Basis Point

What is Basis Point?

A basis point is one hundredth of one percent, borrowed from finance and used in gambling to describe small differences in edge or margin.

Why it matters

Edge differences look small in percentage points. Basis points make the size of the gap visible.

Example

The gap between a 2.70 percent and a 5.26 percent house edge is 256 basis points.

Common misunderstandings

• A difference that sounds trivial as a percentage is large in effect. 256 basis points is roughly double the cost per bet.

Frequently asked questions

What is a basis point in gambling?

One hundredth of one percent. It is used to state differences in house edge, margin or RTP without ambiguity.

Why not just use percentages?

Because a change from 2.70 percent to 5.26 percent can be read as a 2.56 point change or as a doubling. Basis points remove that ambiguity.

Related terms

• House Edge
• Margin
• RTP (Return to Player)
• Odds