If you’ve done any research on casino game strategy, in all probability you will have come across the term “Expected Loss“. This term can be quite misleading as it’s not the amount that you should expect to lose at a casino, but rather it is the mathematical average loss. What’s the difference?
Let’s take a look by way of an example:
The casino’s house edge or advantage is the average profit that it makes per wager made. As you’ll already know, this figure differs from one game to the next. In the game of Roulette, the house edge is generally 5.26%. This means that your “expected loss” on a $10 bet is $10 x 5.26% which when rounding up gives you $0.53 on each bet you place.
That said though, you can’t lose precisely $0.53. If you wager on either red or black, you’ll either win an additional $10 or lose the entire amount. This means that you don’t really expect to lose $0.53 on every bet you make, but rather that over time this will be the mathematical average loss on every $10 wager if you played the game on an on-going basis.
As you may already be aware, the more you play, the more likely it is that your actual loss will approach the expected loss. So if you play 100 round of roulette at $10 a spin and bet on black every time, you will on average win 475 times and lose 525 times. So you’ll win around $950 (475 wins plus your original bet) when you risked $1000, which means that after the game you will have lost $50, which equates to 5% – pretty close to the projected expected loss of 5.26%.
When comparing the risk of various casino games, expected loss can be a great tool to use and will depend on three main aspects:
- The value of your betting (the amount you wager per round)
- Game play speed (how many rounds you play per hour)
- The House Advantage (the average casino profit per wager)
You can then apply these factors within the following formula to determine the risk of the game/s you are playing:
Wager x House Advantage x Number of Hands x Time spent playing = Expected Loss
So if you’ve played blackjack according to sound basic strategy at $10 an hour for 3 hours, this would be calculated as follows:
$10 x 0.5% x 90 hands/hr x 3 hrs. = $3
Table Game Speed
Obviously, the speed of game play at a land based casino will be determined by the dealer’s style and the number of people playing. At online casinos, the rate of play is governed by the casino’s software settings, although these can be adapted to your preferences within the settings in your player dashboard, which is advantageous as you can slow games down which means that your money can last longer – although your patience may not.
When it comes to playing slots, you are in control and the speed of game play will depend on the rate at which you push the spin button. When it comes to returns on slots, online casino are way more forthcoming with their payout rates than their land based counterparts, so unless you’re willing to do some serious research on brick and mortar slot machines, figuring out the rate of play is easier at online casinos which is why playing popular slots online is the way to go for many players.