Thursday, 28 September, 2023

# Understanding RTPs, Variance, and Volatility in slots Introduction to RTPs, Variance, and Volatility What is an RTP?

An RTP is a return to player percentage. This is the amount of money that is paid back to the player over time, expressed as a percentage. The higher the RTP, the more money is paid back to the player. Variance and volatility are two measures of how often and how much money a slot machine pays out. Variance measures how much a machine pays out in comparison to its average payouts, while volatility measures how often a machine pays out.

What are Variance and Volatility?

In gambling, variance and volatility are two important measures that help to determine how risky a particular game is. Variance measures the dispersion of returns around the mean, while volatility measures the fluctuations in those returns.

A game with high variance will have larger fluctuations in returns, while a game with high volatility will have more frequent but smaller fluctuations. Games with high variance and high volatility are considered to be very risky, while games with low variance and low volatility are considered to be less risky. Slots typically have higher variance than other casino games, meaning that they can have large swings in fortunes over short periods of time. However, they also tend to have lower volatility, meaning that the fluctuations are not as great. As such, slots can be considered to be somewhere in the middle when it comes to riskiness.

Of course, these are generalizations and there will always be exceptions. Some slots may have very low variance but be highly volatile, while others may have high variance but be quite stable. It is important to remember that all casino games involve some degree of risk and there is no such thing as a guaranteed win.

Differences between Variance and Volatility

The key difference between variance and volatility is that variance measures how much a slot game pays out over time, while volatility measures how often a slot game pays out.

Variance is a measure of how much a slot game pays out over time. It’s calculated by taking the average payout of all spins and subtracting the expected payout of those spins. The higher the variance, the more volatile the game is.

Volatility, on the other hand, is a measure of how often a slot game pays out. It’s calculated by taking the standard deviation of all payouts and dividing it by the square root of the number of spins. The higher the volatility, the more volatile the game is.

So, to summarize, variance measures how much a slot game pays out over time, while volatility measures how often a slot game pays out.

How to Calculate RTP, Variance and Volatility

When it comes to gambling, understanding return to player (RTP), variance, and volatility is key to having a good time and – hopefully – winning some money. Here’s a quick guide on how to calculate all three.

RTP stands for “return to player” and is the percentage of money that is returned to the player over the course of a game or session. For example, if a slot machine has an RTP of 96%, then for every \$100 bet, the player can expect to receive \$96 back. It’s important to remember that RTP is just a theoretical number – in reality, your results may vary.

Variance measures how much your results will deviate from the RTP. A low variance means that you can expect your results to stay close to the RTP; a high variance means that your results will be more unpredictable. Volatility is simply a measure of how much risk is involved in playing a particular game. High-volatility games are riskier, but also have the potential for bigger payouts. Now let’s put all this together and look at an example: Say you’re playing a slot with an RTP of 96% and a variance of 10%. This means that over the long run, you can expect your average return to be \$96 for every \$100 bet. However, in any given session, your results may deviate from this number – you may win more or less than \$96. This game also has medium volatility, so it’s a relatively safe bet with moderate potential rewards.

To quickly summarize, RTP is the percentage of money that is returned to the player over time; variance measures how much your results will differ from the RTP; and volatility is a measure of how risky a game is. Knowing these three figures can help you make informed decisions when it comes to gambling!