What are fixed-odds & skill games?

Some forms of gambling are largely skill-based, others contain an element of skill and many are based entirely on luck. The majority of gamblers don’t really understand how odds work. Many punters believe that all games are based on luck and play with their gut. Others believe they have a system for everything – even slot machines!

The reality is that some gambling activities can be profitable given enough skill, practice and knowledge. Others can be optimised with mathematically sound wagers. The rest are totally down to fate – these are known as ‘fixed-odds’ games.

There’s nothing wrong with gambling for fun without considering how to play ‘smart’ (as long as you play responsibly) but we believe it’s important that you know all the facts.

Skill games

The following games can provide a profit to skilled individuals, although, of course, luck still plays a role.

Poker

Poker is a global competitive sport, with international tournaments, stars and player sponsorships. The highest-earning tournament poker star at the time of writing (Daniel Negreanu) has racked up £19,483,040 in winnings to date.

Playing online poker profitability requires a significant amount of skill, practice and patience. The game’s mathematical and psychological elements mean it is widely acknowledged as a skill game. While it is possible for weak, inexperienced players to win in the short-term (because of variance) skilled players will almost always prevail in the long-term.

Sports betting

There have been literally hundreds of books published on accumulating cash through sports betting. The key to sports betting success is a thorough understanding of the statistical landscape of sport (past and present) and (ideally) access to inside knowledge.

For instance, Patrick Veitch (a self-described ‘professional punter’ and mathematician) explained in his autobiography how he was able to beat the bookies on horse races by pouring over stats and watching race videos for hours, in addition to forging useful contacts within the stables.

Lacking this privileged access, the next best thing is to connect with the vast sports betting community, share opinions, get the buzz and analyse pundits’ tips.

Optimised bets

The following games are ultimately weighted against the player. However, it is possible to improve your odds and minimise the house edge by adhering to mathematically optimised betting systems.

Blackjack

By following ‘Blackjack Basic strategy’ the house-edge in blackjack can be brought very close to zero, meaning the house has virtually no advantage over the player.

Craps

Craps can be a very good game or a terrible game for players, depending on the types of bets chosen. Certain plays result in a low house edge or none at all, while others produce an edge as high as 17 percent.

To learn how to optimise your bets in craps, click here.

Video poker

The house edge in online video poker can be theoretically beaten in video poker, if the game is played with an optimal strategy. Even without employing any kind of strategy, the house edge in all variants of video poker is very small.

Published pay-out percentages

Many casinos and software developers will publish the pay-out percentages attached to its games. You need to find out if these figures are based on independent audits or internal assessments. If it’s the latter, they probably aren’t trustworthy.

Fixed-odds games

Many casino games come with a fixed house-edge, meaning there is nothing players can do to improve their chances. That’s not to say you shouldn’t play these games, but you should be aware that you’re in it for fun, not for profit!

Roulette

European and American roulette both come with a fixed edge, resulting from the green pocket. As each spin is statistically independent from the next in this game, it is impossible to develop an optimised betting system.

Baccarat

For all its pomp and ceremony, online baccarat is basically a glorified game of odds or evens. The marginally reduced house-edge means you should always bet on the dealer hand, but aside from that, it’s totally down to luck.

Slots

Online slots, and indeed all virtual games with outcomes based on random number generation – come with a fixed edge determined by software that generates extremely long sequences of numbers. This ‘pseudo number generation’ makes it impossible to beat these games in the long run, even when bonus rounds create the illusion of skill. Physical slot machines in the UK and America can come with positive expectation if they use an adaptive logic pay-out system, or if they boast a large progressive jackpot.

Understanding casino odds, house edge & pay-out percentage

Learn the mathematics behind casino gambling – understand the odds and optimise your play.

Casino odds can be a tricky business. While for some games they are fixed and there is nothing players can do to affect them, other games allow room for optimisation.

Casino odds

Casino odds have two main components: pay-out percentage and the house edge. Individual bets have different odds attached to them, but it all eventually boils down to these two figures.

Pay-out percentage

The ‘pay-out percentage’ is the percentage of bet cash returned to players. Incredibly, the pay-out percentage for online slots games is usually no less than 95 percent. For certain games (played with an optimal betting strategy) the pay-out can be above 100 percent.

Taking European roulette as an example, the pay-out percentage is approximately 97.3 percent. Therefore, if £10,000 was wagered on European roulette in one night at a casino, the house would expect to return £9,730 to its customers, resulting in a £270 profit.

House edge

In the example above, the casino’s profit is equal to 2.7 percent of total bets. This figure represents the ‘house edge’, meaning the proportional profit that the casino can expect to make from European roulette.

The nature of roulette means that this edge will be consistent irrespective of how players bet and how much they wager. Whether they’ve got bankrolls of hundreds or millions, whether they make even or straight bets, in the long term they will give approximately 2.7 percent of their money to the casino.

Calculating expected value

The amount of money a player can expect to win or lose in the long term is referred to as the player’s expectation or expected value (EV). This is the EV calculation for betting on a single number on European (single zero) roulette.

EV = (1 * (18 / 37)) + ((−1) * (19 / 37)) = – 0.027

The expected value of a casino game is always a value between -1 and 1.

To derive the house edge, you just multiply by 100 to get a percentage. This gives European roulette a house edge of 2.7 percent.

Most casino games come with negative expectation, with the exception of blackjack, craps and video poker in certain conditions. For skilled practitioners, poker and sports betting can come with positive expectation.

Betting optimisation

There are certain bets that are mathematically superior in certain circumstances, producing better odds. Whereas roulette is a fixed-odds game (meaning the house edge never changes), it is possible to affect the house edge in other games through betting optimisation.

Blackjack

When playing 8-deck blackjack, it is possible to reduce the house edge (in ideal circumstances) to 0.45 percent by playing according to basic strategy.

There are also a number of ‘silly bets’ which should be avoided due to their extremely unfavourable odds. For instance, never accept insurance bets when the dealer’s visible card is an ace, because the house edge is extremely high in this instance.

Craps

The house edge in craps is determined on the basis of individual bets, ranging from 16.67 percent to zero – this means that optimal betting in craps can massively impact your expected pay-out percentage.

Video poker

By adhering to perfect play, it is actually possible to beat the house edge – one of the few casino games that can offer the player an advantage. Even when played imperfectly, the house edge in video poker is extremely low, making it a popular choice among advantage gamblers.