House Edge -- Is It Really Required? - page 3.

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Quote from: reliable on June 08, 2020, 04:22:21 AM

It is only possible via having the house edge and thus inspite of this people try their luck and lose lot of money as well as they play just to make money from gambling

This is not the only way to make profits

When you bust, all your money becomes casino's. And the bigger the bankroll of a casino relative to your bankroll, the higher are your chances to bust even if the odds are equal, i.e. when there's no house edge as it is commonly understood. Put differently, a bigger bankroll already gives a casino advantage over you, and this is a house edge on its own, and as such it can generate profits in exactly the same way as a regular house edge

Quote from: o_e_l_e_o on June 08, 2020, 05:42:18 AM

Statistically speaking, a zero house edge casino would not be profitable. Over infinite time, the variance trends towards zero, meaning the casino would pay out exactly what they took in

People often appeal to theories, even resort to posting some arcane stuff, without truly understanding the very basic ideas behind these theories, how they work in practice. But let's return to my example of tossing a coin. You have 10 dollars and your friend has 10 dollars too. You pay 1 dollar for each loss and receive 1 dollar when you score a win. And one of you will inevitably bust in the end, and it won't take long, probably in fewer than 100 tosses

This is what statistics actually says

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Quote from: Yatsan on June 09, 2020, 01:55:04 AM

Quote from: shoreno on June 09, 2020, 01:02:29 AM

many casinos now have growned alot since the day they have started but they still have a house edge . some have a different house edge based on the games they have but majority of these sites have other forms of promotions too and one of it was rain or rains . i heard before that funds came from rains are from house edge . you can also get your house edge back in the form of rakebacks and other gambling promotions just to be fair for other big bettors because rains was random too

Agree! And casino owners are gambling too with their business so it's normal to have a house edge for their advantage. All of the Casino's have different ways to make a promotional campaign and honestly I think they are spending more on giving back to player than their house edge. For me it's not really required if you are big, but most of the casinos are still implementing it for more profit and promos for their website.

Right, I am also wondering that casino is spending more on their promotion than the extra profit they get from house edge, It is also possible that it is for long term sustainment for their gambling sites like for domain fees and other fees for the gambling site. As a gambler, I don't really make the house edge as a big deal because it knows it exists for the sustainment of the gambling site. A house edge is pretty normal for an online casino that's why we shouldn't complain about that.

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Quote from: deisik on June 07, 2020, 01:42:52 PM

Let's imagine an extremely wealthy casino whose bankroll size by far exceeds the bankrolls of all its players combined. Will this casino need a house edge to earn profits? As I see it, the house edge would make for more revenue flow, but it will still be making profits with a zero house edge simply because it will be able to stay in the game longer than any other player.

Why Microsoft is not stopping about catching pirated copy of windows even they are one of the world's biggest corporate and their founder is top richest of world for consistently more than a decade.

Bill Gates is ready to donate millions to billion dollars for philanthropy purposes but never think about forgiving a licence issue which costs ~$150.

Without the income stream, microsoft will be no more a giant. You may do lots of giveaways but you should never think about giving up your primary source of income. To be sustaining, you must collects fees and then you may donate or may not. If you start sacrificing your basic fee itself then you may end up bankrupted. Just the basic economic rule of a business model.

Houses may think about zero house edge in this possible ways:

By having house specific coin/token. All gambling should be done on that coin/token alone.
By introducing monthly subscription fee.
Zero house edge only for some hours.

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Quote from: shoreno on June 09, 2020, 01:02:29 AM

many casinos now have growned alot since the day they have started but they still have a house edge . some have a different house edge based on the games they have but majority of these sites have other forms of promotions too and one of it was rain or rains . i heard before that funds came from rains are from house edge . you can also get your house edge back in the form of rakebacks and other gambling promotions just to be fair for other big bettors because rains was random too

Agree! And casino owners are gambling too with their business so it's normal to have a house edge for their advantage. All of the Casino's have different ways to make a promotional campaign and honestly I think they are spending more on giving back to player than their house edge. For me it's not really required if you are big, but most of the casinos are still implementing it for more profit and promos for their website.

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many casinos now have growned alot since the day they have started but they still have a house edge . some have a different house edge based on the games they have but majority of these sites have other forms of promotions too and one of it was rain or rains . i heard before that funds came from rains are from house edge . you can also get your house edge back in the form of rakebacks and other gambling promotions just to be fair for other big bettors because rains was random too

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Quote from: Barnabe on June 08, 2020, 05:57:09 AM

It was quite a long time ago, but I remember at some point casinos were doing sub 1% edges. Maybe it's not profitable in the long run so they all stopped...

And it's always easy to complain once you lose, gambling should be about fun and excitement if you are gambling more than you can afford you should always reconsider.

I also recall there's a gambling site that had a very low house edge 0.2%-0.7% and it's only possible because they operated through moneypot no bankroll was required for them. Unfortunately their site didn't gained players and enough wager volume so they couldn't continue to operate on their own. Safedice had one of the lowest house edge in dice sites but the owner disappeared and their management suddenly crumbled.

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Quote from: Finestream on June 08, 2020, 03:54:35 AM

If the idea not to put a house edge in the casino to attract more gamblers is viable, that would have been implemented a long time ago, if there are casinos that implemented that kind of system, I think they are not successful as I haven't heard a popular casinos with no house edge

It is next to impossible for several reasons

First, all casinos are more or less small fish, and they have to be very careful in managing their bankrolls. There are people who have more bitcoins (for example) than most online casinos would ever dream of. In these circumstances a no house edge business model may not be economically viable (though it remains to be seen). Second and most important, people are taking a small house edge (say, 1%) as something legitimate. In other words, it won't give any substantial advantage by reducing it further (apart from happy hours and similar ideas)

Quote from: Finestream on June 08, 2020, 03:54:35 AM

For gamblers, we certainly like to play in a casino where we think we have a decent chances of winning, but it's not gonna happen as casinos advantage is what makes their business profitable against majority of the gamblers

Again, we don't know how much of an online casino revenue flow is due to house edge and how much of it comes from variance (i.e. people being irrational) and sheer bankroll size. The point is that the house edge can be easily overcome by variance if you know how to take advantage of randomness. The bankroll size, on the other hand, is unbeatable. To repeat, it is a statistical certainty that cannot be meaningfully challenged

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Quote from: deisik on June 07, 2020, 02:34:43 PM

Quote from: milewilda on June 07, 2020, 02:11:20 PM

Dont know if this line do really fits out " the sheer size of its bankroll will be the house edge on its own" No matter how big it is, it cant really be considered nor treated as an house edge

But that's how things turn out to be

In fact, it is not very difficult to show how the bankroll size can be an effective house edge in real life. Imagine you are tossing a coin with your friend. When you lose you pay them a dollar, if you win they pay you as much. Pretty simple setup, isn't it? And it looks like your chances are equal. And they are, at least as long as you toss a coin a couple times or so. However, if you have only 10 dollars while your friend 100, their chances of busting you are 10 times higher than yours busting them. This is the "house" edge that a bigger bankroll provides

True indeed but if your friend quit halfway while bagging 20% of your money, then what left is 80%. That is just for one player, what about if you play with 80 players more and these players do the same tactics. Then you will find out that your bankroll no matter how huge it is will become depleted.

Another thing, Casino establishment is a business so the owner wants to ensure that they will take profit no matter what happens and they see house edge as their advantage.

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Quote from: btcltcdigger on June 08, 2020, 03:41:11 AM

Since you basically have 50-50 %, and probability theory says that if you play long enough, you should remain at 0 (balanced out), the house edge just tips that in their facor

It is ironic how people start to make references to probability theory without actually knowing how it is going to play out in real life. In real life, though, if you play long enough on square odds, you will either bust or bust your opponent first (all other things equal). So 50-50 here refers to the odds of busting if the bankrolls are the same at the outset. In other cases, the higher the discrepancy between the bankrolls of the players, the sooner the one with a smaller bankroll is going to bust (and still faster if the stakes can be raised at will)

Something quite different from balancing out, however

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Quote from: Lakai01 on June 08, 2020, 03:05:49 AM

The House Edge also covers the costs that the company incurs for the operation of the site:

Server costs
Staff costs (server maintenance, ...)
Costs for advertising contracts (e.g. signature campaigns)

Probably the most practical explanation for why house edge. This correlation is demonstrable by the higher house edge for physical casinos, which have a higher overhead costs (more staff, refreshments, bills, rent, maintenance, marketing). Digital casinos have server fees (instead of rent), but also have maintenance and security costs, but fewer staff, cheaper marketing, etc. And a corresponding lower house edge.

House edge also allows for fewer restrictions that attract micro gamblers and high rollers. A casino that doesn't want house edge would probably want to lower exposure to variance, so they restrict max bets and min bets. With many crypto casinos, you get 1 satoshi min bets with 1 BTC upwards max bets, allowing martingale strategies with up to 30+ losing streaks (but house edge gives them less exposure to variance).

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First of all thank you very much for coming back to me, unfortunately it is not self-evident here in the Gambling section that a discussion is actually taking place Wink

Quote from: deisik on June 08, 2020, 06:39:58 AM

If it turns out that the house edge is not how casinos turn in most of their profits, I leave it to you to decide on how charitable this type of gambling would be

Yes, of course. Assuming that the House Edge is not the (main) source of income, one cannot speak of a "charity" action. But when I look at the countless online casinos, the question arises for me, what other sources of income are there besides the House Edge? Hardly any portal shows advertising, only a few offer the opportunity to invest directly in the bankroll - as Bustadice does, for example.

Quote from: deisik on June 08, 2020, 06:39:58 AM

Your analogy is skewed on so many levels

I'm fully aware of that Wink

Hence the "to put in exaggerated terms".
This comparison stands and falls of course also with the assumption that the House Edge is the main source of income of the casino.
What do you think these sources of income are?

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Quote from: Pamadar on June 08, 2020, 01:44:31 AM

Just like Government gaining Income from tax payers,House edge is something like this,Gambling site needs direct profit and that is from house edge so they have assurance of having funds to spent in their Daily expenses because what if time comes that luck comes to all players?

How do you know that the profits casinos earn come from the house edge?

Or at least the majority of them? We don't know that for sure. Moreover, as my example with a coin tossing shows, if your bankroll is incomparable to that of the casino, you are going to lose even with a relatively small negative house edge as the size of the bankroll itself is an effective house edge on its own, unless you utilize something like a safe martingale setup. But in the latter case you will be able to continually earn small profits despite a positive house edge

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Quote from: Sadlife on June 08, 2020, 07:16:35 AM

Im not a fan on leverage gambling so it maybe best to make it optional as some players are only there to play for entertainment not to drown in debt with percentage accumulated resulted in house edge especially when the one's im playing are random with no guarantee result.

all of us do mate,we are not fan of leverage but we can't do anything about that if the gambling site we are using needs to put this.

Quote from: Saisher on June 08, 2020, 07:24:51 AM

The answer is really obvious because majority of the gambling casinos has house edge if a gambling casinos can manage to overcome losses and make a profit, then he can launch one making it the first no house edge casino and every gambler will play here because they have a huge chance of making a profit than those with a house edge.

what do you mean the gambling casino need to overcome losses?make name even one gambling site that bankrupt (those legit and not some stupid scammers that close and open their site0

Look how long those casino business here in crypto talk.they are gaining more and more as years passed by.

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The answer is really obvious because majority of the gambling casinos has house edge if a gambling casinos can manage to overcome losses and make a profit, then he can launch one making it the first no house edge casino and every gambler will play here because they have a huge chance of making a profit than those with a house edge.

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Probably base on their huge profit the house edge contributes a lot so it will be hard not to collect extra profit even if they are big already. Some casinos already imposed a small rate for the house edge to attract more gamblers and it still works. Casinos is a business mate and if there's an opportunity or other way to earn profit they'll do it, remember they made a lot of expenses to make their system better, to make their casinos look luxury so I think it will be hard for them not to collect house edge.

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Im not a fan on leverage gambling so it maybe best to make it optional as some players are only there to play for entertainment not to drown in debt with percentage accumulated resulted in house edge especially when the one's im playing are random with no guarantee result.

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Quote from: Lakai01 on June 08, 2020, 03:05:49 AM

Quote from: deisik on June 07, 2020, 01:42:52 PM

I know every casino wants money, and it is unlikely we will see something described above in real life. However, it would be interesting to hear about examples which follow the logic of the bankroll size being a house edge in and of itself.

In principle a very interesting idea, but one must also be aware that this is then a "charity gambling" platform and not (in the long term) a viable company.
The House Edge does not exist - as we have often discussed here - just for fun but to keep the company behind the casino alive. The House Edge also covers the costs that the company incurs for the operation of the site:

Server costs
Staff costs (server maintenance, ...)
Costs for advertising contracts (e.g. signature campaigns)

If it turns out that the house edge is not how casinos turn in most of their profits, I leave it to you to decide on how charitable this type of gambling would be

Quote from: Lakai01 on June 08, 2020, 03:05:49 AM

To put it in exaggerated terms, your proposal could also be applied to Apple and Microsoft: Both companies with an incredible amount of capital, but who still won't come up with the idea of offering their products for free

Your analogy is skewed on so many levels

It would fit (to a degree) if users would have to pay for using these "free" products. And lo, it suddenly emerges as a perfectly viable business model in plenty of areas such as a mobile telecommunications industry where a network operator gives you a cell phone virtually for free provided you use it according to a specified data plan

And while we are at it, you are mistaken even on purely technical grounds. I don't know about Apple, but Microsoft offers a lot of its products for free as they earn by providing support. Just recall the inkjet printers manufacturers who are selling printers below cost of production, and then earning by selling extremely overpriced ink cartridges

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Quote from: freedomgo on June 08, 2020, 05:51:29 AM

Quote from: Barnabe on June 08, 2020, 05:34:48 AM

What is the smallest edge on crypto casinos ? Have someone ever seen a casino with a 0.1% edge or something similar ?

I don't see any casino with that kind of very low house edge, and actually it depends on the game.
So let's talk a particular game, for dice, usually the average house edge is just 1%, gamblers would already think it's a good percent and they have a good chance of winning but that 1% if a gambler plays regularly, he will lose in the long run, unfortunately, only few realizes that, that is why sometimes they think they are cheated when they lose.

It was quite a long time ago, but I remember at some point casinos were doing sub 1% edges. Maybe it's not profitable in the long run so they all stopped...

And it's always easy to complain once you lose, gambling should be about fun and excitement if you are gambling more than you can afford you should always reconsider.

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Quote from: Barnabe on June 08, 2020, 05:34:48 AM

What is the smallest edge on crypto casinos ? Have someone ever seen a casino with a 0.1% edge or something similar ?

I don't see any casino with that kind of very low house edge, and actually it depends on the game.
So let's talk a particular game, for dice, usually the average house edge is just 1%, gamblers would already think it's a good percent and they have a good chance of winning but that 1% if a gambler plays regularly, he will lose in the long run, unfortunately, only few realizes that, that is why sometimes they think they are cheated when they lose.

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Martingale seems really a fascinating topic for a lot of gamblers

But don't worry @deisik, I like your approach and thinking out of the box, although you know my opinion about something that might work to a certain extent in reality (with small gains, if you play it safe), but not in theory.

Quote from: deisik on June 07, 2020, 01:42:52 PM

As I see it, the house edge would make for more revenue flow, but it will still be making profits with a zero house edge simply because it will be able to stay in the game longer than any other player. Put differently, the sheer size of its bankroll will be the house edge on its own.

Imagine all those players putting all their funds in one pot and going all-in a few times - and getting lucky. Then this "syndicate" would suddenly have the house edge over the casino.

-

In general, this is of course a zero sum game, which is maybe good for money laundering, but else then that ? Your theory of a "bankroll house edge" makes sense, as far as I see it, but only, if you make Martingale mandatory for all players and no syndicates allowed. But all in all this is so far from reality, that it's hard to wrap your head around it (at least for me Cheesy

).

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