Gambling Casino Odds - Variance and RTP
All gamblers generally realise that any casino’s primary objective is to make money, and… they do.
The land-based casino industry is worth billions of dollars each year, with online casinos being worth even more – tens of billions of dollars!
While it’s true that online casinos exist to make a profit, the majority of this profit comes from gamblers who a) are inexperienced and make mistakes playing, b) drunk players, and c), high-roller players, who regularly play nose-bleed stakes, and can lose hundreds of thousands of dollars in a singular session.
Of course, winning in an online casino is completely possible to, and thousands of players win each hour!
The important thing is knowing when to stop, as well as understanding how the games work, and the online casinos are making their money, so you can adapt accordingly, and play the best possible strategy you can.
In this article, we’re going to look at “Odds in Gambling”, and this means the way that the casino make a profit – guaranteed – over the long-term. So, let’s get started.
Odds are representations of how likely – or unlikely – an event (such as a football or baseball team winning) is to happen. In the United States of America, odds are generally displayed as money-line odds.
Money-line odds – also sometimes known as “American Odds”, allow for two possibilities.
A positive one, and a negative one. If a figure given by a bookmaker is positive, the odds are revealing how much money would be won on a $100 bet. So a $100 bet on, could appear as +4.
Now, the European (and generally worldwide) format is decimal odds. An example here, would be a 1/1 fractional odd displaying as 2. In decimal terms.
OK, so odds for sports betting are relatively simple – but how does the casino use them?
Well, in Casino Table Game situations, all games have fixed odds – this means they don’t change over time. For instance, the odds-on Roulette change, no matter how many thousands, millions, or billions of spins you play. Fairly straightforward.
Online casino Video Slots however, is where things become a bit more complex. Because Video Slots are generated randomly by a computer, and there are no “fixed odds” that come with games, casinos introduce what’s known as a RTP, or return-to-player percentage.
An RTP is a percentage, that dictates how much money a Video Slot can expect to make over a long-period of time. For instance, if a Video Slot had a RTP or 96%, the casino could expect to keep 4% of all wagers staked, while the remaining 96% is returned to players.
Now remember, this is spread over a long period of time, and an RTP is factored in over the course of many months, or years.
That said, it does dictate how a slot will play, and this is where variance comes into play.
Variance is the volatility of a slot. Or, as players so elegantly put it; this game’s done me today!
Basically, it means how often the Video Slot will payout. Now, were you to play a low-variance Video Slot, you’d see a fairly large number of wins… but the win sizes wouldn’t be particularly big – monster wins would be sporadic.
Next is medium variance, and a medium variance Video Slot is like a middle-ground between a low-variance slot, and a high-variance one.
A high-variance Video Slot is a game many players LOVE… while many others choose to avoid it like the plague…
And it’s because, while playing, you won’t experience a huge number of wins – and when you do, they’ll be relatively small – but when you hit the bonus-round, free-spins, or BIG wins… they’re worth a LOT of money – potentially 5-20,000X your stake… and that’s why they’re high variance! They pay more, but less often – simple!