So out of the 37 possible outcomes you would win 18 of them (+£180) but lose 19 of them (-£190) leaving a net loss, or cost, of £10. To win your bet you need a black number to come up - there are 18 black numbers and 19 numbers that aren't black (18 red + 1 green), making the probability of a black number being spun 18/37. However, the probability (or odds) of winning your bet isn't quite 50/50. The payout for betting on 'black' is 1:1, meaning that if you bet £10 and won, you would receive £20 back (£10 profit + the return of your £10 stake). In this game there are 18 black numbers, 18 red numbers and one green 0. Lets take European Roulette as an example. The concept of a house edge is actually very simple and is all based around mathematics and probability. The inclusion of a house edge, sometimes referred to as the house advantage, is how casinos make their money.

But how exactly does a casino do this? In this article we will examine the fundamental principles of how a casino works - looking at the house edge, RTP and variance. Just like the local video arcade or bowling alley, a casino is a business which needs to make money in order to stay open.