A house-banked game is conducted by a gambling enterprise such as a casino, a lottery, a bingo hall, or an organized charity. The game is one in which the player opposes the gambling enterprise, and either the player or the enterprise wins the bet (unless there is a tie). There may be many players (thousands as in a lottery) or a single player (e.g., one player at a blackjack table), but there is only one house – one gambling enterprise. The house (enterprise) runs the game and puts its resources (money) against the resources (money) of all of the players.
Most, but not all, casino games are housed-banked games. These include blackjack, craps, roulette, baccarat, punto banco (minibaccarat), and the big wheel. Las Vegas sports betting on football, basketball, baseball, and hockey games is also house banked. In all of these games, each player at the game is individually wagering money against the house. Most commercial (and Native American) bingo games are house banked, although the players are pitted against each other to see which one (or several) is the first to fill a card or line full of numbers. The game is banked if the house guarantees a specific winning prize to the players regardless of how many players are playing or how much money the players have wagered. If there is a predetermined prize, the house is engaging in gambling, as it is putting its resources at risk – it may lose money if too few players are in the game or if it has a high prize for a player covering a card in so many calls of numbers, and the player does so. The house would not have to give out the prize if no players accomplished that goal, however, and its winnings would be higher than otherwise.
Some charity bingo games are not house banked. In these the house awards a prize based upon the money that is actually wagered by the players when they purchase cards. The house may take out a percentage of the money as its share and then divide the rest of the money among the winners (or winner) of the bingo game. In this case the game is player banked, and the house is merely an agent managing the players’ money for a fee.
In most lottery games, a player is guaranteed a prize of a certain amount of money if the player has a winning number. In the case of instant tickets, a finite number of tickets are sold. If all of a batch are sold, the lottery is like the bingo organization, as it merely manages the players’ money, shifting it from losers to winners and taking out a fee. Instant ticket games are not house-banked games. On the other hand, if the player (or a random number generator) picks a number that is played (for instance, in a pick three, pick four, or pick five game), and a winner is guaranteed an individual prize that is given regardless of the actual number of players or winners in the game, then the game is house banked. The lottery is risking its money against the play of each individual player. The house-banked nature of the pick-three game was highlighted in 1999 when the Pennsylvania lottery attempted to close down play on certain popular numbers (777, 333, 666) in order to avoid high financial losses if the popular numbers were selected. The lottery knew it was in a risky house-banked situation, and it wished to minimize its risk. Indeed, the lottery officials knew what they were doing. In 1979 one game was rigged by a contract employee of the lottery who controlled the number-generating machine. The number 666 was chosen as the winner. Not only did an inside group of cheaters win a lot of money, but so did regular players who always played the popular 666 – known as the devil’s number because of references in the Bible’s Book of Revelation. The state of Pennsylvania took a severe loss on that day (see Crime and Gambling).
Lotto games have giant prizes that are based upon amounts of money that have been wagered by the players. There is a superprize that is usually awarded to a player (or all players on a shared basis) who selects all six winning numbers (numbers may include one through fifty). If no player selects all the winning numbers, a pool of money is gathered from ticket sales and transferred to the superprize for a subsequent game the next week. In a way, the giant lotto prize can be considered a player-banked game, but this is not truly the case. Only if the money played in the single drawing contributed to the giant prize would the game really be player banked. No lotto game is played this way. The starting game after a giant prize has been given away the previous week offers a guaranteed superjackpot prize, regardless of how much is wagered during that first game. In Texas, the state sets the superprize for the starting week at $4 million. If a player selects all the winning numbers in the first drawing, the state is definitely a loser. The lottery organization is banking the game. The fact that superprizes are shared does not change the house-banked nature of the game. Also, there is no legal requirement that the government continue to have new games after superprizes reach multi-million-dollar levels, although so far no major games have been discontinued. Moreover, each lotto game has guaranteed prizes for players who correctly pick only some of the winning numbers, again making the game essentially a house-banked game.
Often a lottery will put a cap (ceiling) on the amount it gives to big winners without changing smaller prizes and without guaranteeing that there will be a superwinner at all. These are house-banked games, as the lottery is risking its money against the wagers of the players. The lottery is either a small winner, a big winner, or occasionally a loser. An example of such a game is run in Texas. There the Texas Millionaire Game asks players to pick four numbers between zero and ninety-nine. Guaranteed prizes of specific dollar amounts are given to players who select either two or three correct numbers. Players matching all four numbers win $1 million. If no one correctly picks the four numbers, the lottery is the winner pure and simple. If more than ten people pick the correct four numbers, they must collectively share a prize of $10 million. The lottery caps its losses, but the game is still a house-banked game just the same as a blackjack game in a casino.
The most typical games that are player banked rather than house banked include live games of poker, pari-mutuel games on activities such as horse and dog races, jai alai games, and lottery instant ticket games – when all tickets in a batch of tickets are sold (see Pari-mutuel Wagering Systems; Player-banked Games).
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