What Are Odds?
Odds are just one way of expressing probability. It's just a mathematical way of looking at the probability of something happening. All probabilities are relations between events.
Here is an example:
You toss a coin. You want to know how likely it is that he will land on his head.
You have 2 possible outcomes: heads or tails.
Only one of them is the result you want to be able to have.
½ is the probability that the coin will land upside down.
This probability can be expressed in several ways. A fraction is one possibility, but you can also convert that fraction to a percentage (50%) or a decimal (0.50).
But this article is about quotas. How to convert probability to odds?
Just compare the number of ways it can't happen to the number of ways it can happen.
In the coin toss example, this means the odds are 1 to 1 or even the odds.
What are House Odds?
One way to look at house odds is by paying off a bet. If the house calls with odds lower than your odds, it will show a profit over time.
Here is an example:
You are in a casino that offers you a 4 to 1 payout if you bet on a single number on a roll of a six-sided dice. The odds of winning are 5 to 1. Bet $ 1 each time, or a total of $ 6.
On 5 of those rolls you lose a dollar. They are - $ 5.
On 1 of the rolls you spin, you win $ 4. (Bet pays 4 to 1, remember?)
$ 4 minus $ 5 results in a net loss of $ 1. Of course, you can gain or lose some in the short term. But in the long run, your actual results will be similar to your theoretical results.
What Are True Odds?
True odds are the actual odds of the bet. The difference between actual odds and payout odds is where the house gets its edge over the players. This way, the casino makes a profit on a consistent basis.
Here is another example:
You play roulette and bet a single number on number 2. There are 38 numbers on a roulette wheel, each of which has an equal chance of hitting.
You have 37 ways to lose this bet and 1 way to win this bet.
The payout for this bet is 35 to 1.
The real odds for this bet are 37 to 1.
Let's take a look at a theoretically perfect example where 38 roulette bets line up. You win one of those bets and you get $ 35. But you lose $ 37 on the other $ 37 bets, for a net loss of $ 2.
All casino games work this way. The casino pays bets less than your odds of winning. Given a sufficient number of tries, the casino will almost certainly win, which is very predictable for every game.
What is a Cashback Percentage?
Another term that comes up often when discussing this type of topic is "refund percentage". This is a metric used to describe slot machines. Table games are almost always talked about in terms of "house edge", but video poker and slots are measured by their payout percentages.
The payback percentage is just the percentage of each bet that the casino is supposed to pay out as winnings over a long period of time. That's 100% minus the house edge.
Here is an example:
A casino in a Las Vegas bar is programmed to have an 80% return rate. This means that for every dollar you deposit, you get 80 cents back.
But that's not literally true. You could win $2 on one spin, then win $20 on another spin, then lose 30 spins in a row.
But over time, the odds on this machine are programmed to add up to 80 cents on the dollar. And in the long run, slots go faster than you think. Most slot machine players spin 600 times per hour - sometimes more.
Imagine a casino with 1000 slot machines, all receiving 600 spins per hour, 24 hours a day. That's over a million spins a day. At this rate, the casino expects actual results very similar to expected results.
In What Other Situations Are Odds Used?
One of the most common uses for analyzing payout versus actual odds is in poker. It is not a casino game and players play against each other. Poker players use a concept called "pot odds" to decide whether or not to call certain bets.
House odds and true odds are not difficult concepts to grasp. However, they are fundamental to the game. Casinos make their profits by paying bets at less than the odds. This applies to every bet in the casino.
Understanding how odds work is a fundamental step in becoming an educated player.
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