What is Return to Player?

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Jimmy D Friday, January 11, 2019

 

A question that is often asked within the online casino industry is how the house edge works. It is reasonably obvious, but we still need some clarification about exactly how the house edge gives the casinos an advantage over players in order t make a profit.

What is RTP?

It is represented in a percentage form and tells the player how much money they will win back by playing this machine. For example, if the game has an RTP of 98%, then the player can expect 980 ringgits in return for every 1,000-ringgit bet on the game.

What you have to understand is that this is not an exact science. In fact, it is very important to understand this is not an exact science

Variation Versus RTP

Now variation will always affect the RTP of a game. You will not roll a dice and expect the number 6 to appear exactly every 6th roll. You can go 10 or 20 rolls of the dice and the number 6 will not appear. The same applies to roulette.

On a European roulette table, the theory is that every 37 coups the ball will land on the ‘0’. This is because there are number 1 to 36 on the board and then the ‘0’ is the 37th number. Nonetheless, you can expect to go through over 100 spins and not see the ‘0’ land on occasions.

Variation will always affect every game of chance that you play. On top of this, you will need to take the velocity of the game you are playing into account.

High Velocity Versus Low Velocity Games

Low velocity games will pay out often but little amounts. The odds of winning are often very close to each other. For instance, Blackjack has an RTP of 99.5%. Now it may not seem like it, but it does. Blackjack only has a 99.5% RTP if the player is able to play what is called basic strategy. Try playing a game of blackjack and figure out how often you win if you are not using basic strategy to play.

Now Blackjack is considered a low velocity game because you will win quite often and lose quite often. The better you know basic strategy, then better chances there are of you reducing your losses. You can read more about this on our blog BLACKJACK ONLINE - REDUCE THE HOUSE EDGE.

Another low velocity game would be roulette’s outside bets. The odd/even, high/low, and red/black bets give you just a 53% chance of losing. That means you will win often and lose often.

On the other hand, if you play the straight bets on Roulette, then as mentioned with the ‘0’ above, you can go several spins without the ‘0’ coming in. It means that you will not be paid often. However, when you do hit the ‘0’, you will be given a 35 to 1 return on your bet, which is much higher than the bet amount.

When you take into consideration RTP on top of variance, and then add high or low velocity, a 98% RTP is not going to fluently give you back 980 ringgits for each 1,000-ringgit bet you make.

House Edge Versus RTP

This is actually quite easy to figure out. All you need to do is take the house edge percentage and subtract it from 100% to get the player RTP.

Going back to Blackjack, the house edge is 0.5%. Therefore, 100% minus 0.5% = 99.5% RTP.

Now you know exactly what RTP is and how it works. The most important point we have to make is you need to understand variance, probability, and velocity. On top of this people will employ strategies to counter variance in RTP. This includes bet sizing, which must be done wisely. Managing your bankroll according to your bet sizing, and let us not forget the many systems that people use to play roulette or blackjack, such as blackjack’s basic strategy system.