The basic calculation
Suppose a wager has a 49% chance to win one unit and a 51% chance to lose one unit. Its expected value to the player is (0.49 × 1) − (0.51 × 1) = −0.02 units. The house edge is therefore 2%.
Use the edge as a decimal: 2% = 0.02.
If you put $500 of total action through that wager, the theoretical loss is $500 × 0.02 = $10. Your actual result could be a large win, a large loss, or anything between. Ten dollars is the average cost of that action over many repetitions.
Why one number can mislead
“Blackjack has a 0.5% edge” is incomplete. The payout for a natural, deck count, dealer soft-17 rule, doubling rules, surrender, and your decisions all matter. Likewise, craps contains many wagers with different prices, and a slot title may be offered in several RTP configurations.
A useful edge must name four things: the exact wager, the governing rules or pay table, the strategy assumption, and the denominator. Without them, a precise-looking percentage may not describe the game in front of you.
House edge is not hold
House edge is a mathematical expectation for a wager. Casino hold is an accounting result: money retained compared with buy-ins over a period. Hold is influenced by how long players continue, how often chips are recycled, and when they leave. The two measures should not be treated as synonyms.
What you can control
- Choose a lower-edge wager with clearly stated rules.
- Use correct strategy where player decisions matter.
- Reduce bet size, number of decisions, or time played.
- Skip side bets unless you have evaluated their separate pay tables.
What you cannot do is change a negative expectation by rearranging bet sizes. Progressions can change the pattern and severity of results, but not the weighted average value of the underlying wager.
This lesson explains general gambling mathematics and uses rounded examples. A game-specific figure applies only to the rules, pay table, strategy, and denominator stated with it. Last reviewed September 20, 2026.