Slot Volatility vs. Theoretical Payback Percentages

Most people who play slots for entertainment pick their favorite games on the basis of themes, bonus features, and jackpot size. And while these are all relevant factors to consider when playing for fun, aspects like theoretical return percentages and volatility should also be taken into account.

Unfortunately, some slot players leave them out of the equation. Others use the two terms interchangeably although they denote two separate concepts. However, both are of equal importance is you are looking to maximize the profits you generate when you spin the reels. The following article can help you make a distinction between the two.

Is Slot Volatility the Same as Slot Variance?

While in the company of keen slot players, you are likely to hear the term volatility a lot. But what does it mean? In the context of slots, and gambling in general, volatility denotes the level of risk inherent to a given game. It indicates the chances of a player ending their reel-spinning session with a busted bankroll.

Players often use the words “volatility” and “variance” interchangeably because both are a measurement of the distribution of the spins’ outcomes. There is, however, a difference between the two.

Volatility has more to do with the playing experience itself. It denotes how frequently a slot player wins and what amounts. It measures the changes in a set of outcomes over the short term. Slots fall into three main categories when grouped on the basis of volatility.

Low Volatility Slots
Medium Volatility Slots
High Volatility Slots

Low Volatility Slots

Slots with low volatility expose the player’s bankroll to a low level of risk. They award frequent but smaller payouts. Such games have high hit frequencies, which reduces the risk of bankroll depletion.

Low-volatility slots are suitable for players who do not insist on winning big jackpots and are looking to extend their playtime. Such gamblers normally play on a budget and would gladly settle for unimpressive but frequent payouts. This is not to say it is impossible to win big with low-volatility slots. It is, albeit on rare occasions.

Medium Volatility Slots

Slots with medium volatility have a medium level of risk and achieve a balance between hit frequency and prize size. Such games award average-size payouts and are choppy in the sense that winning and losing spins alternate at relatively equal intervals.

High Volatility Slots

Slots with high volatility are pretty much the opposite of those with low volatility. The player registers larger profits on winning spins but matching combinations occur with lesser frequency.

Such games are capable of delivering very large jackpots. Matching combinations occur less frequently to compensate for the slots’ big winning potential. High-volatility games are recommended for properly bankrolled gamblers who insist on having a chance to win a huge jackpot.


Unlike volatility, variance is not necessarily limited to a specific period, like a four-hour playing session, for example. Instead, it is a measurement of the distribution of spin outcomes over the long run. In other words, variance is indicative of how far the outcomes would stray from their expected statistical averages.

How to Spot Low-Volatility Games

Landbased casinos are not in the habit of revealing information about the volatility and hit frequency of their slots. This is not the case if one is playing online, though. Certain online gambling operators would readily share the volatility levels and the payout percentages of their reel-based games. Occasionally there are even filters that allow you to sift out the games based on volatility.

If this information is unavailable, however, the only way to get an idea about the volatility of a given slot is to play it for a while. Here are several more hints that could help you spot the games with low volatility:

Fixed Jackpots
Coin Denomination
Play With Demo Credits

Fixed Jackpots

Try slots with fixed jackpots instead of progressives. Slots that award a flat jackpot prize often have higher hit frequencies, which causes players to lose money at a slower rate. In contrast, progressives have jackpots that increase incrementally since a percentage of each bet goes toward the pools.

To compensate for this, such games often have a higher house edge and a lower hit frequency for the regular payouts. The rule of thumb is this – the smaller the fixed jackpot, the lower volatility is.

Coin Denomination

Play the machines with the largest coin denomination you can afford. As you will later see, such games have higher return percentages than low-denomination ones and award more frequent wins to justify the higher minimum stake.

Play With Demo Credits

Play online slots with demo credits. Many online casinos allow players to try their slots for free. This is a great opportunity for you to see how the land lies without exposing any of your money to risk. If you run out of credits, all you have to do is reload the game and you start with the same demo balance. You can go through as many spins as you like to see how a given slot feels, how often it pays, and how much.

Advantages and Disadvantages of Playing Low-Volatility Slots

Let's sum up volatility by listing the advantages and disadvantages of playing less riskier slots. Of course, the biggest positive such games can offer is that they deliver a steady flow of payouts although they also have several downsides as you will see below.

Low-Volatility Slots - The Advantages
Low-Volatility Slots – The Disadvantages

You will win more often

The payouts are frequent but smaller

You can play on a budget with a smaller bankroll

Low-volatility slots usually have fewer bonus games and special features

There will be no long dry spells to frustrate you

The jackpots are normally smaller

Frequent, yet small wins will extend your playing session

You will often win less than you have staked

Level results are more in line with your expected statistical averages

The excitement of potentially winning life-changing prizes is absent

Payback Percentages in Slot Games

The term payback percentage, or return to player (RTP), denotes what percentage of all money wagered on a given slot is paid back to players over the long run. We can view the payback percentage as the flip side of the house edge.

Slot Payback Percentages Explained
Payback Percentages and Expected Value in Slots
Payback Percentages and the Two Laws
Coin Denominations and Advertised Payback Percentages
How Volatility and Payback Percentages Interact

Slot Payback Percentages Explained

In fact, the cumulative total of a slot’s RTP and its house advantage is inevitably equal to 100%. When you play a slot with a theoretical return of 94.7%, for example, this means you are up against a casino advantage of 5.3%.

The return percentage shows you what amount of each bet you can expect to get back over the long haul while the house edge is the portion of each wager that the house retains. Both figures are meant to represent expected averages in the long term.

Whether or not payback percentages are posted on the machines depends on the legalities in a given jurisdiction. Casinos that operate in the United States are not legally bound to post RTP information on their machines. In turn, this makes it impossible for patrons to calculate exactly what house edge they are fighting.

To perform these calculations, one needs two pieces of information – the probabilities of winning and the payouts for winning symbol combinations. The payouts are readily available in the slots’ paytables but the same cannot be said about the probabilities of the winning outcomes.

Further complications arise from the fact the Random Number Generators of identical machines can be programmed differently within the same casino. Here is a hypothetical example. A player can be sitting at IGT’s Kitty Glitter machine in the Peppermill Casino in Reno while their friend is playing an identical slot a couple of meters away.

The theoretical return of the second machine could be 94% while that of the first one might only be 91%. The two machines would share the same paytable, which makes it impossible for the players to spot the difference.

This discrepancy results from the way the reels of the identical slots are weighted. The top-paying symbol with the Persian cat might appear 1/8 of the time on one machine but only 1/16 of the time on another. Such differences will have a pronounced effect on the slots’ theoretical return percentages.

This is not the case in the United Kingdom where both online and landbased gambling operators are required by law to display the theoretical return of their slots. Players can easily figure out the house edge by subtracting the payout percentage from 100%.

Payback Percentages and Expected Value in Slots

The average payback percentage represents the overall expected value (EV) of all possible symbol combinations on a given slot. Let’s clarify what we mean with a simple example. We presume you play a slot where you have a total of 100,000 possible symbol combinations.

If each combo appeared in order, from 1 to 100,000, you would pocket 95,000 credits of your chosen denomination. This means the theoretical return for your slot would be 95%, with a house edge of 5%.

You can use this information to arrive at the long-term expected value this slot would give you per hour. All you have to do is multiply the average number of wagers you place per hour by your average bet size and the house edge.

The result of these multiplications is your long-term expected loss per hour. You cannot expect to register any net profits over the long haul when you play negative-expectation games like the slots.

Most reel spinners play roughly 600 rounds per hour. We assume you play more conservatively and bet as little as $0.10 per spin. Therefore, the -EV in the hypothetical game from the above example equals 600 x 0.10 x (-0.05) = -3.

It follows you will lose $3 per hour on average on one such slot. If you start the session with $100, you will have $97 toward the end of the hour, i.e. if we assume you saw statistically predicted outcomes. But not everything is gloom and doom when it comes to slots. It is still possible to win in this game as you shall see in the next section.

Payback Percentages and the Two Laws

Most people would argue playing casino games is all about fun and entertainment. We would argue gambling games are all about mathematics, and slots are not an exception. Everything is calculated with great precision. The structure and the payouts of each casino game are such so that it inevitably generates profits for the house and leads to losses for the players.

Two laws are applicable in the context of gambling. The Law of Large Numbers stipulates each slot would arrive at its theoretical payback percentage over the long term. After thousands and thousands of spins, the game would pay a specific amount back to players and the casino would keep the rest in net profits.

Bear in mind the payback percentages are cumulative, i.e. they are shared between all players wagering on a given machine. The RTP does not apply to you and you only. It is physically and financially impossible to play the number of rounds needed for the odds to even out.

However, it is the Law of Small Numbers that applies in the “real” world where you can observe some serious imbalances when gambling. It is possible to hit it big on a machine in the short term, winning hundreds, even thousands of dollars in under an hour. At other times, you will deplete your entire bankroll in less than thirty minutes.

Whether you like it or not, the Law of Large Numbers ensures random games arrive at their statistically expected distribution of results if you spin the reels long enough. This is why gambling establishments remain in operation. Patrons win in the short term which motivates them to keep coming back to the casino floor. The math of the games makes sure the house nets some guaranteed profits in the long run.

Coin Denominations and Advertised Payback Percentages

Some specialized gambling sites such as the American Casino Guide list the cumulative theoretical return percentages for machines with specific coin denominations in specific US gambling establishments.

The data is originally supplied by local regulators like the Nevada Gaming Control Board and the New Jersey Casino Control Commission. Here is an example showing you the average payback percentages of slot machines in Laughlin and Reno, Nevada. The results apply to the fiscal year starting in July 2017 and ending in June 2018.

Slot RTP in Reno Casinos Slot RTP in Laughlin Casinos
Coin Denomination Return Percentage Coin Denomination Return Percentage
Penny Machines 92.78% Penny Machines 89.24%
Nickel Machines 94.00% Nickel Machines 92.86%
Quarter Machines 92.43% Quarter Machines 93.83%
Dollar Machines 95.60% Dollar Machines 94.30%
Fiver Machines 95.49% Fiver Machines 94.57%
Cumulative RTP 94.62% Cumulative RTP 92.21%

It is not difficult to see the tendency here. The average payback percentage tends to grow proportionately to the increase in the minimum coin denomination the slot machines accept. The higher the minimum denomination, the higher the RTP.

It is essential to repeat that these figures are meant to represent the averages for entire groups of slots with a certain denomination. They are not representative of a specific machine and have little bearing on any particular game you play.

If a gambling operator reports a theoretical return of 93% for its quarter machines, this does not mean all slots with this denomination return payoffs at this rate. Half of the slots could pay back an average of 89% while the other half might have a return of 97%. The gist is the average player cannot differentiate between the two types of machines because the hit frequency may be equal from one slot to another.

Landbased casinos often use cumulative return percentages to advertise their slot machines and attract the attention of prospective customers. For example, a given establishment might display a promotional sign that states “Payback of up to 97% on slots”.

This is a bit deceptive but it does the trick when it comes to enticing customers to enter the venue and spin the reels. The listed percentage is accurate for some of the machines in operation, meaning that certain slots indeed deliver the stated payback.

The trouble is players have no way of knowing which ones. A person might sit at an 89% slot machine with the assumption they are playing a slot with a 97% return. We advise you to wise up and ignore such advertisements. You can get a rough idea of what to expect from a slot RTP-wise by checking what minimum coin denomination it uses.

How Volatility and Payback Percentages Interact

In the final section of our article on slot volatility and RTP, we tackle the question of how payback percentages and volatility interact with each other. We hinted earlier in our quarter-slot example two games might have the same volatility but different payback percentages. Can the opposite be true as well?

To answer this question, we must first show you how volatility and return percentages interact. For the purpose, we shall consider an example where we have two identical hypothetical games we refer to as “Slot 1” and “Slot 2”.

As you remember, volatility denotes risk and the proportion of rounds that result in winning combinations. The return percentage, on the other hand, denotes what amount of all money wagered on the machine is returned to players as profits.

Let’s suppose Slot 1 has a payback percentage of 89% and lower volatility while Slot 2 has a payback of 94% and higher volatility. The paytables of the two games are identical, making it impossible for the player to determine the volatility and the average return.

Assuming a software developer wants to design a game with the low volatility of Slot 1 and the higher payback percentage of Slot 2, they would have to introduce some changes to the paytable.

They would increase the payouts for certain high-value combinations in Slot 1 and reduce them for Slot 2. This would result in Slot 2 having a higher hit frequency while Slot 1 will have a higher payback percentage. What this tells us is that a slot with a higher hit frequency can pay less than one with lower hit frequency. Here we would like to remind you that:

  • High volatility means lower hit frequency and better payouts
  • Low volatility is the opposite, i.e. it means higher hit frequency with lower payouts

Some players would assume a slot with better payouts and a higher RTP is the better payer. Is this so? The short answer is no. Paytables are sometimes misleading because an increase in the payouts often comes at the expense of the reduction in hit frequencies.

The bottom line is a game that pays lower amounts frequently has low volatility and would extend the duration of your betting session. One with higher but less frequent payouts has high volatility, which could burn through your bankroll faster. Your choice of slots should be based on what kind of playing experience you are looking for as well as on the size of your bankroll.

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