by Lush Drive
05/11/18

Unless you’re a math geek, understanding slot machine math and “volatility indexes” can be pretty daunting. When designing a new game, software providers first need to figure out 3 essential pieces of information :

  • The payback percentage or “return to player (RTP)”;
  • The hold percentage;
  • The volatility index.

The payback is how much you, the player, theoretically keep of the money you play. As we will see, theory and practice are two different things.

Inversely, the hold percentage is the theoretical percentage that we, the casino, should retain to be able to pay our bills.

The volatility index (for example “22.5”) determines the size and frequency of the payouts, as we saw. The bigger the number, the more volatile the game is.

 

Doing the math

 

In reality, for an individual such as yourself experiencing a game, the payback percentage will rarely be exactly what’s disclosed by the game developers and shown on the site. Even if you played ten million spins on a slot machine with a theoretical RTP of 92%, it’s more likely you’d fall somewhere between 91.3% and 92.7%

To calculate the actual range of RTP, you need to consider the game’s volatility. Here’s what it looks like:

RTP +/- (volatility index / square root of # of games played on the slot)

So, if you play 1,000 spins on a slot with a theoretical payback (RTP) of 92% and a volatility index of 22.5, you can expect to keep between 20.85% of your money and 163.15%. The more games are played, the more this percentage stabilizes, which is how casinos can make some money, but at the individual level, the experience can vary quite a bit, which is what makes it so interesting!

 

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