House edge for Casino, Sports betting and Lottery

Whenever you hear about Casino, Sports bettor (bookmaker) or Lottery, one thing that instantly comes into mind is a shortcut to becoming rich but with a risk. Players always want to make more money from these gambling agents. So it becomes essential for the player to know, what amount comes in his pocket, and how much goes into the agents pocket. The question is how they do earn while giving away a large chunk of money to the player?

Let’s learn how they do it.

House edge is the inbuilt profit commission for casino, sports bettors, and a lottery administrator. In simple words, the rate of commission charged on every gamble. Remember a simple logic, higher the house edge lower the winning amount for the player and lower the house edge higher the winning amount to the player.

So, we shall compare the house edge of Casino, an even-odd betting and a Pick 3 lottery game as major gambling categories. And find out which of the house edges is more beneficial from the players perspective.

Before that let’s take a basic equation to compute house edge of all three:

We can calculate house edge by subtracting an actual game winning from a fair game winning and divide the result by the fair game winning, finally multiplying by 100.

House Edge=

[(Fair game winning-Actual game winning)/ Fair game winning]*100


One of the most famous casino games is Roulette. It is a French word for “a little wheel”. European roulette has 37 while the American has 38 coloured and numbered pockets on the wheel, starting from 0. Players may choose to place bets on either a single number or on multiple numbers. Roulette is spun to begin the rush. When the spinning ball slowly loses its velocity and lands into the winning number. This game is famous for its simplicity and unpredictability.

Take an example of 38 friends playing roulette at home and each one places a bet of $1. Each one selects its number. The ball spins and lands into a number in the roulette, this will be the winning number. Individual having that number will be winning the bet and be ideally given $37 as price money. And when this number is taken over to a casino, the player actually gets $35. So, the house edge for roulette will be-

(37-35)/37*100= 2/37*100= 5.4%

This means that every time you spend a $100 on an offline or online casino roulette, $5.40 goes to the gambling agent (casino) and the rest is redistributed to the winners. House edge varies for different games played in the casinos. For example, the house edge of craps is 1.4%, making it one of the most favoured casino games by the players.

Evens Odd Sports Betting

This is again a very simple representative for the bookmakers category.  In this game, there are equal chances of winning for both the players. For example, wrestling match between two wrestlers, where both are strong contenders for winning the game.

A fair bet between two friends on each of the wrestlers as winners. If these two friends wager $1 each on the either players, the winner will earn $2. But, if the bets are placed through bookmakers, the winner will get only $1.91. Therefore, the house edge for even-odd betting will be:

(1-0.91)/1*100 = 0.09 * 100 = 9%

So, this is how they earn from the players itself. The house edge can be smaller than 9% to attract bettors on Internet since  sportsbook on internet offer odds higher than 1.91. However, there can be house edge higher up to 40% for those betting on big parlays.

Pick 3

The names of this lottery game may change from state to state. In this game, the player can select any three-digit number from 000 to 999. There are two ways for playing this game – Straight play or Box play. The player may either choose to play in straight or in box. A Straight play is when the player selects a specific number say for example 679 and wins if the drawn number is exactly 679. Whereas, in a box play, the player will win as long the number drawn consists a 6, a 7 and a 9 in any order (example, 976.). For sure, the winning amount will be more on the straight than that of a box.

Take, for instance in a fair game of 1000 players in a club bet on each number with $1. In all $1000 is collected and placed on as a winning price. The player is sure to win $999 in a straight play, when the lucky number drawn is his selected number. This is a fair game. But in state lotteries the winner will be given $500. There may be some variations in the amount, but $500 is more or less the standard amount. Therefore, the winner gets $499. The house edge will be-

(999 – 499) / 999 * 100 = 500 / 999 * 100 = 50%

That means you are wagering 50% of your money whenever you are playing a state lottery. That’s a quite big percent. 

So, from the above case studies of three major gambling categories – Casino, an even-odd betting and a Pick 3 lottery, we can say that Casino is the best choice for a gambler. Whereas, the state lottery is a possible “No” for the gamblers to put their money.

Roulette is a game of pure chance and luck. The lucky number which made a player win last time cannot be the same the next time. The wheel cannot bias at least! The same is with the lottery game. However in betting we can bet on a specific outcome of the game depending on the abilities of the sports player and sports handicappers.