Understanding the Relationship Between RTP, Odds, and House Edge in 2025

On the surface, it seems like gambling is all about luck and chance. But if you dig deeper, what you will find is that the entire industry relies heavily on mathematics. As a matter of fact, the reason why a casino might pay out a big win or reward jackpots that run into millions of dollars without fearing for its long-term business prospects lies in the fact that the casino gambling model is defined by a system where the casino is guaranteed to take in more money in wagers than it pays out in wins. Because this system relies on the centuries-old mathematics of probability, casinos can be sure of maintaining their business for the long haul.

There are three pathways to understanding the maths that runs the gambling industry. One has to do with the concept of odds in gambling, the other is RTP (which is short for Return to Player), and the third is the house edge. Let’s start with the concept of odds in gambling.

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The Concept of Odds in Gambling

The odds of a game give you an idea of what your chances are in a game. In gambling, it is represented as the ratio of the ways something can’t happen to the ways it can happen.

What’s the odds of a bet on a single number in American roulette? Since there are 38 pockets, the odds of a bet on a single number will be 37 to 1 (37 representing the number of ways the ball can’t land on the specific number and one representing the number of ways the ball can land on the pocket).

But interestingly, the payout for this bet is 35 to 1. Why is the payout for the bet different from the odds? That’s an interesting question that we will get to later. Let’s explore the next key metric in gambling — the RTP.

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RTP

The RTP for a game is a percentage that represents how much the game will pay out to players over time. For example, a game with an RTP value of 85% will pay back 85% of all the money staked on it over the long term.

This means that if $1,000,000 is wagered on the game over a million spins placed over a period of time, the game will return back $850,000 to players over time as won wagers.

I know what you are thinking: “What happens to the remaining $150,000?”

Well, that’s the kind of question that the house edge concerns itself with.

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House Edge

The house edge represents how much a player will lose over time playing a game. For example, if a game has a house edge of 5%, it means that over the long term, you will lose 5% of the total wagers you placed on the game.

Where does this 5% go? That’s right — the casino’s wallet.

In the section on RTP, the question of what happens to the remaining $150,000 in a game that received a million dollars over a million spins and only paid out $850,000 rose up. Now you know why the game pays out less than it received in bets.

The higher the house edge, the more money you are likely to lose on the game over the long term. This is why games with the lowest house edge offer the best odds of winning, and games with the highest house edge offer the lowest odds.

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The Relationship Between Them

Since the RTP and odds of a game represent a player’s prospects in a game, they are on the same side of the divide. As you may have probably guessed, the house edge is on the other side of the divide.

Hence, the relationship between the RTP/odds of a game and the house edge on the game is an inverse relationship:

• The higher the house edge on a game, the lower it returns to players and vice versa.
• The same is true of the relationship between the house edge and the odds of a game: the higher the house edge on a game, the lower the odds of a game.

Example – American Roulette

• Odds of winning a single-number bet: 37 to 1
• Payout: 35 to 1
• House Edge: 5.26%

This difference ensures that the casino makes a profit over time, even though short-term outcomes may vary.

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Why RTP, Odds, and House Edge Matter

Understanding the balance between RTP, odds, and house edge helps you make better decisions when gambling:

✅ Higher RTP = Better player returns
✅ Lower house edge = Better long-term winning potential
✅ Good odds = Higher chances of short-term wins

Best Games for High RTP and Low House Edge:

• Blackjack – RTP up to 99.5% (house edge as low as 0.5%)
• Baccarat – RTP of 98.76% (house edge of 1.24% on banker bets)
• European Roulette – RTP of 97.3% (house edge of 2.7%)

Worst Games for High House Edge:

• American Roulette – RTP of 94.74% (house edge of 5.26%)
• Keno – RTP of around 75% (house edge of 25% or higher)
• Slot Machines – RTP varies from 85% to 97% depending on the game

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Conclusion

Understanding the relationship between RTP, odds, and house edge is the key to smarter gambling. Games with a higher RTP and better odds give you a greater chance of winning — but the house edge ensures that the casino always maintains a long-term advantage.

• If you want to increase your chances of walking away a winner, focus on games with high RTP and low house edge — like blackjack, baccarat, and European roulette.
• And remember — while luck plays a role in the short term, mathematics always wins in the long run!

FAQs

1. What is the difference between RTP and house edge?
RTP (Return to Player) represents the percentage of total wagers a game will return to players over time, while the house edge represents the percentage the casino expects to keep as profit. RTP and house edge are directly related — the higher the RTP, the lower the house edge, and vice versa.

2. Why is the payout in roulette different from the actual odds?
The payout in roulette is lower than the actual odds to ensure the casino makes a profit. For example, in American roulette, the true odds of a single-number bet are 37 to 1, but the payout is only 35 to 1, which creates the house edge.

3. How does RTP affect my chances of winning?
A higher RTP means the game will return more money to players over time, increasing your chances of winning. However, RTP is calculated over millions of rounds, so short-term results can still vary.

4. What casino games have the lowest house edge?
Games like blackjack (house edge as low as 0.5%), baccarat (1.24% on banker bets), and European roulette (2.7%) have the lowest house edge, offering better long-term winning potential.

5. Can the house edge change during gameplay?
No, the house edge is fixed based on the rules of the game. However, factors like strategy and betting decisions can affect your short-term results.

6. What’s a good RTP for a casino game?
An RTP of 96% or higher is considered good for online slots and table games. High RTP means more money returned to players over time.

7. Why do slot machines have different RTP values?
Slot machines have different RTPs because of variations in game design, bonus features, and volatility. High-volatility slots may have higher payouts but less frequent wins, while low-volatility slots offer more consistent but smaller wins.

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