How many bets until a 1% house edge is visible? The (k·σ/e)^2 rule, with the numbers
A 1% house edge is the headline number on every casino game, and it is a number no player ever sees. Not because it is hidden, but because it is small next to the thing it sits inside. Here is the arithmetic, with the numbers for a coin-flip bet. Take a bet that wins with probability p and pays m times the stake (profit m − 1), otherwise loses the stake. Per unit staked: expected return: p · m, so the edge is e = 1 − p·m standard deviation: σ = sqrt(p · m² − (p·m)²) For a roll-under-50 dice
