How do Casinos Make Money on Roulette?
It shouldn’t come as a surprise that casinos are profitable businesses. For this reason, many players will be familiar with the term ‘’the house always wins.’’ The famous casino billionaire Steve Wynn always said: ‘’the only way to become rich off a casino is by owning one.’’
Online casinos also like to get their fair share of gambling profits. As more and more players are discovering the advantages of online gambling: a more extensive range of games, higher payout percentages, and open 24/7, share prices of online casinos are showing an upward trend.
Still, casinos, whether brick-and-mortar or online, essentially work the same. Casino games are offered with a built-in house edge. As long as players play long enough and bet often enough, the casino will continue earning money. Yet casinos earn more on some casino games than on others. This difference is due to a number of factors, including payout percentages, the house edge, variance, and popularity.
Which Casino Games Make the Most Money for the Casino?
Roughly speaking, every casino has two types of games: slots and table games. The latter can be further divided into live games and RNG software-based games and consists of blackjack, roulette, and baccarat. The casino earns by far the most from slots. It is estimated that around 60% to 70% of all casino revenue is generated by slots. Roulette and blackjack account for about 25% of the turnover, and all other games share the rest of the pie.
The large share of slots can be easily explained: the payout percentages are relatively low compared to table games, and the popularity of slots is enormous, mainly because players can win massive amounts on slots with small stakes. In addition, slots are easy to understand, and especially video slots have appealing themes, surprising bonus features, and impressive sounds and graphics.
The payout percentages of land-based slots and online slots are usually between 88% and 96%, which ensures that the casino has a very high house edge of between 4% and 12%. At high-quality online casinos, you can choose from hundreds, sometimes thousands, of different online slots.
However, as this guide is about roulette, we are not going to discuss how much casinos make on slots. One thing is for sure, though, table games have a lower house edge, thus producing lower returns for casinos compared to slots.
Roulette House Edge
Before we can answer the question of how casinos make money on roulette, we have to explain what the roulette house edge is. As roulette is a game of chance and because casinos need to make a profit to pay their staff, rent, electricity bill, etc., the game has a so-called built-in ‘’house edge.’’
This house edge is a mathematical advantage that ensures the casino wins in the long run. Note that although roulette features a house edge, it is still possible for players to become lucky and win in the short run.
European Roulette Odds
A European roulette wheel contains 37 pockets (the numbers 1 to 36 and a 0). However, all payouts are as if there were only 36 pockets in the wheel. For this reason, the house edge for the casino at roulette is 1/37 or 2,7%.
This house edge of 2,7% means that for every £100 you bet on roulette, you can expect to receive £97,30 back in the form of winnings. Now, you might wonder why the house edge is only so small.
The casino doesn’t need that big of a house edge because it has many players visiting its venue, and a whole lot of small earnings quickly add up. Additionally, the casino has the psychological advantage of not having to make the decision whether to continue playing or not after a winning or losing round; it simply takes all bets.
American Roulette Odds
American roulette, which is the most common roulette variant in Las Vegas casinos, uses a wheel with two zeros – a single and double zero. This increases the house edge to 5,26%. For this reason, we recommend players to always choose European roulette over American roulette if they have the choice (which they have at most online casinos).
French Roulette Odds
An even better roulette variant to play is French roulette. This version of roulette features favourable rules for the player, called La Partage and En Prison. La Partage comes into play when the ball lands on zero. Players then get half of their wagers back instead of losing their entire bets.
With the En Prison rule, players receive half of their wagers back whenever the ball lands on zero when they have placed even money bets like red or black, odd or even, or 1-18 or 19-36. However, they have to keep their bets at the same places for another game round.
The house edge at this type of roulette is only 1,35% because of these favourable rules.
Roulette Return to Player (RTP)
The term RTP is mainly found in online casinos. It is a crucial term to find out how online casinos make money on roulette. The return to player percentage shows the player what part of his or her bets will come back in the long run in the form of winnings. The RTP of slots is calculated over millions of spins. For this reason, it may very well be that a player playing just a few rounds ends up losing, while another player wins big in a single lucky spin.
The return-to-player percentages are calculated by, among other things, the test runs that are done by the game maker or software provider. First of all, one should know that the slot machine game works as desired and has been developed in the right way. However, this goes further than just the visuals we get to see as players. The random number generator systems behind the scenes must also be working correctly. Naturally, a casino software provider can set up this ratio all by itself. However, a lot of calculations go into this.
For roulette, the RTP is very simple as it is just 100 minus the house edge of the roulette variant you are playing (American, European, or French). For example, when you play European roulette, the RTP is 100 – 2,7 = 97,30%. For American roulette, the RTP is 100 -5,26 = 94,74%.
Why Players Lose More Money on Roulette Than They Expect
Many players who do know the roulette house edge and are familiar with the concept of return-to-player percentages still don’t really know how this has an effect on their bankrolls. Some of them expect that a 2,7% house edge on roulette means they can play for hours with £100 and log off or go home with £97,30.
Unfortunately, this is not really how it works. The thing they don’t grasp is that the house edge doesn’t apply to their total bankroll but to their total wagers. Let’s say a player bets £3 per spin and spins 40 times an hour for three hours. Although the player may win or lose here and there, the house edge ensures that the casino earns about £9,72 during the player’s session (£360 total bets, 2,7% of £360 = £9,72).
As you can see, this built-in house edge of the casino ensures that it will become difficult for the player to be ahead of the casino over the long run. It is this very reason that casinos want their players to keep playing.
Why Players Gamble Despite The House Edge
Now, you might wonder why players gamble or play roulette despite the house edge. Most players play for fun and the chance of winning some money. Almost every gambler knows that the casino has an edge, but they don’t always know how big this edge really is. If roulette has gotten the best of you lately, you may want to read our How to Stop Playing Roulette Guide.
FAQs About Roulette House Edge and Odds
What are the house odds on roulette?
The house odds on European roulette are 2,7% per spin. The house edges on American and French roulette are 5,26% and 1,35%, respectively.
Are roulette odds good?
If we compare European roulette’s odds of 2,70% with baccarat (1,06%) and blackjack (0,28%), they may look not so good, but when we compare them with slots, that typically have house edges between 4 and 12 percent, they are certainly decent.
Can the roulette house edge be beaten?
No, there is not a single roulette strategy that will allow you to beat the house edge.
What are the odds of 0 in roulette?
The odds of the ball landing in the 0 pocket at European roulette is 1/37 or 2,7%. In American roulette, where there is also a double zero, the chance of this happening is 2/38 or 5,26%.
What are the roulette odds on red and black?
The odds of winning even bets on red or black are 47,40% in American roulette and 48,60% in European roulette.