Casino operators seem to share the common notion that as soon as a customer steps on their premises, all the money in his or her pocket belongs to the house. This may sound like an overstatement but it is true. It is only a matter of time before the gambler makes the transfer from their wallet to the house’s coffers.
Each game on the casino floor, be it a slot machine, roulette, craps, or baccarat, is designed in such a way so as to give the house a built-in advantage that causes gamblers to inevitably lose money in the long term. An exception can be made for certain full-pay video poker machines and the craps bets where you take or lay odds on your pass line and come/don’t come bets.
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Blackjack also carries a house edge but unlike most other casino games, here the casino’s advantage can be significantly reduced or even completely eliminated through the use of various advantage-play techniques. But even if one is not an advantage player, the game of 21 still offers the best possible odds you can find on the casino floor.
The House Edge – What Is It and How Does It Work?
The house edge (sometimes called “juice”, “vigorish”, or “vig”) represents the ratio of players’ expected losses in relation to their initial bet. It is commonly expressed as a percentage figure that shows you the average amount the casino will collect from players’ wagers over time. When a gambler says they are playing a game with a 2.70% house edge, what they mean is they are expected to lose $2.70 per every $100 wagered on average.
The house edge can be calculated as long as one knows what the true odds of winning with a given bet are. Suppose you and a friend of yours are shooting a six-sided dice on the street. You assume the role of the bank, collect $1 per bet, and pay your friend at odds of 3 to 1 if they correctly predict which of the six numbers will hit.
This payout puts your friend at a huge disadvantage. The true odds of your friend winning are 1 to 5, with implied probability of 1/6. You win five bets of $1 but pay your friend $3, which is to say you will collect $2 in net profits once in every 6 trials on average. You can calculate the edge you hold over your buddy in the following way:
(True Odds – Payout) / (True Odds + 1) = (5 – 3) / (5 + 1) = 2 / 6 = 0.333 * 100 = 33.33%
What this means is you get to retain around $0.33 per every dollar your friend bets, while they earn only $0.67. In essence, casinos do the same thing to extract advantage, i.e. profits, from their games – they adjust the payouts (or casino odds) in such a way so that the player always ends up losing a certain fixed percentage per unit wagered.
The House Edge Additional TipsThis is not to say you can never win in a casino. If it was so, no one would even bother playing casino games, to begin with. One peculiarity of the house edge is that it manifests itself over a large sample size of bets where hundreds of thousands of hands, dice rolls, roulette or slot spins are involved. So practically, the more bets you make, the more the house edge begins to manifest itself. Over the course of one million dice rolls, the chances of the edge you hold over your friend not manifesting itself are practically nil.
Of course, such a thing as variance exists, although some gamblers would prefer to call it luck. Streaks are an inseparable part of gambling, making it virtually impossible for your friend to win only once in every six trials. Sometimes it would happen so that they win or lose two, three, four or more times in a row. The bottom line is they will inevitably end up parting with 0.33% of the money they bet in the long run.
The Casino Advantage in Blackjack
Blackjack is a unique casino game because players are not combating a fixed house edge. Unlike roulette where the casino’s advantage remains a constant no matter what you bet on (an exception is made for the five-number bet in double-zero roulette), the house edge in blackjack varies throughout the course of the game.
It changes as the composition of the deck/shoe changes because small cards help the dealer while Aces and ten-value cards benefit the player. The casinos gain advantage over players by adjusting the playing conditions at their blackjack tables but we shall tackle this subject later.
Additionally, the house representative, the dealer, is always the last person at the table to act on their hand, which significantly adds to the casino’s advantage. When a player hits their hand and goes over 21 (and this happens around 28% of the time), they lose their bet even if the dealer busts afterward.
There is also around a 3% difference in the winning frequency rates of the dealer and the player, and guess who it benefits? The correct answer is the house, of course. It is estimated that in a fair game of blackjack, the probability of the player winning a hand is around 44% whereas the likelihood of them losing the hand to the dealer is roughly 47%. The remaining 9% account for the probability of the player and dealer pushing.
The Casino Advantage in Blackjack Additional TipsSo what is the casino advantage in blackjack? This question is a tough one to answer as the house edge for the game of 21 varies in different gambling establishments and may even differ from one blackjack table to another depending on the rules.
In blackjack, your playing decisions have a direct impact on the casino advantage as well. When optimal play is at hand, players can effectively reduce the house edge to as little as 0.36%, sometimes even less. Without strategic play, the casino advantage jumps to 2% when conditions are favorable but in some variations, it may be much higher.
Table Conditions and Their Influence on the House Edge in Blackjack
As we explained earlier, the playing conditions at blackjack tables have a pronounced effect on the house edge players are up against. The advantage the casino holds at a given table is, in essence, the sum total of the edges different rules yield.
Why Deck Number Affects the House Edge?
One of the first conditions a blackjack player needs to consider is the number of decks a game utilizes. Blackjack is played with one to eight full decks of cards. The house edge increases slightly with each deck that is introduced into play, which is puzzling to some players. The reason more decks equal more blackjacks.
But this line of reasoning is flawed. At the start of a fresh deck or shoe, the ratio of small cards to high cards is always the same whether you are using a single deck or eight decks. What causes the house edge to change on the basis of deck number then?
The casino may have the edge when it comes to win frequency but this is partially offset by the extra payouts players get for blackjacks and successful double downs and splits. When multiple decks are in play, blackjacks tend to occur slightly less frequently and vice versa, the fewer the decks, the more frequently do blackjacks occur. Note that the dealer also benefits from receiving more blackjacks when fewer decks are used. However, players are paid 1.5 times their initial stake whereas the dealer only receives even money when the player loses against their blackjack.
You also get more opportunities to execute successful double downs and splits when fewer decks are in use. This has to do with the effect of removing individual cards, which becomes less pronounced when you play with multiple decks.
Because of this, pitched games are considered the best option for players provided that the house has not changed their other rules. The chart below shows you how the house edge increases with each deck you add to the game. You will notice the player actually has a minuscule advantage over the house in single-deck games, but only on condition they implement perfect basic strategy.
|Deck Number||Effect on the House Edge|
The Dealer Drawing and Standing Rules
The fixed rules the casino has set for the dealers to follow also impact the house edge. One of the more common variations is a dealer standing on soft 17 (S17) as opposed to a dealer hitting soft 17 (H17). You can easily determine which of the two applies, as it is printed in large letters right across the table’s felt.
Rookie players are quick to jump to the conclusion that the H17 rule causes the dealer to exceed 21 more often. And indeed the dealer will bust on some of the hits they take on their soft hands. However, when they fail to bust, the H17 rule gives them a good opportunity to improve their total by pulling a small card, even more so if the deck/shoe has already been depleted of high cards. This improvement of the dealer’s soft 17 under the H17 rule happens often enough to give the house an extra advantage of 0.22%.
Allowed Doubling Totals
The more flexibility a blackjack player has when it comes to doubling on their two-card totals, the more the house edge drops. Doubling down gives you the great opportunity of increasing your wagers (and therefore, your profits) when your dealer is in a weak spot.
Some casinos would limit players to doubling only on two-card totals of 9 through 11, which takes away around 0.09% (0.11% in a double deck game) of the basic-strategy player’s advantage. Others would allow doubling only on totals of 10 and 11 which further increases the house edge by 0.18% (0.22% in a double deck game).
Splitting Pairs and DAS
Splitting pairs is another great way for blackjack players to extract more value from good situations when the dealer is at a disadvantage. Like doubling down, splitting gives you the chance to increase your action and generate more profits, which is why it is important for you to pick games where you can split and resplit to as many hands as possible. You will combat a lower house edge on such tables.
The same goes for the DAS rule (Doubling After Splitting) which gives you extra opportunities to increase your action in favorable situations and snatch some money from the casino’s vault. Some establishments effectively add around 0.14% to the edge they hold at specific tables by not allowing players to double on their split pairs.
The Surrender Option (or Its Absence Thereof)
While at the blackjack table, you will sometimes find yourself in a jam and the ability to bail out from such tough spots will definitely prove useful. This is normally the case where players have a starting total of 15 against the dealer’s 10 or a total of 16 against a dealer exposing 9, 10, or an Ace. Optimal play in these scenarios calls for using the surrender option because your chances of improving your total on the next hit are slimmer than those of busting.
The house edge decreases if players are allowed to surrender on any two-card total they like. There are two variations of this rule, pertaining to the situations where the dealer exposes an Ace. One is called “early surrender” (ES) and enables you to forfeit your starting hand in exchange for half of your bet before the dealer has peeked under their hole card for a blackjack. This gives you roughly 0.63% advantage but unfortunately, this rule is now rarer than a hen’s teeth.
Most casinos that offer the surrender option allow for “late surrender” (LS) where the player gets to forfeit their hand against the dealer’s Ace only after the peek. This is detrimental because if the dealer indeed has a natural, they will immediately reveal it, making it altogether impossible for you to exercise the surrender decision. Late surrender reduces the house advantage by around 0.08%.
The Payouts for Blackjacks
We have placed this rule variation last but it definitely does not rank last in terms of importance and impact on the house edge. Traditionally, the payout ratio for blackjacks is 3 to 2, which means you receive 1.5 times your stake when you get a natural. Thus, if you wager $100 and get a blackjack, the dealer pays you $150 in net profits in addition to your original stake.
However, many gambling operators have started to offer worse payouts at some of their tables where this valuable hand returns at a rate of 6 to 5. If you struggle with fractions, you will be like “What’s the big deal? Isn’t 6 larger than 3 and 5 larger than 2?”. They are larger alright but the same cannot be said about the payouts you receive for blackjacks at these tables.
In fact, the casino pockets $30 from every blackjack you get in this case, because the 6-to-5 payout returns 1.2 times your $100 bet and you get only $120 in net profits, which is a total rip off.
Some establishments will go as far as offering players even money for blackjacks, particularly in the situations where the dealer exposes an Ace, which is just as bad as accepting insurance. The latter is to be always avoided because it yields a house edge of 7.40% (5.88% in single-deck games).
Check the table below for a summary of the house edges the most common rule variations yield. Keep in mind these figures are valid for multiple-deck blackjack only. The minus sign indicates an increase in the house edge by said percentage whereas the plus sign denotes a decrease that favors the players.
|Rule Variation||Impact on the House Edge|
|Doubling Down on 9 through 11 only||-0.09%|
|Doubling Down on 10 and 11 only||-0.18%|
|Dealer Hits Soft 17 (H17)||-0.22%|
|No Resplitting Allowed||-0.04%|
|Hitting Split Aces||0.14%|
|No RSA (Resplitting of Aces) Allowed||-0.07%|
|Early Surrender (ES)||+0.63% (+0.72% in H17 games)|
|Late Surrender (LS)||+0.08% (+0.09% in H17 games)|
|Blackjack Pays 6 to 5||-1.71%|
|Blackjack Pays 2 to 1||2.26%|
|Blackjack Pays Even Money||-2.26%|
|No Hole Card/No Peek||-0.11%|
The Payouts for Blackjacks Additional TipsKeep in mind there is really no need to calculate the house edge on your own because some websites feature blackjack house edge calculators that can do the work for you. In order to properly use one such calculator, you need to know at least the most basic rules of the game you are interested in, the ones pertaining to deck number, doubling, splitting, DAS, surrender, the dealer’s standing or hitting soft 17s, and blackjack peeks. After you input these values in the calculator, it will automatically display the house edge corresponding to the game’s rules.
Positive vs. Negative Expected Value
It is of essential importance for a blackjack player to be able to figure out what expected value (EV) playing at a given blackjack table gives them. Expected value is nothing but a measure of the wins or losses you can expect per wager when betting on the same odds again and again. When a given game or bet type gives you negative expectation, you are doomed to lose money in the long run and vice versa.
We are mentioning this here because there is a direct connection between expected value and the house edge. In fact, whenever there is a house edge, your expected value will always be in the negative. The good news is blackjack is one of the select few casino games where players can completely overcome the casino advantage and enjoy positive EV but for the purpose, they must implement advantage play techniques such as card counting.
To calculate your EV, you must know the probability of winning and losing. The formula is the following: EV = (Amount Won * Pw) + (Amount Lost * Pl), where “Pw” stands for the probability of winning and “Pl” denotes the probability of losing.
Positive vs. Negative Expected Value Additional TipsLet’s see how the formula works in a hypothetical situation where a friend of yours offers you a $1 prize if you correctly predict which card they will pull out of a full deck. Only one card can help you out of 52 cards so your probability of winning is 1/52 while your probability of losing is 51/52 because there are 51 cards that result in a loss for you.
Your calculations will run in the following way: EV = (1 * 1/52) + (-1 * 51/52) = 1 * (-50/52) = -0.961. With blackjack, it would be easier for you to figure out the long-term payout percentage by subtracting the house edge of the game you are playing from 100. If you are playing against a 0.36% house edge, this means you can expect to win only $99.64 out of every $100 you wager in the long term.
The House Edge and Hourly Loss Rates
Knowing the house edge, basic strategy players can calculate their hourly loss rate, or the amount of money they are expected to pour into the casino’s coffers per hour depending on their action. It is worth keeping in mind you arrive at your expected hourly loss over very long periods of time. In the short term, your results may vary greatly from your hourly loss expectations.
You calculate your expected hourly losses by multiplying the house edge by the number of hands you play per hour, your action (i.e. the amount you risk per wager on average), and the number of hands you play per hour.
So if you are a basic strategy player and join a blackjack table with a 0.36% house edge, where you stay for an hour and go through 50 hands flat betting $10 per hand, your hourly expected loss on average will be because 50 * $10 * 0.36% = $1.8.
Your win rate is calculated in the same manner, only this time you multiply your advantage by your action (the number of hands and the average amount wagered per hand). Of course, to get an advantage in the game of 21, you need to master card counting or other advantage-play techniques.
However, recreational players can significantly reduce the casino’s edge by following perfect basic strategy. We go into further details on this subject in the next article of this guide where we introduce you to basic strategy, explain how and why it works, and provide a few tips on how to easily memorize the strategy charts.