Gambling Concepts – Variance and Volatility

Gambling Concepts – Variance and Volatility

Two terms that you’ll see referred to often in regard to online pokies is variance and volatility. These terms are talking about the fluctuations that you’ll experience in your bankroll when playing real money online pokies at online casinos. It is important that you understand the concept of variance as it will help you become a smarter pokies player. Today, you’ll learn all about variance and volatility and how to pick pokies based on this knowledge.

What is Variance

Variance, also known as volatility, is the range of risk that you’ll experience when playing a pokie game. Others will refer to it as your risk of ruin. It refers to how swingy that a game will be, both in profits and losses. With variance, you will get an idea of how extreme your losses or wins can be when playing a game.

Variance is not be confused with Return to Player (RTP). The RTP of a pokie will tell you how much that a game will payout over time. A game that has an RTP of 96% will pay 96% of all money played. However, the variance of the machine will tell you whether this money will be paid out in small chunks, evenly, or if you will have a wild time in both directions.

Low Volatility Pokies

First, let’s take a look at low volatility pokies. When you are dealing with low volatility pokie games, you’re playing a game that will have a lot of smaller wins along with short periods of losses. If you were to make a chat of this game, there would be very little movement in either direction.

Low variance pokies are best suited for small-stakes players or those that are not willing to lose a lot of money at any one time. The downside to these games is that you will not generally experience many big wins. You may have to play for quite a while to win big on these games, if at all.

Medium Variance Pokies

Medium volatility pokie games are the sweet spot for pokies. These games give you a mix of wins and losses. You’ll get a nice mix of smaller wins with the occasional big win. You’ll experience more losing sessions with these games, but not enough to crush your bankroll. However, you give yourself a good chance of catching some nice wins.

The best comparison would be to compare medium variance pokies to popular stocks. Stocks from stable companies have periods of gains and losses and can make people some money at the right times. The risk is usually worth the reward.

High Volatility Pokies

High variance pokies are games where you’re going to have your greatest risk of ruin. These games have wild swings that can result in you losing large sums. There are very few small payouts. However, you have the best chance of catching a big win.

Progressive jackpot pokies are almost always high variance pokies. High volatility games are best suited for those with larger bankrolls or those that have the “go big or go home” mentality.

In-Between Categories

You’ll see some pokies that are listed with volatilities such as Low-Medium or Medium-High. Most of the time that you’ll see this, it is from review sites that are trying to get you to play a game. They use these categories to try and convince you that the game is lower volatility than it really is.

If you see anyone claiming that a game is Low-Medium in variance, assume it is Medium. If the game is listed at Medium-High, you can safely assume that it is High variance.

Using Volatility to Pick Pokies

Now that you know the concept of volatility, you can make smarter choices of which games to pick. If you have a smaller bankroll or don’t like a lot of fluctuation in your play, you should stick to low variance. If you don’t mind a little more risk in exchange for a better chance of winning big, then medium volatility games are more your speed.

Those of you that like to chase jackpots or big wins should consider high volatility games. Granted, there will be many times where you will lose your entire buy-in. However, you have just as much of a chance of cashing out big as well.

Always consider volatility when picking pokies. If you’re a low roller, a pokie with a 95% RTP and low variance will be a better option over a 97% RTP and high variance. By picking casino games based on variance, you can control some of the swings inherent with playing online pokies.

Henry Walker

Henry Walker

Joining Australia Internet Pokies in 2017, Henry provides insights into the world of casinos and dives deep into each online casino to provide reliable reviews you can trust. Henry is a veteran of the gambling industry, having worked for both land-based and online casinos over the past 20 years. Originally from New York, USA, Henry has an in-depth knowledge that few can equal when it comes to casinos. A graduate of Columbia University in Mathematics, Henry headed west to the bright lights of Las Vegas to put some theories to the test. It wasn’t long before Henry was snapped up first as a croupier, then as a consultant to some of the top LV casinos. When the big move to online gambling happened Henry moved with it, and to Australia with his wife. He has spent the last 5 years focusing solely on online casinos. In his spare time, Henry likes nothing more than a good thriller and long hikes.

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