Knowledge · Game Mechanics
What is house edge in iGaming? Formula, ranges and impact on GGR
House edge is the single number that turns wagers into revenue. It defines the operator's long-run margin on every unit staked, drives GGR forecasting and, alongside RTP, sets the economic ceiling of every game on the shelf.
Updated July 2026 · AS Tech iGaming editorial
Definition
House edge is the theoretical percentage of every wager an operator keeps over the long run. It is the mirror image of RTP: whatever the game does not return to players, the house keeps.
Formula: RTP vs house edge
House Edge (%) = 100 − RTP
Example: a slot configured at 96.5% RTP has a 3.5% house edge. On $1,000,000 of wagers, expected GGR is $35,000 before bonus cost, variance and fees.
Typical house edge by game
- Blackjack (basic strategy): 0.4% – 0.6%
- Baccarat (banker): 1.06%
- European roulette: 2.70%
- American roulette: 5.26%
- Slots (tier-1 studios): 2.5% – 6%
- Crash / Aviator: 1% – 4% (studio-configurable)
- Keno / lottery-style: 20% – 40%
House edge vs actual hold
House edge is the theoretical margin baked into the maths. Hold is what an operator actually books after variance, bonus abuse, VIP rebates and payment costs. Over months of play, hold converges to house edge; over a single day it can swing by 5–10× on a small player base.
Configurable RTP lets operators tune house edge
Most modern slot providers ship a title in multiple RTP configurations — commonly 96.5%, 95.5%, 94.5% and sometimes 88%. Picking a lower RTP tier at launch mechanically raises the house edge by the same amount. Regulated markets (UK, Netherlands, Sweden) require the active tier to be disclosed inside the game info panel.
How house edge drives GGR
Expected GGR = Total Wagers × House Edge
This is the master equation of casino revenue. Every product decision — game mix, RTP tier, bonus wagering multiplier, high-roller limits — is ultimately a lever on either total wagers or blended house edge. NGR then subtracts bonuses, taxes and payment costs on top.
Operator tips
- Track blended house edge weekly across your top 50 games — a drift > 0.5% usually points to promo abuse or bot activity, not variance.
- Never mix RTP tiers of the same title in the same market — cross-checking players will churn instantly and review sites will call it out.
- Model bonus wagering as an effective house edge reduction: a 35× wagering slot bonus on a 3% house-edge slot pays out ≈ 65% of face value; anything under 25× turns negative fast.
- Use house edge — not RTP — as the input to your GGR forecast. Product, finance and marketing then all speak the same language.
Frequently asked questions
What is house edge in iGaming?+
House edge is the operator's long-run theoretical profit margin on every unit wagered. It equals 100% minus the game's RTP — so a 96% RTP slot has a 4% house edge.
How is house edge calculated?+
House Edge (%) = 100 − RTP. For a game where players win back an average of $96 per $100 wagered over billions of rounds, RTP is 96% and the house edge is 4%.
What is a typical house edge by game?+
European roulette 2.70%, American roulette 5.26%, baccarat (banker) 1.06%, blackjack 0.4–0.6% with basic strategy, most slots 2–6%, crash / Aviator 1–4%.
Is house edge the same as hold percentage?+
No. House edge is the theoretical margin. Actual hold is what an operator books after variance, bonuses and player behaviour — it tracks house edge over a long enough sample but can drift meaningfully in the short term.
Can operators change the house edge of a game?+
Operators cannot change the mechanics, but many slot studios ship 2–4 RTP tiers per title (e.g. 96.5%, 95.5%, 94.5%). Picking a lower tier at launch raises the house edge by the same amount.
Why does house edge matter for casino profitability?+
Expected GGR = Total wagers × House edge. Over a large enough sample, house edge multiplied by handle is the single biggest driver of casino gross revenue, ahead of bonus cost, chargebacks or payment fees.