House Edge vs. RTP

By Wagercomms

Understanding the Difference – and Why It Matters

There is a persistent misconception in the gaming industry around House Edge versus RTP (Return to Player). The terms are often treated as interchangeable. They are not — and the distinction matters.

Too many articles, even from reputable sources, incorrectly state that House Edge and RTP are simply two sides of the same coin. That assumption is inaccurate and undermines a fundamental distinction in how casino games are designed and operate.

Take, for example, a game with a house edge of 5.22%. That does not automatically imply an RTP of 94.78%. Anyone making that claim needs to revisit the mathematics. Even when described as “more or less the same,” the two concepts remain fundamentally different.

Passive vs. Strategic Play

House Edge is typically used in the context of table games, where it represents the built-in advantage the casino holds over the player — assuming the player is using optimal strategy. RTP, by contrast, is associated with passive games, most commonly slot machines or video poker, where the player makes no strategic decisions. It describes the fixed return percentage a game is designed to pay out over time.

RTP reflects games where player interaction is limited to pressing a button: spin, spin, spin. For example, a slot with an RTP of 96% is designed to return £96 for every £100 wagered over a very long period of play. This concept dates back to classic physical slot machines, often with three reels containing a defined mix of symbols and blank spaces. The predetermined distribution of those reel positions establishes the game’s payback — the Return to Player.

The Role of Player Decision-Making

House Edge, however, is both theoretical and dynamic. It is a statistical measure of the casino’s advantage if the player makes mathematically optimal decisions throughout play. In table games such as blackjack, poker variants, or bespoke games like Draw Sevens™, the actual edge the casino enjoys can shift significantly depending on how the game is played.

Consider blackjack:

— Under the London deal, a six-deck shoe played optimally results in a house edge of approximately 0.55%.
— With a Peek deal under the same conditions, the edge drops to around 0.46%.

While the difference may appear minor, small changes in game rules — or player behaviour — compound quickly. Optimal play requires correct decisions at every turn. Deviating from those decisions increases the house edge. Hitting on 15 in the wrong situation, or splitting two 10s against a dealer’s 10, does more than affect a single hand — it alters long-term expectation.

Why It Matters

Some may argue the distinction is negligible — and perhaps it is over a handful of hands at low stakes. But over several hundred hands in a session, particularly at higher stakes, the impact of poor decisions compounds rapidly. At that point, the player is no longer playing blackjack at a house edge of 0.46%, but at a significantly higher disadvantage — one created by decision-making, not game design.

— RTP is a fixed, passive metric describing what a game is designed to return.
— House Edge is a variable, strategic metric dependent on player behaviour and decisions.

They are not interchangeable. And in a professional gaming context, understanding the difference is not optional — it is essential.