How Does the Casino Profit from Blackjack?

Since blackjack is a 50-50 game, it seems that the odds of winning blackjack should be 50-50 as well, even with a house edge. So then how do casinos profit from blackjack if that’s the case? There are several ways that casinos profit from blackjack.

Casinos Profit from the House Edge in Blackjack

The house edge in blackjack is due solely to the fact that players must complete their hand before the dealer does. If a player busts, the player always loses, even when the dealer busts, too.

This is the only source of advantage for the house. But it’s a big one, giving the house an advantage of nearly 8% in an eight-deck game. However, the player has some advantages that whittle down this house edge.

• The player wins 2 to 1 on blackjack, while the house wins 1 to 1 on blackjack.
• The player can stand on any number. The dealer must take a hit if their hand is 16 or less, increasing the chance of a bust.
• The player can split a deal of two identical cards, increasing the chances of a win or push. The dealer cannot split.
• The player can double a bet after the initial deal in exchange for one more card, while the dealer cannot.

All told, these player advantages can erode the house edge to an average of 0.5%.

Casinos Don’t Really Profit from the House Edge in Blackjack

 The casino’s house edge of 0.5% in blackjack is miniscule. The money that casinos actually make from individual games is called the casino hold (or hold percentage). The casino hold is the percent of chips purchased by the player that the casino wins back. This number is always bigger than the house advantage.

The casino hold for blackjack averages between 11 and 14%. Where does all that money come from?

Casinos Profit from Bad Players in Blackjack

First, the house advantage is only true for players who use a sound, mathematically-based hand-by-hand strategy while playing blackjack in the world’s best online casinos or brick-and-mortar locations. In other words, the house edge is 0.5% for the good players.

For everyone else, it’s higher. The house edge for the average blackjack player is between 2 and 3%. The folks who are genuinely bad at blackjack – a bigger crowd than you might think – fare even worse. That still doesn’t explain the high casino hold on blackjack.

Casinos Profit from Re-betting in Blackjack

Over time, the house advantage gradually eats away a gambler’s stake. This is called the grind. Sit at a table long enough, and that 2% house advantage adds up to a 10% loss. Then 20%. Then 30. And so on, until it hits 100%.

The worse you are at blackjack – or the longer you keep re-betting — the more you lose in the grind. The grind is the primary reason the casino hold is 11-14% on a game with a house advantage of 0.5%. Yes, the high casino hold for blackjack all depends on bad players.

Casinos Profit from Free Drinks During Blackjack

All the player’s advantages at the blackjack table rely on ability, judgment, and consistency . . . and knowing when to walk away before losing too much.

Drinks erode all that. An intoxicated player could easily inflate the house edge back to its original 8% or more. Inebriated players are also more likely to stay put and re-bet all their chips away. The casinos count on it.

Casinos Profit from Reducing the Player’s Advantage in Blackjack

It is true that the greater the house advantage, the greater the casino hold. For this reason, casinos increase the house advantage by changing the game play or the rules to chip away at the player’s advantage during blackjack.

• Using two, three, or up to eight decks reduces the probability of blackjack. The house advantage for a single deck is 0.17%. For eight decks, it’s 0.65%.
• Reducing the blackjack payout from 3:2 down to 6:5 increases the house advantage 1.4%. Reducing it to 1:1 (as in most video blackjack games) increases the house advantage 2.3%.
• Not allowing players to double down on a bet increases the house advantage 0.12%.
• Requiring the dealer hit a soft 17 (a hand totaling 17 with at least one ace in the hand) increases the house advantage 0.2%.
• Restricting doubling down to only a few two-card hands (the “Reno rule” or “European rule”) also increases the house advantage.

These variations often work in tandem. For instance, casinos will restrict rules that give the advantage to the player if only one or two decks are used. They will loosen rules at eight-deck tables of blackjack.

A good player pays close attention to all variations in game play, rules, or payouts and chooses games with the lowest house advantage. The casinos profit from the vast majority of players who aren’t paying attention to these variations.

Casinos DO NOT Profit from Cheating in Blackjack

You may believe that casinos cheat at blackjack in order to be profitable. For instance, they remove one or two 10 cards from each deck to reduce the probability of a blackjack. Or the dealer uses sleight of hand to intentionally deal cards that bust a player’s hand.

The odds of this happening at a regulated casino are close to zero. Cheating may happen, even at regulated casinos; however, it is so uncommon that any extra money made is practically nothing.

The likelihood of cheating increases if you play at an unregulated venue or at an online site that you haven’t thoroughly vetted. In those cases, you deserve what you get.