What is Volatility and How Does It Work?
When it comes to casino games, volatility (sometimes called variance) refers to the level of risk involved. It affects how often a game pays out and the size of the winnings. There are generally three types of volatility: low, medium, and high.
- Low Volatility: These games tend to pay out smaller wins but more frequently. This means your balance is less likely to swing wildly, and you’ll experience more regular wins, though they’ll be on the smaller side.
- High Volatility: High-volatility games, on the other hand, pay out less often, but when they do, the wins can be much bigger. These games are riskier, so you might experience longer stretches without a win, but when you hit a win, it’s often a larger amount.
- Medium Volatility: These games strike a balance between low and high volatility, offering a mix of frequent smaller wins and the occasional larger payout.
How Does Volatility Affect My Game?
Choosing a game with the right volatility depends on how you like to play. If you prefer regular wins and steady gameplay, you might enjoy low-volatility games, as they offer more consistent payouts, even if they’re smaller. If you’re more of a thrill-seeker and don’t mind taking bigger risks in the hopes of hitting a large win, high-volatility games could be more exciting for you.
A Great Example of Volatility: The Lottery
Imagine there are 1 million tickets sold for €1 each, and only one person wins the €1 million prize. The RTP (Return to Player) is still technically 100%, because all the money collected is returned in prizes, but the volatility is extremely high. Only one person wins a huge amount, while everyone else loses. This shows that even with a fair RTP, the risk (or volatility) is high because there’s a slim chance of winning, but the reward can be massive.
In contrast, a low-volatility game would pay out smaller prizes to more people, more often.
To Summarise
Understanding volatility can help you choose a game that matches your playing style and risk tolerance. Whether you prefer a steady flow of wins or the excitement of bigger payouts, knowing the volatility of a game can make your experience more enjoyable.