If you play online casinos long enough, you will bump into two phrases over and over again: RTP and house edge. They sound like something from a maths exam, which is probably why most players skim past them and jump straight into spinning or dealing.
But here is the thing: once you actually understand these two numbers, casino games make a lot more sense. And you will stop wondering why your balance sometimes melts faster than your patience. RTP and house edge tell the same story from different angles. Let us break them down in plain English.
Player’s Cut & Casino’s Cut
RTP is the player’s slice of the pie. The house edge is the casino’s (or game’s) cut.
RTP
RTP stands for Return to Player. It is the percentage of all wagered money that a game is expected to give back to players over the long run.
Take a slot with 96% RTP. If you could simulate millions of spins, the game would return about £96 for every £100 bet, on average. The key words there are millions and average.
RTP does not care about your next 10 spins or your lucky streak last Tuesday. It is statistical, not personal.
House Edge
House edge is simply the opposite of RTP. It shows the percentage a casino expects to keep in the long run.
If a game has a 96% RTP, that means it has a 4% house edge. The maths always adds up to 100%.
House edge is the casino’s built-in advantage, baked into every game, from slots to roulette. It is not sinister. It is how casinos stay in business. You would struggle to keep your lights on too if players won every time.
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The Same Numbers Explained Two Ways
Here is the simplest way to understand the difference:
- RTP = how much goes back to players
- House edge = how much the casino keeps
They describe the same financial flow, just from different perspectives. One is player-focused, the other casino-focused.
Generally, house edge has been the conventional term for all games. Casinos used to be more traditional. Serious gambling was more or less focused on table games. With the proliferation of video slots, they quickly gained a lot more popularity.
Now, whereas games like blackjack, baccarat, poker, and roulette had house edges ranging from 1.4% to 2.5% for the most part, the developers of slot games were able to hook players with the “instant fun” vibe. This made it easy for them to make games with a very high house edge, because it was all quick fun with the potential promise of a jackpot.
As a result, the earlier games had house edges of 10-20%!
That would look bad in any online casino. Blackjack with 1.5% house edge vs. a video slot with 15% house edge. Slots would never gain serious popularity among regular players or those with deep pockets.
That is why the flipside was advertised instead. A game with 85% RTP sounds much better than a game with 15% house edge. And from there, rest is history. RTP became such a popular term that today, casinos even use the word RTP for table games, even though the house edge makes more sense.
But credit where credit is due.
Players also care about RTP because it tells them how “fair” or “generous” a game feels. Higher RTP means more money returned over time. Casinos care about house edge because it tells them how profitable a game will be. A 2% edge is low but great for building trust. A 15% edge is high but good for quick profits.
So developers advertise RTP to players, while operators calculate house edge behind the scenes.
Converting RTP into house edge is quite simple. Return to Player (RTP) and House Edge (HE) are two sides of the same coin and express the game’s long-term mathematical payoff structure. The formula for converting RTP to House Edge is simple:
House Edge = 100% − RTP
- Example 1: If a slot game has an RTP of 96%, its House Edge is 100% − 96% = 4%. This means, on average, the casino expects to keep 4 cents of every dollar wagered over the long run.
- Example 2: If a game has an RTP of 99.5%, its House Edge is 100% − 99.5% = 0.5%.
Examples: RTP vs House Edge Across Games
Examples: RTP vs House Edge Across Games
Let us take a look at some examples across different types of games.
- Slots: RTP varies widely (90 to 97% is common). House edge is whatever is left (3 to 10% typically). Slots rely on long-term averages, making RTP more important for players choosing which games to play.
- Roulette: European roulette has 97.3% RTP or 2.7% house edge. American roulette has 94.7% RTP or 5.26% house edge. Same rules, one extra zero, double the pain.
- Blackjack: RTP can reach 99.5% with perfect strategy. As a result, the house edge can drop below 0.5% in any cases. But make a few bad decisions, and the edge swings back to the casino fast.
- Baccarat: Banker bet carries a 98.9% RTP, so 1.1% house edge. Baccarat is one of the fairest games in any casino, which is why high-rollers love it so much.
But RTP Alone Is Not Enough!
RTP tells you long-term expectations, but it doesn’t tell you how the game pays out. A slot with 96% RTP could still be brutal if it has high volatility.
You might go 200 spins without anything exciting happening, then suddenly hit a prize that balances it all out. Same RTP, different journey.
That is why looking at RTP and volatility together gives the full picture. Or at least a clearer picture. Comparing between two similar volatility games with the RTP factor makes much more sense than just comparing two random games with different volatilities.
Why House Edge Always Wins Eventually
Even if you play smart and pick high-RTP games, the house edge eventually grinds you down if you play long enough. It is slow and subtle, but it works.
Players call it “cold streaks.” Casinos call it arithmetic.
Your best defence? Play shorter sessions, set limits, and walk away when you are ahead. You cannot beat the casino. But you can play on your terms. In fact, the only tactic better than any card game or gambling “strategy” is to just manage your bankroll better.
Lowest House Edge Games
The games with the best odds (lowest house edge) are:
- Blackjack: Can be as low as 0.5% or less with optimal basic strategy, depending on the specific rules (e.g., single deck vs. multi-deck).
- Video Poker (Full Pay): Some variants, like Full Pay Jacks or Better or Deuces Wild, can have a house edge well under 1% (sometimes as low as 0.46% with perfect play).
- Baccarat (Banker Bet): This bet has an edge of only 1.06% (a 5% commission is taken on wins, which is factored into this number).
- Craps (Pass/Don’t Pass Bets): These main bets have a low edge of around 1.36% to 1.41%. The Odds Bet has a 0% house edge, but it must be placed in addition to a main bet.
- French Roulette: Due to the “La Partage” rule (returning half of even-money bets if the ball lands on zero), the house edge for even-money bets is only 1.35%. European Roulette (single zero) is also low at 2.7%.
Short-Term Variance and Slot RTP Outcomes
Short-term variance (or volatility) describes how much the actual game results deviate from the theoretical RTP over a small number of spins.
|
Variance |
Payout Size/Frequency |
Short-Term Effect on RTP |
|
Low |
Wins are frequent but smaller in size. |
Actual RTP stays closer to the theoretical RTP even in the short term. Sessions are smoother with fewer large swings. |
|
High |
Wins are infrequent but potentially very large (like jackpots). |
Actual RTP can fluctuate wildly. You may experience long “dry spells” (actual RTP << theoretical RTP) or huge wins (actual RTP >> theoretical RTP). |
Variance determines the risk level for the player.
High Variance games require a larger bankroll to withstand long losing streaks while waiting for a big hit. In a short session on a high-variance slot, your personal RTP could be 0% (if you lose everything) or 500% (if you hit a huge jackpot).
The actual RTP will only begin to consistently align with the theoretical RTP over millions of spins, which is the long term.
House Edge vs. RTP FAQs
Are RTP and house edge the same thing?
Yes, they describe the same concept from opposite angles. RTP is the player’s return; house edge is the casino’s advantage.
Which casino games typically have the lowest house edge?
Blackjack has the lowest house edge with optimal strategy. Video poker can also be under 1% with perfect play. Baccarat (Banker bet) and Craps (Pass/Don’t Pass) are also low.
How to convert RTP into house edge for any game?
The house edge is calculated by subtracting the RTP from 100%. House Edge = 100% − RTP
How short-term variance affects RTP outcomes for slots?
High variance causes actual RTP to fluctuate widely in short sessions. Low variance keeps the short-term actual RTP closer to the theoretical RTP. Variance is the measure of the risk or swinginess of the game.
Which number should I focus on?
For players, RTP is easier to understand. Higher RTP generally means better long-term value.
Do RTP and house edge change during play?
No. They are fixed in the game’s programming and regulated by licensing bodies. Some casino games could have components that make the RTP higher or lower. For example, activating ante bets in some video slots or bonus rounds in certain live casino games can have different RTP values. But those values will be fixed for those rounds/situations as well.
Does a higher RTP mean more frequent wins?
Not always. RTP affects long-term averages. Volatility determines win frequency and size.
Which games offer the best RTP?
Blackjack (with perfect strategy) and baccarat. Slots vary, but titles above 96% RTP are usually considered fair.
