Roulette Expected Value
Experienced gamblers and gambling writers use the term "expected value".
Especially in a game like roulette, you'll hear the words "roulette expected
value" in some combination or another, but what often is lacking in the
discussion is a clear definition of expected value in a casino game, or what
that means for the player. Sure, you can puzzle it out in context, but
readers might be confused on the finer points, so I decided to write a page
on the expected value in roulette.
Let's start by defining our terms.
What Is Expected Value?
"Expected
Value" is the amount a casino expects to make on average on a game or a
particular bet. The expected value of a game is synonymous with "house
edge", and the expected value number is the house edge a casino holds and
can expect to make on any given spin, hand, session, hour, or day of that
game.
That doesn't mean the expected value holds true for any given spin, hand, or even day of a particular game. It's just what the casino, its managers, and its bookkeepers can expect to make. There are wild swings in luck in a live or online casino, and the casino operators have to be prepared to deal with the wild swings, just like an individual gambler has to be. Even casinos need gambling bankrolls.
Roulette House Edge
The difference between players and casinos is that the casino operator expects to see positive numbers, while a gambler playing in a casino has to expect to lose. That's the strict definition of expected value--the amount the casino expects to win on a game.
Roulette Expected Value in Live Casinos
The expected value of certain games have to be high in brick-and-mortar casinos, because the overhead is so high. They have to pay for a large staff of dealers, waiters, and bookkeepers. They have to buy all those expensive gaming machines and gaming tables. They have to pay off the building expenses of the casino, along with utilities and licensing fees and a hundred other smaller expenses. A casino has to clear a lot of money to stay open.
That's where games like slot machines and roulette come in. These games have high expected value, such as the 5.26% expected value in roulette. These games cover a lot of the expenses the casinos run. Slot machines alone are said to generate about 70% of a casino's revenues, which should tell you all you need to know about how crazy it is to see books about how to win at slots. The same should be said for roulette.
Expected Value at Poker and Blackjack
You might think poker and blackjack would be the games casinos would make their money on, since these are the glamorous games in the casino. Live casinos really don't make a lot of money off of poker, though they do make steady money--they don't have a stake in the game. With blackjack, the expected value is often under 1%, so they have to run through a lot of hands of blackjack to keep the casino doors open.
Michael Shackelford, the Wizard of Odds, gives a good rule of thumb in casino gambling. The less thought you have to put into a casino game, the higher its house edge is. That's why slot machines and roulette have such high expected values--they require almost no strategy to play them. That's good news, if you want to go to the casino and see "action" at a relaxing pace and without a ton of decisions to make. We all make plenty of decisions in the week, so a little diversion is nice every once in a while.
Roulette Variance
So why play Roulette at all? There are two answers to that question. One is that you enjoy roulette. Roulette isn't as frenetic as other casino table games, and it doesn't ask you to make a lot of stressful decisions. If you prefer that in your casino gambling and you prefer betting on something besides the slot machines, roulette is your game.
The number two answer to that question is "variance". You understand the odds, but realize there's still a chance you beat the odds, anyway. Variance is how much the results vary from the expected value. It's not set in stone that you're going to lose at roulette; it's just likely to happen. In any single gaming scenario, the variance might be so great that you walk out of the casino a big winner at roulette. Just don't let anyone tell you they have a system that is going to beat the Roulette expected value, because they're either crazy, ignorant, or trying to sell you something.
