Casino Advantage in Blackjack

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.

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.

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.

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.

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%.

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 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.

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%.

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.

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.

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.