The calculation, by example
European roulette has 37 pockets, but a single number pays 35:1. If you bet 1₪ on all 37 numbers, you'd pay 37₪ and get back 36₪. The loss is 1₪ out of 37 — that's 2.70%.
That's it: house edge is exactly the gap between true odds and payout. Every house game works on the same principle.