How to Calculate the Risk Involved in a Casino Game?

• Published: November 4, 2013
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Expected loss is the value you could expect to lose at a game if you were to play it forever. Online casino games are based on chance, so the expected loss can only tell you what would happen if you continued to play the same game with the same luck factor for an endless amount of time. In reality, the relationship is a little more aleatory and full of surprises since many of us have seen online casino players turn into millionaires with one spin of the reels.

Many people do not trust the concept of expected loss because it carries a negative connotation about online casino games. Now that we have clarified that it does not actually imply you will always lose a certain amount of money, we can proceed to explain to you how it can help you calculate something that will come in more handy: the risk between different games.

You can use the expected loss value to compare how risky games are in comparison to each other. The expected loss depends on three variables: how much you bet per round (wager), how many rounds you play per hour (number of hands), and the house edge. In order to calculate expected loss use the following formula: wager x house edge x number of hands per hour = expected loss. If you are playing Blackjack for $5 a hand, a 0.17 percent house edge at 60 hands per hour, then you would calculate this: $5 x 0.17% 60 x 0.17% = $51. The expected loss is that if you wager $5 a hand for 60 hands with a 5% house edge you will lose $51. Basically you have bet $300 and can expect to lose $51 from those.

If you are playing Roulette at $1 per spin, making the same bet on red every time, at a rate of 300 spins per hour with a house edge of 5 percent, you will have the following calculation: $1 x 300 x 5% = $15. In this case you have wagered the same $300 that you would have wagered in Blackjack, but you will lose less than half of the expected loss for the blackjack game. This means that in this situation Blackjack is the riskier game and you would lose less money in the long run if you played Roulette. Remember that house edge and odds vary, so always check them before calculating.