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House Edge Explained

The casino's mathematical advantage on every bet. Built into the payout table — not hidden, not magical, just a small percentage skimmed off every wager so the platform stays solvent. Here's how it actually works in crypto casinos.

TL;DR

House edge = 1 - RTP. If a game pays 98% of total wagering back to players over the long run, the house edge is 2%. The edge is built into the payout multipliers (e.g. coin flip pays 1.96× instead of 2×). It's a long-run average — short-run variance dominates.

What house edge actually is

House edge is the expected percentage the casino keeps per dollar wagered, averaged over infinite play. If you wager $100 on a game with a 2% house edge, you're expected to lose $2 over the long run. Not necessarily on this hand — variance dominates short-run outcomes — but over thousands of hands, the law of large numbers takes you there.

The flip side of house edge is Return To Player (RTP). RTP = 1 - house edge. A 2% house edge means 98% RTP. They describe the same thing from opposite directions.

How edge is built into a game

Easiest example: a fair coin flip should pay 2× (you bet $1, you win $1 in profit on heads, lose $1 on tails — expected value = 0). Casinos can't survive at 0 expected value, so they shave the payout. AgentBet's coin flip pays 1.96× — a small 2% trim. That's the entire house edge mechanism.

For dice with adjustable win zones, the formula is payout = (100 / win_chance) × (1 - house_edge). A 50% win chance with a 2% edge pays 1.96×. A 10% win chance with a 2% edge pays 9.8×. Same edge, different chance, different payout.

For more complex games (Plinko, Mines, Keno) the edge is built by scaling the entire payout table by (1 - edge). The probability distribution of outcomes is fixed; the multipliers we publish are the fair multipliers times (1 - edge).

What edges do real crypto casinos run?

Industry norms for crypto-native, no-KYC casinos:

AgentBet's default edge is 20% for grinding games and admin-tunable per game, clamped to [0, 40%]. The current configured edge per game is published in each game's info panel and visible to admins on /admin/settings.php.

Why some games have higher edges

Two reasons: 1) Variance — games with very high max payouts (Keno can hit 1000×+, Plinko outer slots are similar) need a higher edge to absorb the tail risk that the house occasionally pays out a 9000× hit on minimal volume. 2) Operational cost — games with more compute (Plinko's physics, Crash's real-time chart) consume server resources, and that cost has to come from somewhere.

RTP vs. winnings — the variance trap

A 98% RTP does not mean you'll get $98 back from every $100 you wager. It means the casino expects to pay out $98 to all players combined for every $100 wagered, over the very long run. Your individual outcome is dominated by variance. Some players will win big; many will lose. The average is RTP. The distribution around the average is wide and skewed.

This is why bonus wagering requirements matter. A 10× wagering requirement on a $25 bonus means you must wager $250 before the bonus converts. At a 2% house edge, you're expected to lose $5 over those $250 of wagering. That's the casino's built-in cost of giving out bonus money.

How to verify the house edge

Three checks: 1) Read the published edge per game (we publish ours per game in /admin/settings.php and in each game's info panel). 2) Compute it from the payout table — for Coin Flip, edge = 1 - (multiplier / 2). For Dice, edge = 1 - (multiplier × win_chance / 100). 3) Empirically estimate over many bets. Track total wagered, total returned. The ratio should converge to RTP. If it doesn't, you have evidence.

Provably fair guarantees randomness, not edge honesty. The casino can publish a 2% edge but actually implement 5%. The way to catch this is the third check — verify empirically that bet outcomes match the distribution they should under the published rules.

Common questions

Is a lower house edge always better for the player?
Long run, yes. Short run, no — variance dominates. A 1% edge game still loses money in many sessions. A 5% edge game still wins money in many sessions. The edge tells you the long-run drift; your actual session outcome is mostly luck.
What's the house edge on AgentBet specifically?
Defaults: Coin Flip 2%, Dice and Crash configurable around 1-2%, Plinko and Mines around 1-4%, Keno 8-20% depending on risk level. Admin-tunable via /admin/settings.php within the [0, 40%] clamp.
Why does Keno have such a high edge?
Tradition. Keno comes from state lotteries which historically run 30-50% edges. Crypto Keno offers a much better deal at 8-20% but still higher than dice or crash because the max payouts are huge and the variance is brutal.
Can a casino offer 0% house edge?
Some do briefly as a promo. Long-term it's impossible because the casino has costs (servers, withdrawals, support). Zero-edge offers usually come with wagering requirements or bonus restrictions that effectively reintroduce the edge.
What's the relationship between house edge and bonus wagering requirements?
Wagering requirements exist to make sure bonus money is partially eroded by the house edge before it can be withdrawn. A 10× wagering requirement at 2% edge means the casino expects to recover about 20% of the bonus through edge bleed during the play-through.

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