Even beginners know that the casino has a certain advantage over the players. It is also known as the house edge. The payout percentage of each slot machine determines this advantage. If you are already running into unfamiliar words, don’t worry. This’s fine.
Any newbie suffers from not knowing new terms. Volatility, RTP, variance, and other terms make it difficult to get high from the game. Perhaps you think that you don’t need to know confusing and “overclever” words to be successful in the game. But it’s not so. If you want to really understand the game, you should understand some terms and the mechanics of how slots work.
Further, we will explain everything in simple words using the example of two terms: the payout ratio and variance.
Payout ratio meaning (RTP)
Imagine that you have become a professional casino player. Your task is to beat the casino and earn yourself a cool car or something you like. Thus, you must consider many factors. The most obvious of these is the expected return of the slot.
To paraphrase, this is the payout ratio. This term is also called RTP (return to player) or the payout percentage.
In simple words, the payout ratio is the stable bet of the total potential winnings divided by the total wagered amount.
The house edge formula (the advantage of the casino) is simple and is calculated as 100% minus RTP.
For example, the RTP of a certain slot is 95%. Then the house edge = 100% – 95% = 5%.
But this is the general payout ratio formula. Let’s look at examples of RTP calculation for some popular games.
RTP in different games
Slot machines. Usually, the payout percentage in slots fluctuates between 92% and 99%. However, a larger number is still in the range of 95-97%. How you can calculate RTP in this case? In fact, there are many factors involved. Starting from the symbols on the reels and ending with the paytable.
Blackjack. As you know, blackjack rules vary from casino to casino. Consequently, the percentage of payouts in this game will vary. However, speaking of the basic hand, the RTP of blackjack is usually between 95% and 102%. Moreover, the payout percentage changes as the dealer deals cards. Some players, who you know as card counters, try to catch the moment when the RTP is above 100%. However, it is worth saying that the casino also has methods for detecting such moments and preventing them.
Roulette. If you have a choice, play European roulette. Its RTP is much better. Why? Let’s count on an example. Let’s say you bet on black color. The probability of winning will be 18. That is how many black numbers are in European roulette. The total number of digits is 37 (including a zero). Therefore, the payout is 2 times the bet. Now we count: 2 * 18 / 37 = 0.973 = 97.3%. RTP will be the same for all types of bets (on colors, numbers, etc.).
Volatility meaning
Volatility is synonymous with variance. It means how often you can win by playing a particular slot. Volatility could be high, medium, and low. Slots with high volatility make it possible to win rarely but in large amounts. Slots with low volatility allow you to win more often but in smaller amounts.
Generally, a volatility index under 5 is considered low. Above 15 is considered high. Anything in between these numbers is considered medium volatility.
In roulette, for instance, when you bet on a color, all bets are paid double. When you bet on a number — in a ratio of 36:1. In slots, everything is much more complicated due to the many ways to win. That is why slot providers use concepts such as high, medium, and low volatility.
Does bet size affect volatility?
Of course. Because the RTP calculation formula includes the bet size. To calculate the return percentage, use the “rule of thumb”. The larger the bet size, the higher the RTP of your betting system. Here is an example of how to use it in practice when playing roulette.
There are 2 players: Player 1 and Player 2. Their goal is to win $500 at the casino’s roulette. Player 1 bets $20 each round and Player 2 bets $5 each round.
If Player 1 completes 84 rounds and still wins $500, then the RTP will be 48.68%.
Player 2 will need more rounds to win the same amount. Approximately 706. Then the RTP will be only slightly above 3.5%. That is, if Player 2 wants to leave the casino with a profit of $500, he must win 80 more rounds than he loses. This happens quite rarely in roulette, you see.
From all this, we can conclude that high volatility is better than low volatility. This means that it is more profitable to play for large amounts than for small ones.
Takeaways
The payout ratio is the percentage of return to the player during the game.
Typically, the payout percentage in the slot ranges from 95% to 97%. To calculate this indicator, you need to take into account the type of slot, its volatility, the amount of the bet, and many other factors.
Variance (or volatility) is an index of the amount of winnings.
Volatility could be high, medium, and low. High volatility is when you win rarely, but a large amount. Low volatility is when we win often, but a small amount.
Many players prefer to play for large amounts and in high-volatility games precisely because of the opportunity to leave the casino with a significant profit.
