Understanding Slot Machines: the Impact of Variance and RTP Rate

Here's what to look out for when playing slots

Whether sticking a loose couple of quid from your pocket on a fruit machine down the local on a Friday night or logging onto a computer to play some online slots, many players won’t put too much thought into the slot they are playing.

They may have been drawn in by a specific theme that they can relate to, the simplicity of the options once making it from the reels to the bonus board or, most likely, the size of the jackpot.

However, as with most things, it does pay to put in a small amount of research before settling down to ensure you are playing a slot that suits your needs.

The three questions that slot players should ask themselves before they start is what the size of their budget for the evening is, whether their main priority is to be entertained or win money and finally whether they are chasing a life-changing sum of money or simply happy to turn over a small profit?

This is where a slot machine’s variance needs to be taken into consideration:

Low Variance Slots

Have you ever bought a scratchcard from The National Lottery?

Many find the process of scratching off the top layer of UV ink highly enjoyable, while they get an adrenaline rush from checking over all of the numbers or symbols to see if they have won.

With many scratchcards having between a 20% and 25% chance of a payout too, there is a reasonable chance of collecting some money too.

The issue for some is that a decent percentage of this payout structure is simply the return of the cost of the scratchcard.

If it costs £2 to buy a scratchcard and then you win £2, is that really winning? Although scratchcards are not the same as betting, there is a feeling that to be a winner, a profit has to be turned on the initial investment.

However, to others, the fact that they get to hand over a ‘winning’ scratchcard and get to put a few coins back in their pocket is enough to make the activity a success.

Low variance slot machines can be hugely similar.

A player may have 20 spins, win on over half of them and still barely have any more credit than they started with. They pay out often, but nothing of any real significance.

These are ideal slots for players hoping for a longer session at the reels and more entertainment.

High Variance Slots

It will come as no surprise to discover that high variance slot machines are the complete opposite.

Small and medium wins are possible, but it is the irregular bigger payouts that are chased. Fairly big bankrolls are required by players of these slots as numerous spins can pass without even the chance to make a nudge.

There is the obvious factor of risk that needs to be taken into account because of the lesser number of payouts that are likely to occur.

Return To Player Rate

In both forms of slot, but particularly the higher variance machines, it would be useful to pair variance with return to player rate.

Most casino games have a well-known house edge and this is no different with slot machines. If a machine has a 97% return to player rate, this effectively means that the house edge stands at 3%.

Playing a high variance machine with a low RTP rate is clearly the worst combination for guaranteeing a payout, especially if it can be determined that the machine in question has only just paid out a substantial sum.

The recommended move is to up sticks and move to a different slot, as the wait for another payout could be lengthy.

Striking the right balance between variance and RTP rate can be tricky business, but it is essential for a player to get what they desire from a slot experience.

The temptation is to select a slot with the highest RTP rate – one at 99% would be brilliant – but if it falls into the wrong variance category, then it could still prove the wrong choice.

Telling The Difference

The bad news is that whereas the RTP rate should be easy to uncover, finding the type of variance of the slot is not so straightforward.

One way is to have a few spins on the slot and see how much action is being granted. No action almost certainly means its high variance.

A second way is the jackpot size, if it is a relatively small sum, then it is probably low variance.

Finally, looking at the difference between the payouts for hitting four and five of a kind can be a telltale sign. If the difference between the two sums is minimal, it is low variance. If one is £2,000 and the other £50,000, the fair assumption is that it’s high variance.

Related post: Tips on selecting and playing online slots.