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I'm sure this is a silly and banal question next to all the crazy string theory and lambda calculus questions on this site. Perhaps it's a nice, easy, refreshing break. Anyway, on to the casino...

SatoshiDice is a betting website. You expose your money to risk and gamble for a reward.

I know the house maintains an edge, but I'm just having trouble reasoning through it. Would someone mind explaining it to me with a simple example?

For example, say I wager 1 bitcoin on the "lessthan 48000" bracket. I have a 73% chance of winning, but the payout is only "1.323x", and the house takes a 3% rake. So, 73 out of 100 times playing I'll win slightly over 1%, and 27/100 times I'll lose everything, so... well, here's where my brain pretty much shuts down. Maybe it's just time to get some sleep. :)

I asked this question here instead of http://bitcoin.stackexchange.com because it seems more about math than bitcoin.

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the table says that your chance to win is 73.2422 % and then you get 1.323 times of your bet. then you win about 32,3% ($(1.323-1)*100$). Because of $0.732422*1.323 = 0.968994306$ the casino wins about $1-0.968994306=0,031005694$ that is about 3.1%

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    $\begingroup$ In particular, OP should notice that the house 3% rake is built into the payoff odds, and not excised separately. $\endgroup$ – MJD Jul 1 '12 at 7:49

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