The House Edge in Blackjack: 21 Things to Know
Published on June 02, 2017
If you’ve done any reading at all on the Internet about blackjack, you’re familiar with the phrase “house edge”. In fact, if you’ve read about the math and/or probability behind ANY casino game, you’ve heard this phrase.
But what does “house edge” mean?
And what does it mean for the intelligent gambler?
I’ve listed and explained 21 facts about the house edge in blackjack below:
The house edge is a statistical way of measuring the casino’s advantage over the player.
When a gambling writer suggests that a game has a house edge of 5%, they mean that you’re expected (mathematically) to lose an average of 5% of your bet every time you wager. In other words, if you’re wagering $100 per bet, you’re expected to lose $5 for every bet you place.
The gambling math implications are probably clear. If you’re playing a game where you’re making 60 bets per hour, and you’re losing $5 per bet, you’re losing $300 per hour. On the other hand, if you’re playing the same game but with a house edge of 1%, you’re only losing $60 per hour.
The house edge only applies over a statistically large number of bets.
The house edge obviously doesn’t apply to a statistically small sample of bets.
Think about it this way:
You’re playing in a blackjack game with a 1% house edge.
You walk up to the table and play a single hand for $100.
You have the following possible outcomes:
Even though the mathematical expectation for that bet is to lose $1, actually losing a dollar on a single $100 hand of blackjack is literally impossible.
In fact, you couldn’t lose an average of $1 per hand on $100 blackjack unless you played quite a few hands. The math just doesn’t work.
You could play one hand and win $100.
You could play ten hands and have a net loss of $400, which is an average loss per hand of $40.
You could play one hundred hands and have a net loss of $500, which is an average loss per hand of $5.
But once you get over 1000 hands, the actual results are going to start resembling the mathematical expectation.
At 10,000 hands, you’re going to be even more likely to see something statistically similar to the mathematical expectation.
At 100,000 hands, you’re almost certainly going to get eerily close to the expectation.
At 1 million hands, the chances of getting results different from the expectation are almost nonexistent. (It would take you 16, 667 hours to get in a million hands, by the way. If you played for 40 hours a week, that would take 416 weeks to accomplish, or about 8 years of full time play.)
The house edge in blackjack is (generally) lower than the house edge for any other casino game.
The house edge for most casino games is much higher than it is for blackjack. One almost wonders why the casinos still offer the game of blackjack, in fact. After all, it’s way less profitable than something like Caribbean Holdem or Casino War.
I’ve seen some gambling writers refer to games like Casino War as “carnival games”. Man, how bad does your house edge have to be to qualify a game as a “carnival game”?
As it turns out, the house edge in Casino War is a whopping 2.88%.
That doesn’t sound like much, but let’s think about what that means.
If the house edge on blackjack is 0.5%, you’re looking at an average loss of 50 cents every time you bet $100.
On the other hand, with Casino War, you’re looking at an average loss of $2.88 every time you bet $100.
That doesn’t sound like a huge difference, really. After all, you can’t even buy a pack of smokes for $2.88.
The problem is that no one plays a single hand of blackjack or a single hand of Casino War.
Most people play for an hour or two. This means you’re more likely to play 60 or even 120 hands.
At 50 cents per hand, you might lose $3 to $6 in that scenario. At $2.88 per hand, you’re looking at a loss of almost $180 on the low end and maybe even $360 on the high end.
And that’s only assuming a couple of hours of play.
The house edge in blackjack is around 0.5% if you use basic strategy.
Of course, that 0.5% can go up or down based on your skill level. Most players are bad enough at blackjack basic strategy to give up another 1.5% or so to the house, making the house edge for the casino 2%.
In fact, this is one of the answers to the question I asked above—why does the casino offer blackjack if the house edge is so low?
The answer is simple:
Because most players won’t take the time or make the effort to get the house edge that low.
Basic strategy is just a fancy word for the ability to make the correct mathematical decision in every situation at a blackjack table.
In poker, you have to know when to fold ‘em and know when to hold’em.
In blackjack, you have to know when to hit, stand, split, and double down.
The correct decision is always based on what cards you’re holding compared to the dealer’s face up card.
A lot of times, common sense can inform your play.
It’s the borderline situations, like whether you should hit that hard 15, which makes the difference between the men and boys in blackjack basic strategy.
If you don’t use basic strategy, the house edge is much higher.
I already mentioned that the house edge is closer to 2% if you’re bad at basic strategy, but it could be even worse than that. You could theoretically hit until you bust on every hand. The house edge for a player that dysfunctional would be 100%.
No one plays like that, but it’s a good example of how that kind of difference in house edge is possible.
A lot of players make basic strategy decisions by mimicking the dealer’s strategy. This is one of the worst ideas you can have.
Other players always assume that the dealer has a 10 in the hole. This is closer to correct basic strategy, but it’s far from foolproof. In fact, it’s a recipe for disaster in some situations.
The bottom line is simple, though:
You should always use basic strategy to keep the house edge as low as possible.
You can calculate your predicted hourly loss at blackjack if you know what the house edge is.
I looked at this a little bit in an earlier example, but here’s a detailed explanation of how to calculate your average hourly loss playing blackjack:
You take the net amount you’ve won or lost and divide it by the number of hours you played. For example, if you played for two hours and lost $200, you lost $100 per hour.
That’s how you calculate your actual hourly loss rate.
But you can also calculate your predicted hourly loss rate. You probably won’t see your numbers starting to mirror this until you’ve hit 10,000 hands or so, but it’s still worth knowing.
The formula for expected hourly loss looks like this:
Average bet size X bets per hour X house edge = hourly expected loss.
Here’s an example:
I’m betting $100 at a table where I’m getting 60 hands per hour. I’m a perfect basic strategy player, and the game is good, so the house edge is only 0.5%.
My expected hourly loss is $100 X 60 X 0.5%, or $6000 X 0.5%, or $30/hour.
Compare that with my friend Steve, who doesn’t use basic strategy. The house edge is 2% against him, so his expected hourly loss is $120/hour.
You can make this calculation for any casino game, by the way – not just blackjack.
If you learn to count cards (or master some other advantage gambling technique in blackjack), YOU can get edge over the house.
Once you’ve mastered basic strategy, you can move on to counting cards. When someone counts cards, he keeps a relative count of how many high cards versus low cards are left in the deck. When a lot of high cards are left in the deck, he raises his bet.
Here’s the how and why of it:
Card counters can even go broke if they don’t have a large enough bankroll to take into account statistical deviation.
The house edge can vary based on game conditions.
Game rules for blackjack vary dramatically from casino to casino and from table to table within a casino. For example, you might be playing in a game dealt from a single deck. The table next to you might be using 8 decks. The house edge differs based on this game condition.
Other game conditions and rules variations include whether or not the dealer hits a soft 17, whether or not you can double after splitting, and how much you get paid when you hit a “natural” (a 2-card hand that totals 21).
The next few items on the list look at the effect on the house edge of some of the more common rules and conditions variations you might run into.
The house edge goes up when the casino uses more decks of cards.
This rule variation might seem puzzling at first. Why would the house edge go up just because there are more decks in use? You still have a similar ratio of high cards to low cards. In fact, before any of the cards are dealt, the ratio is exactly the same.
The answer lies in the likelihood of getting a blackjack.
Let’s assume you’re playing in a single deck blackjack game. You get an ace as your first card.
There are 51 cards left in the deck, and 16 of them have a value of 10. The probability of getting a blackjack (which pays off at 3 to 2), is 16/51, or 31.37%.
But let’s look at the same situation with 8 decks in play:
You’re dealt an ace. You now have 415 cards left in the shoe, and 128 of them are worth 10. The probability of getting a blackjack is 128/415, or 30.84%.
So your chances of getting a blackjack are lower with more decks in play. Fewer blackjacks mean a bigger house edge.
The actual difference in house edge between a game with 8 decks and a game with one deck is about 0.25%.
Whether the dealer hits a soft 17 also affects the house edge.
Everyone knows that in any blackjack game, the dealer has to hit any total of 16 or less. And it’s always a treat to see a dealer go bust, especially when you didn’t go bust first.
But in some casinos, a dealer stands on a soft 17. In others, the dealer hits a soft 17.
A “soft” 17 is a hand in which there’s an ace, which can count as 11 or 1.
You don’t have to guess what the rule is, either. All blackjack tables at all casinos have one of two things about this written and posted at the table:
You might think that if a dealer hits a soft 17, she’s more likely to bust.
And you’re right.
That’s exactly what it means.
But that doesn’t mean the rule is good for the player.
On the occasions when the dealer does NOT bust, her hand is going to improve dramatically.
In fact, this will happen often enough that a blackjack table where the dealer hits a soft 17 has a 0.2%
If you can double after splitting, the house edge improves.
Most people realize that being able to double down is good for the player. After all, it gives you the opportunity to put more money into action when you think you’re in a good situation.
Being able to double down after splitting gives you additional opportunities to put more money into play when you like your odds. This is good for the bottom line.
Not all casinos allow you to double down after splitting. If you are allowed to double after splitting, you can subtract about 0.15% from the house edge.
The more flexibility you have doubling down, the lower the house edge.
At some casinos, you can only double down on the first two cards if you have a total of 10 or 11. Other casinos also allow you to double down on a 9, too.
And in some casinos, you can double down on any total.
Obviously, the more options you have, the better off you are.
In this case, being able to double down on any two cards takes almost 0.2% away from the house edge when compared to only being able to double down on a 10 or 11.
Keep this in mind, though:
You have to master basic strategy for this to matter.
The more flexibility you have when splitting, the lower the house edge.
As usual, the more options you have, the better off you are.
Splitting pairs is obviously an attractive option for players, because you can again get more money into action when you like your situation.
For example, if you can split aces, you get two hands, both of which have an almost 1/3 chance of turning into a blackjack.
Many casinos only allow you to split once.
But in some casinos, if you get a pair on your newly-split hand, you can re-split.
This has a smaller effect on the house edge than most of the stuff on this list, because it just comes up less often. If you can split to up to 4 hands, you get another 0.05%.
Surrender rules affect the house edge, too.
Most players ignore the option to surrender. This is a mistake, because it costs money in the long run. In some situations, surrendering is the correct play.
Casinos have “early surrender” and “late surrender”. (Some don’t offer surrender as an option at all.)
Here’s the difference:
In a casino which offers “early surrender”, you can forfeit half your bet if the dealer has an ace and you don’t like your hand. It’s called “early” surrender, it’s because you’re able to make this decision before the dealer checks for blackjack.
In a casino which offers “late surrender”, you have the same option.
But the dealer checks for blackjack first.
One is clearly better than the other.
The payout for a natural (a “blackjack”) has a huge effect on the house edge.
The traditional payoff for a “natural” or “blackjack” is 3 to 2. That means if you bet $100 and get a blackjack, you win $150.
In recent years, casinos have started offering games where blackjack only pays off at 6 to 5.
And since a lot of Americans are bad with fractions, they don’t even realize that this is a worse deal. Because 6 is better than 3 and 5 is bigger than 2, they think they’re getting a better deal.
But when you get a blackjack with a $100 bet at a 6 to 5 table, your payoff is only $120, not $150.
The effect this has on the house edge is so dramatic that it can’t be overstated.
It adds a huge 1.5% to the casino’s advantage. This makes blackjack a game comparable to Casino War, but it’s harder, because you still have to follow basic strategy.
Just say no to 6/5 blackjack.
If a casino charges an ante, the house edge skyrockets.
In some Oklahoma casinos, you can play blackjack, but you have to pay an ante. This is a portion of the bet that goes to the house period. The most common ante in Oklahoma blackjack is 50 cents on a $5 bet.
You don’t get the 50 cents back whether you win or lose. This takes 10% off the top immediately. That makes blackjack with an ante as bad as any carnival game I’ve ever seen.
If you absolutely must play blackjack with an ante, the only mathematically correct way to reduce that extra house edge is to bet as much as possible. A 50 cent ante on a $100 bet only adds 0.5% to the house edge, which is a dramatically different number from 10%.
Really, though, you’d be better off finding a U.S. friendly online casino and taking your blackjack action there. You’ll get a better game.
I won’t lie. I’ve played blackjack with an ante in Oklahoma.
But I’m a little embarrassed by it.
I should stick with Texas holdem when I’m in Oklahoma. Even most slot machine games are better than blackjack with an ante.
The house edge on video blackjack is much higher than the house edge in a traditional game with a live dealer.
Video poker is far and away better than slot machines. The payback percentage on video poker games is usually at least 95%, which means the house edge is (at most) 5%. On slot machines, you’re lucky to find a game with that good a payback percentage.
You might think that video blackjack is comparable to video poker and a really great game.
All the video blackjack games I’ve ever come across paid even money for a natural. That’s worse than a 6/5 payout. That change alone adds 2.3% to the house edge.
In most casinos, though, video blackjack has a random number generator that emulates the same probabilities as a deck of cards.
One advantage video blackjack does offer is its availability in a low stakes version. You can find video blackjack games where you can play for 25 cents per hand.
But the much higher house edge and the increased rate of play add up to make video blackjack an expensive game to play. You might see 60 hands per hour at a traditional blackjack table, but when you’re playing video blackjack, you can easily play 200 or 300 hands (or more) per hour.
If you’re determined to play video blackjack, consider playing at an online casino. The blackjack games at all the online casinos I’ve ever played at offered full payouts on naturals.
You can still win (in the short run), even though the house has an edge.
This can’t be emphasized enough. In the short run, in any gambling game, anything can happen. This is called variance. A more colloquial way of describing this mathematical phenomenon is to use the word “luck”.
Think about it this way. If your mathematical expectation is to lose 1% of every bet, you’d almost have to place at least 100 bets before seeing your actual results mirror that expectation.
In 2 or 3 hands, it would be impossible to see an average 1% loss.
In fact, here are the possibilities for 3 hands:
If you look at your average win/loss per hand in those situation, you get:
None of those outcomes resembles the 1% that we expect mathematically over time. Of course, those examples are simplified and don’t take into account the possibility of winning 3 to 2 on a natural. But even if you take that into account, it’s still impossible to see the mathematical expectation over a short period of time.
In fact, if you only play for a couple of hours, you can often walk away with a winning session.
The casino is well aware of this, in fact. If this weren’t possible, no one would ever play a casino game to begin with.
The casino might be running 10 blackjack tables 24 hours a day. If they have an average of 3 players at each table all the time, averaging 60 hands per hour, they’re looking at 43,200 hands per day.
With that few hands, casinos can even see losing days, although they’ll more often see winning days.
But over the course of a month or a year, the real numbers are going to close in on the mathematical expectation.
You can still lose (in the short run), even if you’re an advantage player with an edge over the house.
Some people think that because they can count cards and get an expected edge of 1% over the casino, they can just sit down and win whenever they want to.
What I said in #18 applies just as much to advantage players, though. In the short term, anything can happen. It’s only in the long run, over thousands of hands, can you expect to start seeing your results mirror the expectations.
What’s the takeaway from this bit of knowledge?
If you’re an advantage player, you need a large enough bankroll to not go broke during the inevitable downswings. The lower your edge, the bigger your bankroll needs to be.
You should have between 200 and 1000 betting units. On the lower end, your risk of going broke is higher. If you’re playing for $100 per hand, and your total bankroll is $20,000, you have a 40% chance of going broke before your edge kicks in. On the other hand, if you have a bankroll of $100,000, your probability of going broke is only 1%.
It pays to be well bankrolled.
The house edge for online blackjack games can be excellent.
Online casinos don’t have to pay dealers. They don’t need air conditioning, or cocktail waitresses. They often employ workers in countries with a different standard of living than the United States.
Those absences add up to make running an online casino cheaper than running a traditional brick and mortar casino in the United States.
The online casinos are able to pass that savings along to the online casino player in the form of better rules and a lower house edge.
This doesn’t mean that you’re going to win, necessarily. It does mean you’ll get more gambling for your money.
Even if the house edge at an online casino is only 0.2% or 0.1%, you’ll go broke if you play long enough. And online casinos always maintain an advantage over the player.
The house edge for the various blackjack games from different software providers is easy to find on the Internet. You should stick with the games which offer the best odds (i.e., the lowest house edge).
The only game in the casino with a lower house edge than blackjack is video poker, and that’s only on certain game variations with certain pay tables.
You can find video poker games with a payback percentage of 99.95% or 99.54%. That means the house edge on those games is 0.05% or 0.46%. This is better than what you’ll find at most blackjack games.
If you like video poker, by all means you should take advantage of those games. Some people don’t enjoy the interaction at casino table games. If that’s you, feel free to stick with the machines.
One drawback to video poker, though, is that it’s inevitably played for low stakes. All my friends are low rollers, so it doesn’t affect us much. But if you’re wanting to put $500 into action at a time, you just can’t do it at a video poker game.
You can even get an edge at video poker if you choose the right games and take strategic advantage of comp points from the casino’s slots club. But the stakes are so low that it’s impossible to win much per hour doing so.
Blackjack is easily the best game in the casino math-wise. Video poker has its fans, but at the end of the day, you can bet more on a hand of blackjack. Unless you’re a committed low roller, this gives blackjack the advantage over video poker.
Multiple factors affect how much money you’ll lose (or win) over time when playing blackjack in a casino. The house edge is a major factor, but your level of skill, how fast the dealer is, and how lucky you are also play a big role, too.
If you come away from this blog post with only one actionable suggestion, let it be this:
Always use basic strategy when playing blackjack.
That’s the best way to get the best chance of winning at the blackjack tables.