What are RTP and volatility in online casinos?

When playing popular online casino games like slots, blackjack, and roulette, you’ll come across two important terms – RTP and volatility. Understanding what these key metrics mean and how they impact gameplay is essential for any casino gambler. RTP and volatility influence everything from the house edge to hit frequency, variance and overall winning potential.

RTP stands for “return to player” and represents the theoretical payout percentage for an online casino game over time. Expressed as a percentage, RTP tells you how much of all wagered money is paid back to players in winnings on average. For example, if a slot has an RTP of 95%, it will theoretically pay out $95 for every $100 gambled on it. The remaining $5 is kept by the casino as gross profit.

Typical RTP ranges

RTP percentages can vary substantially across different casino game genres and even specific titles.

• Slots – 85-99% RTP
• Blackjack – 99-99.5%
• Roulette – 94-97%
• Video Poker – 96-99%
• Craps – 98-99%
• Baccarat – 98-99%

So, a slot at 85% RTP will have a much higher house edge than blackjack at 99.5% RTP. Of course, RTP is a long-term average – anything happens in the short run. But, the RTP gives you a sense of your expected return.

How do casinos calculate RTP?

To determine a game’s RTP, real money online casinos simulate billions of rounds of play to model statistical outcomes. The percentage of total bets retained by the house equals gross profit. Anything returned to players gets factored into RTP. For skill-based games like blackjack, casinos assume perfect optimal player strategy. RTP accounts for all potential outcomes weighted by probability over an infinite number of rounds.

RTP percentages provide insight into the profitability of a game over extended play. That means more of your money is paid back over time on average. Online casinos must publish RTPs to show games are fair. Players use RTPs to identify lucrative games compared to ones that heavily favor the house. Just be wary of putting too much stock in RTPs short-term, as variance means anything can happen. But, RTP is a useful metric for advantage players over time.

Understanding volatility

Also known as variance, volatility in online casino games refers to how much the actual payouts differ from the statistical average RTP in the short run. Low volatility games have smaller swings around the mean RTP – results are more consistent spin-to-spin. High-volatility games fluctuate more wildly in the short run but offer bigger payout potential. Managing volatility helps your bankroll last longer.

Low vs High Volatility

1. Low – Smaller but more frequent payouts, smaller max wins, lower risk.
2. High – Larger but less frequent payouts, bigger max wins, higher risk.

Examples:

• Low volatility game – 98% RTP, max payout 250X bet
• High volatility – 96% RTP, max payout 10,000X bet

While the RTP is lower on the high volatility game, it provides more upside via larger potential payouts. The key is understanding volatility suits different budgets and preferences.