House Edge -- Is It Really Required?

[xxjumperxx]

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that sounds greedy . gambling is a kind of business yes but many business does care and value thier costumers so why not gambling business can be that way ?  also business is a business , a business owner must agree that he can loose more than what he expects to earn  .  add in that his business was a literal gambling , so why not take risks .   house edge is not really required , i see a couple of gambling sites that have no house before  but right now , modern casinos already come up with an idea of putting a house edge

Of course they value their customers.
When you done have customers, you don't have any income. Its important to treat all the customers fair, with respect and make sure they are happy.
Of course running a casino or any business has its risks, from being cleaned out, from being hacked etc.
Why would a casino want to take a risk in giving up the house edge? For their customers?

Would you want to jeopardize your business which is running fine with a house edge just to make your clients happier?

Many Casinos try to give back with rewards and bonuses (but also to lure you in to play more)

Gambling is a business, just look at Vegas  

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[MCobian]

Because I am a businessman, I will look at the house edge from a business perspective. Which in my opinion is very important house edge
for casinos. One of the casinos income is obtained from the house edge, if there is no house edge I am sure casinos will not last long.For us
gamblers, we must understand that every casinos has a house edge, that's part of the profit for casinos.

[peter0425]

 How could you make any money with zero house edge? I mean come on, are you going to just left it to gods will and hope for the best? With zero house edge you are going to get either a player who makes as much money as possible without losing they will just bankrupt the casinos. Sure there is a chance they get unlucky and lose all of their money as well but you have to be insane to just wing it.

 There is no way a casino could operate without house edge, its their insurance and they will definitely continue with the house edge as well. Its required, its a must, it has to exist, otherwise there is point on starting a casino at all.

Exactly.
Noone is running a casino out of the kindness of their heart.
Its a business and that business is here to make the owner money.
Simple as that.

that sounds greedy . gambling is a kind of business yes but many business does care and value thier costumers so why not gambling business can be that way ?  also business is a business , a business owner must agree that he can loose more than what he expects to earn  .  add in that his business was a literal gambling , so why not take risks .   house edge is not really required , i see a couple of gambling sites that have no house before  but right now , modern casinos already come up with an idea of putting a house edge

Because gambling is too far from other Business,In gambling there are people that must lose their money without getting product or anything in return while in other business we can at least take what we want to have before going home.

So in this sense yeah there are greediness and some cheating if needed(but of course i don't put words into them,only some occasions lol)

[Mauser]

Because I am a businessman, I will look at the house edge from a business perspective. Which in my opinion is very important house edge
for casinos. One of the casinos income is obtained from the house edge, if there is no house edge I am sure casinos will not last long.For us
gamblers, we must understand that every casinos has a house edge, that's part of the profit for casinos.

For an online casino, what other sources of revenues do they have if not an house edge? If they would only run games with payouts exactly in line with there probability of winnings, the casino wouldn't make any money in the long run. But they still have to pay their employees, servers, maintenance, security, and so on.
Without any edge, the casino would just lose money every month. Better to give your money to charity then I think.

An alternative would be to fill your website with Ads. But who wants to play on casino where you are getting constantly pop ups? I wouldn't enjoy that.

[deisik]

Dont know if this line do really fits out " the sheer size of its bankroll will be the house edge on its own" No matter how big it is, it cant really be considered nor treated as an house edge

But that's how things turn out to be

In fact, it is not very difficult to show how the bankroll size can be an effective house edge in real life. Imagine you are tossing a coin with your friend. When you lose you pay them a dollar, if you win they pay you as much. Pretty simple setup, isn't it? And it looks like your chances are equal. And they are, at least as long as you toss a coin a couple times or so. However, if you have only 10 dollars while your friend 100, their chances of busting you are 10 times higher than yours busting them. This is the "house" edge that a bigger bankroll provides

True indeed but if your friend quit halfway while bagging 20% of your money, then what left is 80%.  That is just for one player, what about if you play with 80 players more and these players do the same tactics.  Then you will find out that your bankroll no matter how huge it is will become depleted

It is true even further

Your or my friend may quit halfway with 20% of our money, but that would work out only for a very limited number of players. If we take 80 players or even more, then it will be roughly half of them leaving with 20% of their money lost. But their loss is our win, no matter how you look at it. So, at the end of the day, given the irrationality of most players, those who don't leave halfway will end up losing all. Otherwise, it is "a zero-sum game" (read, 50-50)

Another thing, Casino establishment is a business so the owner wants to ensure that they will take profit no matter what happens and they see house edge as their advantage

The point is, I'm not sure that the house edge is any guarantee at all, at least as long as we take a real casino with real players. Variance and irrationality are these guarantees, hands down

[Saint-loup]

This is not entirely my idea, so, as they say, don't shoot the messenger

Let's imagine an extremely wealthy casino whose bankroll size by far exceeds the bankrolls of all its players combined. Will this casino need a house edge to earn profits? As I see it, the house edge would make for more revenue flow, but it will still be making profits with a zero house edge simply because it will be able to stay in the game longer than any other player. Put differently, the sheer size of its bankroll will be the house edge on its own

I know every casino wants money, and it is unlikely we will see something described above in real life. However, it would be interesting to hear about examples which follow the logic of the bankroll size being a house edge in and of itself. If you know of such cases, especially when the advantage of this kind is subtle or even deliberately disguised, please share them with the inquiring minds here. Don't hide your knowledge under a bushel

For which games are you talking about please? How it could work for dice games, slots and crash games for example?

[robelneo]

Exactly.
Noone is running a casino out of the kindness of their heart.
Its a business and that business is here to make the owner money.
Simple as that.

Although your chances are not really that high if you are playing with a house edge, we tend to ignore it and proceed, because the house edge is industry standard and we cannot consider it as cheating investors, I'm very much ok with house edge, we still see and read people winning, and most of all enjoying.but as always only gamble what you can afford to lose, so you cannot blame that you have been cheated.

[Ryker1]

Exactly.
Noone is running a casino out of the kindness of their heart.
Its a business and that business is here to make the owner money.
Simple as that.

Although your chances are not really that high if you are playing with a house edge, we tend to ignore it and proceed, because the house edge is industry standard and we cannot consider it as cheating investors, I'm very much ok with house edge, we still see and read people winning, and most of all enjoying.but as always only gamble what you can afford to lose, so you cannot blame that you have been cheated.

Well, even what games you play that has the house edge it is the same way of low odds, which means that your chances of winning in the casino are less than the odds of your winning the casino's money. But that is right, people tend to ignore those outcomes of losses because they think that the house edge in online gambling has a provably fair system which is you can trust by verifying on it, --but, don't expect that gambling is a form of a business which is you can easily earn a profit. The gambling industry was existed until now because of the business model in place designed to ensure its profitability, which means it is built for making a profit.

[deisik]

Let's imagine an extremely wealthy casino whose bankroll size by far exceeds the bankrolls of all its players combined. Will this casino need a house edge to earn profits? As I see it, the house edge would make for more revenue flow, but it will still be making profits with a zero house edge simply because it will be able to stay in the game longer than any other player.

Why Microsoft is not stopping about catching pirated copy of windows even they are one of the world's biggest corporate and their founder is top richest of world for consistently more than a decade

I don't really know

I don't know about how things have been for the last decade or so, but before that they were famous for very lax policies toward software piracy. As I can see, quite a few people in this thread come up with examples without checking or just caring about whether their examples have any bearing on real circumstances or events. Regardless, Microsoft or its policies against pirated copies of Windows have nothing to do with the topic raised here

Bill Gates is ready to donate millions to billion dollars for philanthropy purposes but never think about forgiving a licence issue which costs ~$150

We have already agreed that Microsoft was a poor analogy, up to a point of not being an analogy at all. But you are welcome to suggest a better one

[DarkDays]

I understand what you're saying, but you're basically arguing that they'll stand a better chance at turning a profit if they're betting against the player simply because they can outlast them.

This isn't the case really when you consider that people are playing with multipliers. They'd need to be tens of thousands or even millions of times larger than the max win amount possible from a bet allowed by the platform. Otherwise a large number of players would eventually turn the tides against the banker, even if they don't match their bankroll.

That said, I'd like to see a zero house edge casino that is instead funded by advertising revenue or a different business model. Not sure any currently exist right now.

[serjent05]

That said, I'd like to see a zero house edge casino that is instead funded by advertising revenue or a different business model. Not sure any currently exist right now.

This is indeed a good idea but considering the spam of ads, that might scare the players away.  I also wanted to see a zero house edge casino but without these advertising revenues .  Imagine playing a game when every 5 or 10 turns, ads pop up (I was talking about a mobile game), that is so irritating.

[deisik]

In order for a casino to be successful and profitable it is a must to have the house edge implemented.In the Op theory that the larger bankroll makes you stay longer online and play longer is not true in all cases.Some player can be smart and win a lot in poker making this casino lose all its bankroll

There's no house edge in poker

In poker rooms you play against other (allegedly) human players. In that case the casino just subtracts some percentage from the amount taken home by the winner. With that said, I agree that a smart player can take on a house edge provided by a bigger bankroll in exactly the same way as he can do on a regular house edge, and ultimately drain the casino's bankroll empty. It doesn't happen in real life for the sole reason most players are not reasonable at all (pardon the pun)

[dothebeats]

Survival of the fittest model, eh?

Relying simply on a huge bankroll to outlast the players isn't going to cut it. The house also need some profit in order to make it through and pay their employees' wages. If no house edge is imposed, it will be like charity on games wherein luck + house edge matters, e.g. dice. While they can 'last' longer than their players' burnt wallets, I can see no profits for them in order to motivate them to operate. Well, card games and other PVP games aren't affected by house edge but hey, most of the games on a casino are just you and yourself.

[freedomgo]

In order for a casino to be successful and profitable it is a must to have the house edge implemented.In the Op theory that the larger bankroll makes you stay longer online and play longer is not true in all cases.Some player can be smart and win a lot in poker making this casino lose all its bankroll

There's no house edge in poker

In poker rooms you play against other (allegedly) human players. In that case the casino just subtracts some percentage from the amount taken home by the winner. With that said, I agree that a smart player can take on a house edge provided by a bigger bankroll in exactly the same way as he can do on a regular house edge, and ultimately drain the casino's bankroll empty. It doesn't happen in real life for the sole reason most players are not reasonable at all (pardon the pun)

It's like a sports betting IMO, there is no house edge but you have to pay the commission if you win. Also, as a bookies, they also balance the bets so in the end they will still end up with a good commission, and that's the different with casinos as sports betting is specifically like a player vs player game, bookies are just the facilitators.

[verita1]

I did a search and found AGLC a charitable gaming model located in Canada.
Alberta manages licenses for charity activities related to the casino, raffle, bingo and pull ticket.
I see that Alberta is an organization that aims to reach big casinos and that they can create their charity events.

https://aglc.ca/gaming/charitablegaming/albertas-charitable-gaming-model

[deisik]

It can't possibly be a zero sum game for the simple reason someone is set to bust at the end of the day

How so ? If I play with 0.1% stake (or whatever) of my bankroll for each "bet", I can never go broke. And with no house edge, over a big enough sample size, my bankroll will be the same as to when I started playing

It's actually quite the opposite

I'm not sure what you mean by "a big enough sample size" (and while we are at it, there are issues with understanding what you mean by "a zero sum game" here as well). If by "never" you mean never in your life, then I would agree with you. If, on the other hand, you mean never as never on an infinite timeframe, then it is just a matter of time until someone busts, you or your opponent. You can bet 1 dollar out of 10 dollars and bust in a hundred bets, or you can bet 1 dollar out of 1 million dollars and still bust at a certain point in the future, no matter how distant it could be

(...) but it will still be making profits with a zero house edge simply because it will be able to stay in the game longer than any other player.

If you disallow Martingale and everyone plays with a proper money management*, there are no winners here, it's a zero sum game. Doesn't matter if the casino has gazillion times the bankroll of all their players combined

It is not a "zero sum game" in the way you mean it ("no winners here"). To repeat, on an infinite timeframe with finite bankrolls there'll be enough variance to take out everyone but the winner (as the winner takes it all). And someone with a bigger bankroll (read, a casino) has a higher chance to be that winner at the end of it since once you bust, it's a gameover for you (and your money)

[spike420211]

It seems that everything rests solely on the value of consumption.

In the current world, with the current spread of the "religion" of consumption and private property, one cannot expect that someone will do something just like that.

However, if you imagine that the owners of the casino do not need profit and have unconditional income from the state.
Then in this case, they may well have no reason to collect House Edge because they will not need profit.

[deisik]

My opinion about the house edge:

I think the house edge an extra opportunity for the casino owners of getting more profit from the casinos. And most of the players also take it easily, So why casino owners don't take this opportunity? They always looking for profits. So they will not remove the house edge from their site until the players start to avoid these casinos(which has house edge)

And the house edge of 1% seems to be a well established and widely accepted figure

I'm sure that wealthy casinos could make it even lower without incurring any losses, but it would likely raise unnecessary suspicions and concerns about the legitimacy of their operation. Really, we are all so used to the house edge that if we were to see a casino boasting a zero house edge, it would instantly trigger alarm bells among the gambling folks. And other casinos would be just as quick and happy to point a finger and then pull a trigger. So that's how the house edge came to be and will stay around

[Barnabe]

My opinion about the house edge:

I think the house edge an extra opportunity for the casino owners of getting more profit from the casinos. And most of the players also take it easily, So why casino owners don't take this opportunity? They always looking for profits. So they will not remove the house edge from their site until the players start to avoid these casinos(which has house edge)

And the house edge of 1% seems to be a well established and widely accepted figure

I'm sure that wealthy casinos could make it even lower without incurring any losses, but it would likely raise unnecessary suspicions and concerns about the legitimacy of their operation. Really, we are all so used to the house edge that if we were to see a casino boasting a zero house edge, it would instantly trigger alarm bells among the gambling folks. And other casinos would be just as quick and happy to point a finger and then pull a trigger. So that's how the house edge came to be and will stay around

I believe there are now safe methods to check if a casino is honest about its odds. If they can do that and let people verify their numbers there should be no problem.

[deisik]

A bunch of wily and artful gamblers can slowly but surely drain a casino's bankroll empty, and drive it out of business without any luck involved.

How? There is no way to "surely" drain a casino's bankroll, unless that casino is offering flawed games that can be cheated, such as blackjack with only one or two decks and not clamping down on card counting

No, I don't mean anything to that tune

I mostly refer to dice as I'm best familiar with this game and how things work in practice with it. If we have one casino (more or less provably fair) and 1000 players, all of them using a very safe martingale setup, within a limited time span, say, a year, they will drain the casino bankroll dry, even if some of them are set to bust based on their probabilities. In other words, their combined profits will exceed their combined losses, and it can and most certainly will be enough to drive the casino out of business. The keyword here is variance, and in this case it will be playing against the house and its edge

It can't possibly be a zero sum game for the simple reason someone is set to bust at the end of the day

A zero sum game is a game where the net gain and net losses by all participants is balanced - hence the sum of all gains and all losses is zero. Gambling is indeed a zero sum game, since the gains of the player are perfectly balanced by the losses of the casino, and vice versa. If my bankroll is $100 and I go bust, then I have lost $100, but as the casino has gained that $100, the sum is zero. It is a zero sum game

This is not how the term has been used here. It is used in the context of no one winning in the very long run on square odds