Terms return-to-player value, volatility, variance, and hit frequency explained

As is well known, casino games are based on mathematics and chance. Yes, they look magical, but actually it’s the math. Whether you try your luck at online casinos, you will always find games that all work the same way from a mathematical point of view. They work with RNG’s (Random Number Generators), called random number generators in German.

They are the online pre-programmed mechanisms that generate random numbers in real time. And these numbers are transformed online into symbols on slots or eye numbers. But they are purely random and you have no influence on them. The mathematical metrics that describe how online casino games work are RTP, volatility, and hat frequency. And we will explain them in this blog post.

RTP (Return to Player)

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This metric shows what percentage of deposits the game returns to players. For example, the RTP value of 95% means that on average 95% of the player’s deposits go back to the player in the form of winnings. So it’s not 100% because the casino always has the house edge. This makes RTP the exact opposite of the house edge. To calculate the house edge of the game, you have to subtract the RTP percentage from 100%

Every game has an RTP number, but most often this number is used in relation to slots because the given payout in slots is easier to program. In games like poker, the player can use clever strategies to influence the outcome, and in slot machines, not at all. The real RTP in poker can depend significantly on the given RTP. RTP value is set by developers who developed the casino game.

You calculate this value for 10,000 games, so it’s about the money that the game pays out in the long term, over time. You don’t have to expect it from the only game. On the casino games market you can find games with RTP values of 70-99%. Slot machines in casinos have the lowest RTP values. Slots in online casinos usually have RTP values between 92% and 99%. The higher the RTP, the higher the winnings.

Volatility

Volatility is the term from financial mathematics that is now also used in relation to casino games. In contrast to the RTP, this factor says nothing about the amount of winnings (that’s what the RTP does!), but shows how often the particular casino game pays out winnings. For example, some slot machines pay out less often but have high jackpots.

Others, on the other hand, pay out frequently, but they are small contributions. The first slot machines have high volatility, and the second ones have low or medium volatility. Slots with high volatility have lower probability of winning and are associated with higher risk. Low volatility slots don’t make players rich, but are suitable for players who want to protect themselves. There are also slot machines with medium volatility.

Variance

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We have already written that the volatility indicator is calculated based on several thousand or even millions of spins. Therefore, you don’t have to expect to win 95 euros within an hour on a slot with 95% RTP. The real value that describes the payout and probability of winning the slot is called the variance.

Hit frequency

Hit frequency shows how often you win a game. This is due to volatility. Hit frequency of the slot of 30% indicates that on average you can win after every third spin.

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