House Advantage & Independence of Events Explained

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Today we’re going to talk about something known as House Advantage and independence of events, so buckle up!

randomness

The idea of slots being random, while at the same time allowing for casinos to have a house advantage, may seem confusing and in conflict. You may ask: “Doesn’t this in itself prove that games are rigged?” It’s a valid question for which we will do our best to provide an answer. Below are two examples that help explain how these concepts can exist in gambling.

Example 1: Randomness WITHOUT House Advantage

Jim and Jenny each have 100 coins. They come up with the idea to play a simple coin flipping game. If the coin lands heads up, Jim takes 10 coins from Jenny; if the coin flips tails, Jenny takes 10 coins from Jim. It’s adequately clear how the game will proceed to unfold over time. Each flip of the coin is fully random (although some will argue that the human factor has an impact on the actual toss), with both sides having an equal 50/50 chance of occurring.

In this example, none of the players has any advantages over the other and its safe to presume that in the long run, the winnings will be evenly distributed. Try 100 flips and see for yourself. Remember though – just because things are random doesn’t mean unlikely events cannot happen.

Example 2: Randomness WITH House Advantage

In example 2, both players still start with 100 coins each, but this time it’s been agreed that if Jenny wins, she’ll only be allowed to take 9 coins from Jim, while Jim’s payoffs remain the same as before. This is what is known as “edge” or “house advantage”.

Nothing has changed in terms of the physics of the game. It is still completely random and fair, and both will still have the same hit frequency as before. Jenny’s money will, however, slowly drop towards zero due to the new payoff structure introduced. Mathematically, her reward odds are now slightly lower than the actual odds.

In the world of online slots, house advantage is better known as Theoretical Return to Player (RTP). It’s simply speaking the same as in the examples given above but involves more complex mathematical models. The reel set, symbols on the reels, and value of the symbols, all work together, carefully calculated to provide a long-term edge for the casino.

If, for example, a math designer wants to increase the RTP ever so slightly, one easy solution may be to slightly increase the value of a low-paying symbol, also known as card suit symbols. The effect of this is that the games are indeed random, but still profitable for the operator.

danger high voltage big win
Multiplier win in Danger! High Voltage

But no one would ever play online slots if there wasn’t more to it than described in example 2. That’s where variance comes in, and variance ladies and gentlemen is what makes slots fun. We’re not going to delve too much into variance, but it’s a factor that sometimes results in players crushing the slots. Online slots are usually categorised low, medium, or high variance. A low variance slot is often low potential but pays more frequently. A high variance slot is the opposite, more designed like a lottery, and may collect funds from 100 players to pay a single big win to only one lucky player.

Variance, just like house advantage, is written into the game using mathematical calculations. This can be done by introducing a random multiplier symbol while lowering the overall value of the low-paying symbols. A good such example is Danger! High Voltage by Big Time Gaming, a game developer known for its super high variance games.

Another relevant concept in gambling is the independence of events, which is closely related to randomness. In online slots, independence of events means that previous spins have no effect on the subsequent spin. Roulette is a good example to demonstrate the independence of events – the result being entirely independent of all previous spins, no matter what colours or numbers have come up before. It can be hard for some to accept, but slot machines work in the same way.

Do you still have that coin in your hand? Say you flipped your coin 10 times, and each time it landed on tails. The chance of getting tails the 11th time remains 50/50. It’s a common myth in gambling that an event is due to happen if it hasn’t happened in a while.

With all this said, there’s always the possibility of poorly designed games. Visually, a game may give the impression that triggering a bonus is much more likely than it really is. A good such example is Cazino Zeppelin by Yggdrasil Gaming, or Immortal Romance by Microgaming, two games notorious for scatter teasing. Moreover, if you play on a rouge casino, you run the risk of playing on pirated slots that are indeed rigged. A safe way of avoiding such risk is to stick to the casinos on our best online casinos list. This way you can feel safe knowing you’re playing fair games certified and tested by independent test houses.

Of course, for some, it will never be enough to convince them of the fact that slots, just like table games, are truly random. Either way, our objective has not been to win the conspiracy theorists over, but rather to give some insight into the engine working behind the visual presentation of online slots for those interested.

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