risks. If a player would want to compare the risks between two casino games/ gambling games he does need more than just the House Edge to make a fairly accurate comparison. Another element a player needs to check other than the House Edge is the ratio of the money lost to the total money wagered.
Ties are not usually counted in a House Edge. This also becomes another important factor in making our comparisons other than just using the House Edge.
Nevertheless the House Edge is the simplest method to get an idea on how much a player may willing to risk. Some people totally shy away from games or bets with a high House Edge. But there will come those ever so adventurous players who love to gamble and take great risks.
Using the House Edge is a pretty straightforward way of determining the risks. And players who love to play with risks are surely welcome to try and gamble on the high road.