TL;DR: House edge is the mathematical percentage advantage the operator holds over the player on each wager, equal to 100% minus the game's RTP.
What it means
House edge is the theoretical, long-run profit margin built into every casino game. A slot at 96% RTP has a 4% house edge; European roulette is 2.7%; American roulette 5.26%; blackjack with perfect strategy 0.5–0.7%.
In sportsbook, the equivalent concept is the "overround" or "vig" — the implied probabilities on offered odds sum to more than 100%, with the surplus being the house edge on that market.
Formula / How it's measured
House Edge = 100% − RTP (for casino games) House Edge = (Sum of implied probabilities − 100%) / Sum of implied probabilities (sportsbook)
Example: a slot returns $96 for every $100 wagered → 4% edge. A two-way market priced at 1.91 / 1.91 has implied probs 52.4% + 52.4% = 104.8%, so vig = 4.58%.
Why it matters for operators
House edge is the upper bound on theoretical GGR margin. Game-mix steering — pushing players from low-edge games (blackjack 0.5%) toward higher-edge games (slots 4%, side bets 6%+) — is the most basic casino product lever. In sportsbook, vig is the primary pricing tool; tighter vig (lower edge) is competitive but margin-dilutive.
Common benchmarks (2026)
- Slots house edge: 3–8%
- European roulette: 2.7%
- Blackjack (perfect strategy): 0.5–0.7%
- Baccarat banker: 1.06%
- Sportsbook vig (Tier 1 EU football): 4–6%
- Sportsbook vig (US props): 8–12%
Common mistakes
- Marketing low house edge to attract sharp players who erode margin
- Confusing house edge (% of handle) with operator hold (which includes variance)
- Designing high-edge games that churn players faster than they monetise
See also
- RTP — Return To Player
- Hold Percentage
- GGR — Gross Gaming Revenue