0% house edge Blackjack and 0% house roulette, what’s a difference in casino profitability?
Let’s say we all already agree that even with 0% house edge casino can be profitable. That is completely true, but not with all the games. With card games such as blackjack it is all good, but it is different story with roulette. In order to understand the difference, we need to dive deeper into a concept of house edge.
All gambling games have the advantage that the house (The person or company offering the bet) has over the players, it is called the edge. This usually varies from game to game, and to some degree, from place to place. The house edge is expressed through percentages. A 5% house edge means that, on average, you will receive back 95% of the money you bet over a period of time.
For example, if you were to bet $100 (20 bets of $5 each), you would, on average, have $95 left when you finished the run. In other words, if you bet on these conditions your odds are 5% lower than casinos.
You can watch this video explanation how does it work: https://www.youtube.com/watch?v=iQw0g-2GCQg
Now let’s separate different game categories. Games of PURE LUCK vs games of LUCK+SKILL.
For example, the roulette is a game of PURE LUCK — players don’t really have any options which can influence their edge against the house. Player decides on a bet size and amount of risk he or she wants to take. The wheel is then spined and it decides the final outcome. However, wheel has extra 1 or 2 green zeros which gives an advantage to the house and static probability edge over the long run. If roulette would take out green zeros and offer 0% edge there is NO WAY game can be profitable over the long run.
Blackjack belongs to a different category. It’s a game of LUCK+SKILL. Based on player’s gameplay, they can influence total outcome and house edge of the casino. That’s one of the reasons why this game has lowest edge from all casino games. Casino earns from imperfect gameplay and that’s quite a lot — 0.83%. Here you can read an extensive research on that: https://wizardofodds.com/image/ask-the-wizard/how-poor-are-bj-players.pdf
To illustrate this situation, let’s take an example:
House has a 6 card.
The player has 16.
The player wants to collect at least 17 and hits for one more card. — BAD MISTAKE.
The player just made a huge error, because, 12+ against 6 ALWAYS STAYS. (according to Blackjack basic strategy)
If player will play THE PERFECT game, without any mistakes in Edgeless casino, they can achieve 0% house edge, but that’s not the case for an average gambler.
An analogy can be taken from poker. A new player is playing against a Pro. Both have equal probability conditions — 50% vs. 50%. However, the Pro player makes better choices and the new player makes bad decisions, and in the long run, the Pro wins. In our case casino plays an ideal game, an average player does not — he loses over the long run.
The concept has not literally come out of the blue — discussions on zero edge casinos are already occurring in the community:
To compare some most popular games — take a look at this table:
To sum up, games that are offered by Edgeless casino are focused on LUCK+SKILL games so that casino can attract a lot of new gamblers and be profitable even with a 0% house edge. Afterwards, we plan to land decent amount of players who came for 0% house edge to bet on sports betting which has 4% ROI of wagered sums.
White paper: http://bit.ly/2jHIb7T