You’ve probably noticed that slots results aren’t very consistent. You might win hundreds of dollars in one session, then lose the same amount on less than an hour the next.
Slot machines offer wild results in comparison to, say, blackjack or baccarat. These games see you win almost half the time on a fairly consistent basis. Slots have both high volatility and high variance when compared to other casino games. But what exactly do these terms mean, and how do they apply to slot machines?
What Is Variance ?
Variance is a measure of the distribution of long-term results. Simply put, it measures how far results can vary from the statistical average. Variance shouldn’t be confused with standard deviation, a square root of variance that more closely measure the average distance of results. It instead measures how likely results are to change, rather than offering a hardline number like standard variation.
The weather is more likely to change in Michigan versus Hawaii. Therefore, Michigan’s weather has higher variance.
One more characteristic of this term is that it doesn’t get bound by any particular time, such as a week or a month. It considers the long-term likelihood of change.
What Is Volatility?
Volatility is very similar to variance in that it measure the distribution of results. However, they key difference is that it’s bound by a specific time. Measuring the difference in weekly car sales within a single month refers to volatility. Variance, on the other hand, doesn’t require that results be limited to one month.
Volatility is a good way to measure short-term changes in a set of statistics. It helps you figure out what kind of risk you’re taking in the short run.
How Do Variance and Volatility Factor Into Slots Results?
Slot machines have both high variance and volatility when compared to other casino games. They have a wide variation between prizes, which means that they don’t pay out as consistently as most games.
Here’s a simple pay table to explain:
- 3 Lamborghinis = 10,000 coins
- 3 Ferraris = 2,500 coins
- 3 Audis = 500 coins
- 3 Mercedes = 250 coins
- 3 Hyundais = 50 coins
- 3 minivans = 25 coins
- 3 rusty pick-up trucks = 5 coins
You can see that this pay table has big and small payouts. Given the fact that the game offers prizes worth 10,000 coins, it must make up for these wins by paying less frequently. Compare this to an even-money roulette bet, such as red/black. You get paid 1:1 on red/black and have a 48.65% chance of winning (on European wheel).
Volatility comes into play when considering that you never know how an individual slots session will go. You could win a massive six-figure prize, depending upon the game. You could also lose $1,000 in a couple of hours.
This unpredictability excites some gamblers. It’s a big reason why they continue spinning the reels and hoping to win big.
Variance factors in when considering that slot machines are also risky from a long-term perspective. While they’re programmed to offer a certain return to player (RTP), they still deliver widely varying results from player to player.
This high variance and volatility makes it difficult to manage your bankroll with slot machines. While you should still come up with a strategy, your bankroll management plan can still go off-track rather quickly.
High vs Low Slots Variance and Volatility
Some slots are designed with less variance, while others are extremely unpredictable. It pays to know how to spot high and low variance so that you can choose the type of slots that’s right for you.
Some games feature of a volatility rating within their pay table. Pragmatic Play slots, for example, show a rating ranging from 1 to 5 lightning bolts with 5 volts indicating the highest volatility.
Unfortunately, not all slot machines offer these helpful tools. You instead must look at various factors to predict what the variance and volatility will be.
Here are the key aspects that you want to focus on:
- Jackpot Size – A larger jackpot indicates high volatility/variance
- Number of bonus features – More bonuses allude to higher volatility/variance
- Number of small payouts – More small prizes indicate lower volatility/variance