Calculating House Edge

Calculating the house edge or house advantage on most craps bets can be illustrated using cheques with the exception of the Pass Line/Come and Don’t Pass/Don’t Come as those calculations are more complex.

The house edge on a Place Bet 6/8 can be calculated as follows.

The 6/8 are bet in units of $6.00. With the true odds of 6:5 a $6.00 bet on the 6/8 should pay $7.20, but, it doesn’t. It actually pays $7.00. The sum of the bet, $6.00, plus what the bet should pay according to the true odds, $7.20, is $13.20. The sum of the $6.00 bet and the actual $7.00 payoff is $13.00. The difference between $13.20 and $13.00 is 20¢.

20¢ divided by $13.20 is 0.0151515 or 0.0152. When expressed as a percentage equals 1.52%. The house edge on a Place Bet 6/8 is 1.52%.

The house edge on a Place Bet 5/9 can be calculated as follows.

The 5/9 are bet in units of $5.00. With the true odds of 3:2 a $5.00 bet on the 5/9 should pay $7.50, but, it doesn’t. It actually pays $7.00. The sum of the bet, $5.00, plus what the bet should pay according to the true odds, $7.50, is $12.50. The sum of the $5.00 bet and the actual $7.00 payoff is $12.00. The difference between $12.50 and $12.00 is 50¢.

50¢ divided by $12.50 is 0.04. When expressed as a percentage equals 4%. The house edge on a Place Bet 5/9 is 4%.

The house edge on a Place Bet 4/10 can be calculated as follows.

The 4/10 are bet in units of $5.00. With the true odds of 2:1 a $5.00 bet on the 4/10 should pay $10.00, but, it doesn’t. It actually pays $9.00. The sum of the bet, $5.00, plus what the bet should pay according to the true odds, $10.00, is $15.00. The sum of the $5 bet and the actual $9.00 payoff is $14.00. The difference between $15.00 and $14.00 is $1.00.

$1.00 divided by $15.00 is 0.0666666 or 0.0667. When expressed as a percentage equals 6.67%. The house edge on a Place Bet 4/10 is 6.67%.

Now that we understand how to calculate the house edge or house advantage we can apply the same technique to the Big 6 & 8, the Field and all Prop bets.

Pictured below is the same photo from the "Why Place Bets Pay What They Pay" post which demonstrates visually why Place Bets what they pay and why the house edge is what it is.

The money on the line between the Field and Come represents the portion not paid on the bet. That amount divided by the sum of the bet and what the bet should pay according to the True Odds results in the house edge.

click on image to enlarge

Know thy game.

A dealer may not know the house advantage on bets and still be good enough to deal the game, but, a good dealer strives to be better than “good enough”. Knowing the house advantages is not necessary to physically deal a game, but, knowing the house edge is a part of your game knowledge.

A superior dealer knows their game.

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