What Is The Payout Ratio (RTP)?

What Is The Payout Ratio (RTP)? image

By design, all casino games are won by chance. Whether it is baccarat, blackjack, roulette or slot machines, players often play against the house. Each game you participate in has rules set according to the casino behind it. In the end, what a player wins is defined by the payout ratio or the amount returned to players (RTP).

What Is The Payout Ratio (RTP)?

By definition, the payout ratio (RTP) is the percentage indicating the chances of a player winning a casino game. Higher RTPs show that a player is highly likely to win quite a number of games. When the RTP is at 100 percent, the player is as likely to win as the casino is likely to retain the money. At an RTP above 100 percent, the casino lost money to the clients for the entire period the game was played.

Whether you are into online gambling or playing in a casino, it is a requirement that the casino provides the RTP at which you will be playing. Like any other mathematical ratio, RTP has a formula which you can use to calculate it.

Thus, RTP = {(Total Amount Returned to Players) / (Total Amount Bet By Players)}

  • Total Amount Bet by Players. This is calculated by taking the aggregate bets placed by all the players in each of the rounds of games they participate in. It has nothing to do with the money in but the money actually used in gambling.
  • Amount Returned to Player. The amount a player wins in a game round minus the amount bet. However, the definition varies from one game type to another. Players of table games are only paid the net win while those of video poker and slot games are forced to forfeit their bet with the option of receiving only the amount won.

By and large, this RTP formula is theoretical, given that the payout ratio on poker machines is mainly determined by the on-screen symbol positions.

What Is The Payout Ratio (RTP) For Online and Offline Games?

Offline casinos often serve only the clients who walk into their premises. As such, the number of these clients are usually less than those served by online casinos, which have a worldwide market. It is due to this that offline casinos tend to have lower RTPs compared to their online counterparts. Depending on the jurisdictions in which they operate, offline casinos tend to have RTPs that range between 80 and 90 percent. Online casino games have much higher RTPs.

However, the chances of a player winning a game are determined by much more than just the RTP. Also important is the variance of the possible winnings. The higher the variance offered in a game, the more likely a player shall win. In other words, while RTP determines the amount a player is likely to win, variance dictates the number of times he or she will win in a round of play.

That should settle the question: “what is the payout ratio (RTP)?” The next time you go gambling, you will have a good understanding of what’s happening to your money, won’t you?

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