Understanding Payout Ratio and Variance

Understanding Payout Ratio and Variance image

There are two (2) essential characteristics of almost any “game of chance” – Payout Ratio & Variance (volatility). These are very important features of each and every casino game that every bettor should know to increase their chances of beating the statistics of the games. The principles behind these features are commonly used by most any games of chance in which a user bets against the “house edge” – this means that a particular game will collect bets and pays out those potential bettors that win, but somehow, casinos set an algorithm to assure that they always have the advantage in the long-run. Otherwise, online casino owners would be bankrupt by running those games.


The casino’s advantage is determined by the rules of the game and by the payout rules in every particular win – whenever the rules of the games are applied for over too many rounds, this means that casino-owners are confident that the total number of bets collected exceeded the total number of wins paid out. The set of rules work in favour of the casino’s operators in the long-run. Despite the fact that long-term statistics will only offer you the lowest chances of winning or worst beat you on any games of chance, but it’s quite common for the bettors to come to a casino to play and wager.


Payout Ratio (RTP) of Games of Chance

The “Payout Ratio” is the long-term rate of the total amount paid out divided by the total value of the collected bets. To make it more comprehensible, the RTP is simply the opposite of the “house edge” of the game.

  1. RTP = total money won divided by total money staked

  2. House Edge = 100% minus the Payout Ratio


Payout Ratio of a Game of Chance

Every game of chance has a Payout Ratio, and the percentage depends on what variant of the games you play. The RTP is the long-term rate of the total money that you won divided by the total money staked.


Here are some of the most popular game of chance that players normally play whether it be online or offline.


Roulette Payout (RTP)

The payout ratio of the game Roulette depends on the kind of variations you play. The European Roulette has a payout ratio of 97.30. The house edge is then computed as: 100% - 97.30% = 2.7%.


The payout ratio of American Roulette is slightly lower than that of the European Roulette which is 94.74%, making the house edge run at 5.26%.


Blackjack Payout Ratio

Blackjack is one of the most known games in casinos and this is because it offers the lowest house edge. Different casinos have different rules and so the payout ratio varies but using the basic blackjack rules and strategies, the RTP ranges from 99.54% to 102%. The house edge is at 1.46%.


Slot Machine Payout Ratio

Slot machines are played by many, too. The RTP of Slot Machine differs based on the slot machine you are playing and may range from 92% and 99%.

The Variance of Games of Chance

The Variance (volatility) of a game decides how your bankroll will constantly change when you’re playing the game. The volatility characteristic of the games will make a huge influence on your chance to walk away as a winner from a casino as the rule of thumb – The higher the variance, the better.


A game with higher variance will offer you much higher chances to win the amount that satisfies you in a round.


An expected more rounds end up with a higher percentage of losses and so you’ll prevent betting too much from your previous winnings, and also you lose much quicker.


You will have a higher chance of winning multiple bets, you can also bet less but win the same price. Since it does reduce the amount of your bet, therefore, it also cuts your long-term losses.


Payout Percentage of a Game and a Payout Percentage of a Betting System

If you want to be a smart player, you must distinguish between RTP of the game which applies only to a single game round and a payout percentage of your betting system which is determined by how you play during your whole stay in a casino. RTP gives a false impression to players that they statistically lose only a small fraction of their money but in reality if player’s place bets from their previous wins, they lose more.


The ideal betting method is one which has the same RTP as the game played. To achieve this, you must avoid placing bets from previous winnings and the easiest way to accomplish this is to wagers your allocated budget in one round then keep betting all-in until you lose or win a satisfactory amount of money. The biggest drawback of this tactic is that you’ll play only for a very short period of time.



There are many games of chance in online and offline casino and the RTP of your betting system solely depends on the casino game RTP, how much your bet is, the variance of the games you are playing and your own set of rules in gambling - how much you can afford to lose, when to stop and continue playing. The Variance of the game is calculated by the size of what you can potentially win as multiples of your bet. The higher the amount you won, the higher the variance of the game would be.


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