Topic: No House Edge? - page 2. (Read 4741 times)

There are example in which casinos can make money without any house edge.  There's a horse betting site that's been in these boards fore the past week or so and what they do is collect a fee on winnings.  So Casinos could be profitable on fees alone depending on how the games are structured.

Another example is where it's all PVP like various poker games.

I believe it would be impossible to create a casino without an edge unless you want to give out the money for free.
House edge makes the casino to earn money.
The only way would be to come up with a new way to earn from the players

The 'house edge' is effectively a fee on the entire payout amount, including your stake. 1% of 2 is 0.02, leaving 1.98x from the 2x payout.

If a site was to charge 1% of just your profit, that would be a better deal for the player. Especially for the high-chance bets (like 98%) where almost all your payout is your initial stake and the profit is relatively small.

Thank you for showing up I thought I would never be able to explain this.

You can't create money, someone has to lose and someone has to win.

Ahh thankyou Dooglus for this clarification I thought that the 1% fee will be leaving the net profit to be 1.99x though than this is how I assume that they are both different since 50% at gambling sites is leaving a profit for 1.98x. Since this is about 50 % chance will it still be the same assuming that it is not at 50 % chance to win Doog?

P.S : I got it right at the bolded part though  although it is not entirely correct

You are right - it is similar to a marketing expense too us. We have 0% fees on the p2p sport bets - especially because here everything is done automatically - the obviously have data feeds for the sport events. On all other events like: will the block size limit be raised by march 2016 we need to moderate them and so we take a 2% fee. https://www.fairlay.com/event/category/bitcoin/

A 1% house edge is the same as paying a 1% fee on all payouts from a 0% edge game.

  * 1% game: pays out 1.98x at 50%

  * 0% game with 1% fee: pays out 2x at 50%, but takes 1% of that, leaving 1.98x.

Get it?

Indeed yes if you have both the same number for win and lose your profit is 0 and your net profit will be in minus since there is a cut in every winning that you got but since you are saying that both fee and the house edge are the same in this term, then your statement is wrong.
Assuming you are playing at 2x payout with 49.5 %  chance and you got the same number for win and lose then your net profit is not on minus but if you are playing with 50 % chance then it is a minus

well then either fees have to be huge, or the player has to gamble a lot of bitcoins for the fee to be a big amount of money so i think that wouldnt have any impact on busting player when gambling

But if you win just as often as you lose (asuming 50% win rate), and you pay the fee when you win, the net result would still be that you end up in the minus (based on the fee %).

In the recent example the biggest bet was 0.64 BTC wasn't it, and so it would be identical to your example.

When they lose, they lose 1+2+4+8+16+32+64 = 127 bitcents (1.27 BTC). That happens 1 in 128 sequences. They win 0.01 on each of the other 127 sequences, so they win 0.01*127 and lose 1.27*1.

It is not the same. Theoretically house edge applied to your bet whenever you are winning or losing because it is the expected earning where the site might gain but the fee that are collected from winning usually only applied to the winners. Therefore it is just slightly different but it is not the same

Can you explain it with a graphic example like: 10 players go to a 0% house edge casino that has 1 btc limit bet, they start betting at 0.01 like the example above. When they bust theoretically they would have won just as much so they would break even right? Untill they hit a 8 losing streak when they wont be able to double again so they would lose more than win??

The result of a fee and the house edge is the same in the end right? The house edge makes you lose more than you win, but the fee takes a percentage off all potential winnings. If the values are te same, net result would be equal? (as in, you lose money)

First off, most players won't break even. Some will win and some will lose. Each player's expected profit is zero, but their actual profit at any point in time is likely to be nonzero.

Casinos always have a bet limit. They have a finite bankroll. The point is that the amount you expect to win from all the times you don't hit the limit (whether it's your limit or the house's limit) is the same as the amount you expect to lose from all the times you do hit the limit. They cancel each other out.

Lets say everyone uses martingale, dooglus explained that they would all break even theoretically. BUT if say the casino has a bet limit, that would fuck up all these martingale players because they expect to break even until they hit the limit, when they hit the limit they start loosing, am i right on this?

Your theory is wrong. If the house edge is 0%, the house's expected profit is also 0. They will have winning days and losing days, but the expectation is zero.

There was a thread about this a year or two ago. Kluge was talking about running a -EV game:


I talked him out of it by running simulations showing how even though most players would bust if they were greedy, a few lucky players would win more than they lost and have their profits soar. The two (most players losing a little, a few players winning a lot) cancel each other out, and leave the house with an expected zero profit:



It doesn't matter how you play. You expect to lose (house edge) * (amount wagered). If the house edge is 0%, you expect to break even.


a1choi is right. Your calculation is incorrect. The problem is with the bolded part. You don't expect to hit 7 losses in a row after 2^7 = 128 rolls but after (2^8)-1 = 254 rolls.

To see this, consider how many coin tosses it takes to get 3 heads in a row. Try it a few times. You probably think the average will be 2^3 = 8 tosses, but it isn't - it's 14.

Here's a fixed version (I'll fix just the math, not the language):


I hope you can see now that you're wrong. It should be intuitively obvious that a 0% edge leads to an expected profit of 0. I do agree that voting isn't the way to decide mathematical issues of course.


So how do you fund the site? If you don't take a position and don't collect fees, what's the business model? I'm guessing the "zero fees" thing is a promotion to attract business and once things pick up you're start charging fees. Or are you funded by advertising?

You need to make a brand new thread and click on 'post new poll' instead of new topic.  Its a little cack handed. 

I dont know if you can make a poll in a thread, i think you need to make another thread with the poll, anyways there is no need for one since maths tell you that a 0% house edge casino would still profit as explained above using martingale strategy as an example.

I seem to be getting a lot of responses saying that 0% house edge may lead to a better chance of winning but ultimately it will lead to losing. I will make a poll for you guys to decide.

Edit: Don't know how to make a poll.  Any help?