The Basic Rules of Probability

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BetMGM @BETMGM Jul 28, 2022, 3:27 PM
The tote board from Race 8 at Happy Valley Racecourse on May 6, 2020 in Hong Kong

When it comes to understanding casino games, you should become familiar with the basic rules of probability. The mathematics underlying casino odds will help you work out whether a bet is worth pursuing. Probability means two things; the likelihood that something might happen, and the division of math that studies likelihood. Of course, you’ll be looking for casino games with the best odds, and knowing how to do that will greatly improve your online casino games strategy.

Let’s take a look at the basic rules of probability and how these are used in the gambling industry.

How to calculate the probability of an event

The first and most important concept to grasp is that probability applies to random events. Anything that can happen is considered an event. When you’re trying to predict the probability of something occurring, you’re predicting the probability of that ‘event’. 

A probability is always a number between 0 and 1. It’s simple, an event that will never occur has a probability of 0, whereas an event that will definitely occur has a probability of 1.

For example, if you flip a coin, there are only two possible outcomes, and both are equally likely. You can calculate the probability of the coin landing on heads. The probability would be 1/2 since there’s only one way for it to land on heads. This can also be shown as 0.5, 50%, or 1 to 1.

Another example that can help us understand calculating the probability of an event is rolling a six-sided die. Since you know that the probability of rolling a 6 is 1/6, you can deduce that the probability of not rolling a 6 is 5/6. 

Odds are a way to express probabilities

Close-up of playing cards on a roulette table

By nature, all probabilities are fractions. However, there are various ways that you can express a fraction. When you’re at the poker table plotting your next move, ultimately, you’re working out the probability of an event by comparing the number of ways an event can occur to the total possible outcomes. 

When it comes to casino game odds, you’ll need to compare the number of ways an event can happen with how many ways it can’t happen. This may seem confusing at first but it’s an important difference to calculate.

The three types of odds

There are three types of odds that you’ll discover when playing at a casino or looking at the latest sports betting action.

  • Fractional odds: Also known as British odds or traditional odds. These odds are sometimes written as a fraction, such as 5/1 or five-to-one.
  • Decimal odds: These odds represent the amount that is won for every $1 that is wagered on. If the odds are 5.00 that a certain horse will win, the payout will be $500 for every $100 wagered.
  • American odds: Also called moneyline odds. These odds are shown with a + or – sign assigned to the lower probability event with the higher payout. The favorites in the matchup will have a – symbol next to their name, and the higher the absolute value of the number, the better the chance of the bet winning. For example, a -150 favorite has a better chance to win than a -100. The underdogs will have a + symbol next to their name. The higher the number, the larger the underdog. Therefore, a +300 underdog has a better chance of winning than a +400 underdog.

Probability using a classic casino game

Roulette is one of the most popular casino games. Whether you play it at a land-based or online casino, roulette will deliver the classic casino ambiance and fun. The single-bet on the roulette wheel is considered one of the most popular bets. 

Let’s look at what the odds of winning the single-bet in roulette are. There are 38 numbers on a roulette wheel. If you’re going to bet on one of those numbers, there’ll be 37 possible ways to lose. So, your odds of winning are 37 to 1 or 1/38. Roulette is a great example to show how the casino gets the edge over the player. The bet pays 35 to 1 and since the odds of winning are 37 to 1 with a single-bet, over a long period of playing, the casino ends up winning a lot of money on this bet. 

How the house edge works

A croupier working at a blackjack table

When you’re playing casino games online, you’ll see the term ‘house edge’. It is the percentage of each bet that the casino calculates to win over the long run. In other words, the house edge is the difference between the payout and the true odds on a bet.

The house edge is a statistical average of how much the average sports and casino gambler can expect to lose over time when factoring a specific bet. For example, if you bet $100 on 38 spins in roulette, you’ll ultimately lose $3700 on the 37 losing spins. You’ll end up winning $3500 on your winning spin, based on the $200 difference which goes to the casino. 

To calculate your net loss, take the winning bet payout and the total amount you’ll lose on the 37 losing spins:

$3700 – $3500 = $200

Divide the net loss by 38 (the amount of spins), and you’ll get $5.26 per spin, which shows you the average loss per spin.

That means the house edge for the roulette casino game is 5.26%.

The house edge is a long-term mathematical prediction. It is important to know that anything can happen in the short-term, which is often the case. Players will hope for the occasional short-term run of luck. 

Understanding probability and odds will help your betting strategy

If you want to ensure that you’re playing casino games with the best odds, understanding probability will help you tremendously. For the most part, it is basic math with a level-headed perspective that will help you determine if you should place your bet, or whether you should call or fold when playing online poker.

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Our BetMGM editors and authors are sports experts with a wealth of knowledge of the sports industry at all levels. Their coverage includes sports news, previews and predictions, fun facts, and betting.

Our BetMGM editors and authors are sports experts with a wealth of knowledge of the sports industry at all levels. Their coverage includes sports news, previews and predictions, fun facts, and betting.