High Return To Player (RTP) Slots and Casino Games

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The Three Most Common Misconceptions About Return To Player

What does Return To Player mean? This term is used to describe the expected value of winnings percentage over time while playing slot machines or casino games. For example, if you play a slot with 95% RTP and make a hundred of $1 bets, you will on average get $95 back in winnings. The rest 5% is house advantage (HA). RTP is calculated over a long period of time with many trials, so don’t expect your winnings to be exactly as announced if you play a high volatility game for a short period. “High volatility” means you can win a lot or lose a lot over a short period of time, while RTP is an estimate of overall hit frequency for any specific slot or casino game.

Online casinos are not charities, so no one expects them to consistently pay out more than people put in. A casino needs money to maintain their website, to buy or develop new games, to pay their employees, and, of course, to be profitable for their owners. All of these costs should be paid from only a fraction of player deposits. However, it is in your best interest as a player to find a casino where this fraction is smaller, not larger.

In order to help you reach this goal and to understand the notion RTP a bit better, the most common misconceptions about RTP are discussed below.

Misconception #1 - Looking at a casino's average or overall payout rate

"I registered with Casino X, which boasts a 99% payout rate on their home page. After playing for a while, I feel that the actual payout is much lower."

The "average payout" that a casino boasts on their home page has very little practical meaning beyond its function as a boast on the home page. The reason for that is because that number is clearly stated as an “average.”

Consider a hospital that decided to publish the average body temperature for all their patients on a given day. For some patients, the temperature would be normal, others have a high fever, and a few others have passed away, which means that their body temperature equals room temperature. Let's suppose that all of the temperatures average out to 37.5 C (99.5 F), which is slightly above normal. Does this number have much meaning to each individual patient or his relatives? Probably not.

Similarly, in Casino X, the average payout of 99% is measured across all players in all games. Perhaps you did not play all the games that they offered, so the number you should be looking for is the payout of the specific game you chose to play, which may equal 99.5%, 97%, or 90%. This number is also called RTP. It can often be found on the respective game's help page; some casinos also list the RTPs of all their games on a special page of their website, so it may take some searching to find it. Additionally, RTPs of most table and card games can be calculated mathematically, based on the game structure and basic rules of probability.

This information is sometimes expressed in terms of House Advantage (HA), which equals 100% - RTP. For example, European Roulette has an RTP of 97.3% and a HA of 2.7%. KeyToCasino.com provides the HA of most games and allows users to search and filter games by this parameter. That way, players can easily find a game in their desired category with a lower HA.

Misconception #2 - Confusing ‘RTP’ and the ‘Withdrawals to Deposits’ ratio

"I found a game with a 4% HA (96% RTP) and played it. Over the course of the month, I deposited $5250 and only cashed out $3150, so my actual RTP was far lower than 96%."

Yes, you have cashed out only 60% of your deposits, but this number is not RTP - it is the withdrawals to deposits ratio. This ratio would only equal RTP if you always bet your entire deposit at once and immediately withdrew any winnings. This is hardly the case for the vast majority of players, as they typically make smaller bets and continue playing with their winnings, or the remainder of their deposit.

In this case, you need to factor in the total amount wagered, which is the simple sum of all the bets you have made, regardless of the outcome. Suppose that you deposited $100 and played European Roulette, betting $2 every time. After making 50 such bets, i.e. wagering your deposit, you have a balance of 120. Then, you make 60 more bets, and your balance has now gone down to 90, which means that you can make 45 more bets. By the end of the day, if you have made a total of 800 bets, then your total wager is 1600. That is the number you need to multiply by the HA.

$100 - $1600*2.7% = $56.75. Therefore, your ending balance in the vicinity of 60% of the initial deposit is perfectly normal, and is not an indication of a problem with the game's RTP.

In most casinos, the total amount wagered can be tracked based on the number of comp points (loyalty points) that you accrue. Also, casinos typically keep track of their player's wagers, so a player can ask a chat rep to provide him with the total amount that he or she has wagered over a specific period. 

Misconception #3 - Disregarding the idea of the ‘long run’

"Okay, I've listened to everything you said. I found a game with a 97% RTP, I wagered $5000 on it so I expected to lose $150. But actually, I have lost $500. Then, I played another game that lists a 96% RTP and wagered $4000. Instead of losing the $160, I actually won $1,000. Is something wrong with those games? Or is RTP just completely useless?

The answer is "No" to both of your questions. Nothing is wrong with those games and RTP is very useful. However, keep in mind that RTP represents the theoretical average return over an infinite number of rounds. As you play more, you are expected to get closer to that number, but in this case, "more" means "a lot." Depending on the specific slot's variance, it may take hundreds of thousands or even millions of spins to reach the nominal RTP within, for instance, 1 percentage point.

For the sake of explanation, I will compare two very known old slots from Net Entertainment: Elements the Awakening (96% RTP or 4% HA) and Jack Hammer (97% RTP or 3% HA). I will bet 4 cents per line on the former and 5 cents per line on the latter, so the total bet is $1.00 per spin in both instances. The graph below shows the average return on these two slots for 1,000,000 simulated spins.

As you can clearly see from the graph, average return is very unstable in the beginning; Elements the Awakening even demonstrated a positive return during the first several thousand spins. The graphs are bumpy, they approach one another, and even intersect occasionally. It is only after about half a million spins that the returns get closer to their respective theoretical HA.

This is what gambling is all about. Over a very long period, you are expected to pay a toll (call it a participation fee) just as with any other form of entertainment. The toll equals a certain percentage of the amount wagered; this percentage is called HA. However, in a short period of time, your results are far less predictable. On any given day, week, or even month, you might enjoy a big overall win.

The best thing to do is set a limit for yourself and play responsibly. Also, make sure you choose a game with a high RTP (low HA) to decrease your “participation fee.” Good luck!