What is RTP or House Edge in Online Slots?

If you’re a regular player at the online slots games, then you must’ve noticed that next to most games, there’s something that says ‘RTP’ or ‘House Edge.’ Expert players may know what the RTP or House Edge is. But, if you’re relatively new to the online slots world, let us make you familiar with the terms.

There is no doubt that the online casino world is a land of non-stop thrills. However, entertainment is not the primary reason why we keep going back to them, right? It is also the chance of getting rewards and real cash that pushes us to play more and more online casino games. 

So, sit back and relax while we go on to explain some basics of casino games – online slots house edge and slots RTP.

What is House Edge or RTP in Online Slots?

Whether it is slots, roulette, blackjack, or poker, choosing the right online casino games is no child’s play. For instance, when a player takes a shot at slot machine games, they consider many factors. The reel numbers, themes, and bonus points are generally what interests the player. Besides these, one of the most vital facets of slots and most other casino games is the slots Return to Player Ratio or, in short, the RTP. In slots, RTP indicates how much a slot machine has paid out over time compared to the total bet money players have wagered. 

In contrast, there is something known as the House Edge. As the name implies, House Edge is the mathematical advantage that the house or the casino has. To illustrate, House Edge denotes the percentage of a player’s profits that the house gets back. It is the House Edge that serves as leverage to the casinos to welcome gains. 

Say, for instance, that a game of roulette has a House Edge of 5%. It means that the RTP stands at 95%. Thus, for every 1 Indian Rupee you bet, the casino holds 5 paise as a profit margin and returns the rest 95 paise to you as winnings.

The RTP and the House Edge should usually sum to 100%. Nonetheless, there is a wide variety of online casino games with varying House Edges and RTP ratings. However, they are quite easy to understand if you grasp the underlying mathematics. 

So, let’s take a closer look at the working of RTP and how to calculate online slots games RTP.

What is RTP, and How it Works?

Like we said before, RTP or Return to Player is a measure of the percentage of wagers players can expect from a slot machine in the long run. The RTP is usually expressed as a percentage or ratio. In fact, RTP is the way to know how much of the betting money goes back to the players over time. Hence, it is also a method to assess if you’re at a profitable game. The higher the RTP percentage of a game, the better chances you have at winning. Consequently, more profitable is the game.

RTP is simply a statistical concept. It is a mere theoretical calculation and is not the be-all-and-end-all. Hence, it doesn’t work in cases of long losing streaks or huge random wins. RTP is all about an average estimate. Let’s say that the House Edge for a specific slots game is 10%. Theoretically, the slots RTP percentage will be 90% (100-10%). 

But, what if the RTP was 100%? That would mean that you have equal chances of winning the slots game as the house. In contrast, if the RTP is more than 100%, it means that the casino has a loss for that specific slot game for some time. Hence, the more the RTP, the better is the payout. However, it is not always true due to a feature known as the variance. We’ll talk more about variance in the later sections.

How to Calculate the RTP in Online Slots?

Do you want to calculate how much you stand to earn from all the wagered amount over a period? You can use the following formula:

RTP = (Total winning amount returned to the players)/(Total amount wagered by the players)

Say you bet INR 1000 in total throughout a playing session. Out of that, your winnings summed up to INR 500. Hence, the RTP for this session would be 50% (500/1000). But if you had won a total of INR 600, your RTP would be 60%. 

The formula given above is ideal for finding RTPs of single playing sessions. The average RTP of slots is calculated in view of different factors, including the countless spins by millions of players. RTP is a figure that is programmed into the slot. Thus, the RTP values like 95% or 97% result from complex math by taking into account a sizable quota of spins.

Another thing that we would like to talk about is high-frequency slot games. Specifically, a high-frequency slot machine gives winning combinations very frequently. Hence, with a high-frequency slot machine, you will likely earn a winning combination every four or maybe five spins. However, over time, the losing combinations will far exceed the winning ones. So, the player doesn’t really “win often.” In contrast, if the slot machine is a low-frequency one, it may take ten or more spins to obtain a winning combination. 

Variance and RTP

If you’re an online slots player, you’ve likely come across slot’s variance. Variance (also called volatility) is an indication of the risk factor linked to a slot machine game. Accordingly, slot games can be high, medium, or low risk. A high variance slot poses more risk of you losing a bet than a low variance slot. However, a higher risk entails a greater reward. 

But, how does variance relate to RTP? Let’s see.

Variance helps you decide how long your bankroll is likely to last during your online gaming. For instance, a low-variance slot game with an RTP of 95% will payout in small, regular wins. Such slots will refill your bankroll as well as realize the RTP slowly. In contrast, high-variance slot games will offer more highs and lows. With the same 95% RTP, you may not win for a good number of early spins. But, you could win way more than your initial bet, say, at the 100th spin. So, high-variance slots can fetch a hefty win if you have the bankroll to see it through.

Conclusion

One of the main reasons why casinos have many slot games is that slots offer low RTPs. Hence, the casino makes huge profits. Moreover, there’s the concept of slots RNG games. Online slot machines use RNG or Random Number Generator to ensure random outcomes of games. In fact, RNG is the basis of web-based slot games. It guarantees that every spin result is random so that past game outcomes can’t dictate future spins. However, it can’t be used to foresee the payout frequency. In conclusion, it is the RNG that decides if you carry the day and not the RTP. The latter just gives a rough guess of how much you can win after playing a slot game for a significant time.

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