Here's an interesting distinction that I hadn't thought about before. There are two ways of looking at payout percentages, or return percentages, or the house edge when gambling. When gamblers or gambling writers talk about payout percentages or return percentages or paybacks, they're always talking about machines, like slot machines, video poker, video keno, or whatever. They refer to the payout percentage as the percentage of each bet that's returned to the player over the long run. (Slot machine payout percentages are set by law in Nevada to at least 75%, and in Atlantic City they're set at a minimum of 83%.) Unfortunately, it's tough to figure out what the actual payout percentage on an individual machine is.

But whenever a writer or gambler is talking about the house edge or the house advantage, they're talking about a table game, like blackjack, or baccarat, or sic bo, or craps, roulette, whatever. In that case, the house edge is the amount the player loses on each bet over the long run. (As opposed to the percentage amount he wins over the long term.) Blackjack, for example, usually has a house edge of between 0.5% and 1%, depending on the rules variations in effect. Roulette has a house edge of 5.2% or so. Some really great craps bets (at places offering 100X odds) have a house edge of just 0.1%.

It's really easy to convert one to another. (Payback percentage to house edge and vice versa.) The two numbers always add up to 100%, so all you have to do is subtract the one from 100% and you'll get the other one as your result. So if a 9/6 Jacks or Better video poker game offers a 99.5% payout percentage with perfect play, the house edge is 100% - 99.5% or 0.5%. If you're playing blackjack with a 0.5% house edge, then the payback percentage is 99.5%. Neat huh?

(I knew all of this before, but I'd never thought about the distinction between how we talk about the house edge and payback percentage differently from table games to machine games.)

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Slotty McSlots