This is how you calculate the house edge: let's take European Roulette as a practical example. If you bet $1 on red, you have an 18/37 chance of winning, as there are 18 red numbers, in addition to 18 black numbers and a single zero. However, you also have a 19/37 chance of losing $1. So the house edge can be calculated as follows: The expected Value is (1)(18/37) + (−1)(19/37) The expected Value is 18/37 − 19/37 The expected Value is −1/37 The expected Value is −2.7% Therefore, the casino's house edge is 2.7%.