Which statement about hold percentage and house edge is correct?

Which statement about hold percentage and house edge is correct?

• A. Hold percentage always equals house edge
• B. Hold percentage is unrelated to house edge
• C. Hold percentage is an alternative term for win percentage
• D. Hold percentage does not equal house edge

Answer: (D)

Hold percentage and house edge measure different things. Hold percentage is the actual amount the casino wins divided by the total money wagered in a period, so it reflects real-time performance and variance from luck, promotions, game mix, and comp policies. House edge is the built-in mathematical advantage of a game—the expected percentage of each bet that the house would keep in the long run, assuming infinite play. Because one is a realized, period-specific rate and the other is a theoretical long-run expectation, they are not the same. Over the long run they tend to move toward the house edge, but in any given period the hold percentage can be higher or lower. That’s why the correct statement is that hold percentage does not equal house edge.

Hold percentage and house edge measure different things. Hold percentage is the actual amount the casino wins divided by the total money wagered in a period, so it reflects real-time performance and variance from luck, promotions, game mix, and comp policies. House edge is the built-in mathematical advantage of a game—the expected percentage of each bet that the house would keep in the long run, assuming infinite play. Because one is a realized, period-specific rate and the other is a theoretical long-run expectation, they are not the same. Over the long run they tend to move toward the house edge, but in any given period the hold percentage can be higher or lower. That’s why the correct statement is that hold percentage does not equal house edge.