What do stock market investors and online slots players have in common? One thing is that they both must deal with a term called “volatility.” And yes, stock markets and online casinos can both make you millionaires!
In this guide, we will be focusing exclusively on volatility in relation to online slots. We will cover all the basics – what is volatility, why it matters to players, why it is important to casinos, how it is linked to other terms like RTP and variance, and much more.
Let us start with the most important question of all – why you need to know about slots volatility as an online casino player.
One of the most attractive things about online slots, besides the obvious pull of real money wins, is the total lack of a skill requirement. In other words, game-play is all based on luck or random chance. You cannot change the outcome with your actions.
Learning about volatility will not help you win more cash in a slot game. Then why bother? you might ask. The answer is related to risk, or rather, your appetite for risk. We all know that playing games of chance involve a significant element of risk – you could lose a lot of money.
You may not be able to affect the outcomes once inside a game, but you can certainly decide which game to play. Slots come in different forms. Some are high volatility, while others have low or medium volatility – and they all behave differently when it comes to hitting winning combos.
Your choice on volatility can make a world of difference between making bets worth a thousand dollars without seeing a single win and making frequent (but small wins) that keep you feeling happy and entertained as a beginner or casual player.
Once you become an experienced player, it can also help you zero in on high-risk slots that could win you tens of thousands of dollars (or even millions) with a lucky spin. To explain how this works, we need to learn more about volatility in the next sections.
As we already mentioned earlier, volatility is linked to the magnitude of risk involved in a particular online slot game. According to their risk level, slots are classified as high, medium, or low volatility.
The volatility rating will basically tell you two things about a slot:
These are all ballpark figures on what you should expect, not 100% exact numbers. Deviations can and will occur in slots, but usually, the outcomes will be in line with your expectations. The relationship between risk and volatility rating of a slot is direct – higher volatility means higher risk (and better rewards).
What is the risk in a slot game? Pure and simple, it is losing more bets than you win. The worst-case scenario would be not winning any bet during a particular gaming session. With high volatility slots, the chances of that happening are higher.
Let us now briefly examine the three different types of slots based on their volatility:
To be precise, casino operators do not set the volatility of each slot game. That part of the business is handled by the vendors. These include software developers like Netent, Betsoft, and Quickspin who design the slot and manage the complex mathematical algorithms that run these games.
The algorithms are called Random Number Generators or RNG. They are computer software designed to constantly spit out random outcomes, without any outside interference. Every time you spin an online casino slot, the outcome is based on the numbers cranked out by the RNG software.
The volatility of a slot is coded into a slot right from the beginning, along with house edge or Returns to Player (RTP) percentages. The addition of features like bonus rounds, free spins, wilds, and scatters can all affect the volatility of a slot. The vendors do all this, and then provide the game to online casinos.
Why go through all the hassle of creating slots with different volatility ratings? Why not just keep a single volatility rating and have slots with different themes and stories?
Variety is the spice of life – that is why! Imagine an ice cream shop, where you can order different colored ice creams, but they all have the same flavor – that would be boring. We all prefer different flavors, and the same way we all have varying appetites for risk. A casino’s aim is to cater to as many different categories of players as possible.
Low volatility slots are preferred by casual players, beginners, and people who hate losing and don’t mind small wins. High volatility slots attract aggressive players and thrill-seekers who don’t mind losing streaks as they chase a huge jackpot. And for all others in between, they have medium volatility slots.
These are three common terms you will see often if you check out online slots reviews or descriptions. In particular, there is a huge amount of overlap between Volatility and Variance – both these terms are often used interchangeably. This can inevitably lead to confusion if you are a beginner.
In the grand scheme of things, there is no difference between volatility and variance to players. They are both terms used commonly in the industry to describe the same thing – the frequency and size of winning payouts in a slot game.
But there are some finer points of difference between the two, purely from a technical or statistical perspective. Variance does not have any time limits – it is long term, while volatility is measured across shorter-term in finance and statistics.
But in slots and online gambling games in general, the vendors do not make any changes to the inner workings of the game during its lifetime. So the difference between volatility and variance has no meaning. If you see “high variance” written on a slot, just take it that the slot has high volatility.
RTP is usually the first thing you learn when you start playing online slots. Each individual game at an online casino has a fixed RTP, set by the software provider. This determines the average percentage of the money you can get back on the bets you make at that slot or table game.
Or in other words, RTP states the “house edge” – how much the casino stands to keep from the money you bet. If the RTP is 95, the house edge is 5%. RTP is theoretical – meaning variations can occur, especially if you have short gaming sessions. But in the long term, if you stick with a slot, your returns will be closer to the stated RTP.
Volatility is not linked directly to RTP. In fact, the volatility of a slot can affect your chances of getting the theoretical returns. Here is how it can play out in a single gaming session:
And in general, we find that high volatility slots tend to have lower RTPs, which improves the house edge. Conversely, RTP is usually on the higher side on low volatility slots. In medium volatility slots, things are balanced all around. It helps casinos manage the risk involved for their bottom line.
There is another crucial difference between RTP and Volatility at online casino slots. In compliance with fair play and transparency, RTP of a slot must be stated to the player. This does not apply to volatility – which is why you will not find it mentioned as often as RTP at an online casino.
This brings us to the next important section of our guide – identifying the volatility of a slot.
Most software providers do not reveal the volatility of their newly released slots to players. Pragmatic Play is a notable exception. Their slots often have a volatility meter displayed on the info screen, with a 5-point rating system. But in most online slots, this is not a standard feature.
But volatility is not something that can be kept hidden. Slot experts can quickly gauge the volatility of a new game simply by playing the game. The longer you play, the clearer this becomes based on the frequency and size of wins.
The easiest way to find volatility would be to check its online reviews. But you can also determine this on your own, by doing these things:
Most online slots have a table showing the max wins for each set of symbols. Obviously, four of a kind will have a better payout than a pair or treble. But look closely at the gap between the highest paying combo and the one below it. In high volatility slots, the difference could be in double-digit multipliers, 10x-20x or more. If it is a low or medium variance slot, the difference between each row would be 3x-5x or somewhere around that.
A jackpot is almost always part of a high volatility slot package. Medium to high variance slots tend to have higher maximum payouts, even if there is no fixed or progressive jackpot linked to the slot.
High rollers prefer playing slots with higher volatility ratings. And these are players willing to bet a lot of cash. Since wins are scarcer in these slots, the casinos can also earn more money with higher bet limits. So, a high max bet limit in the hundreds of dollars is often a sign of a high volatility slot. In contrast, low variance slots often have smaller bet limits aimed at more cautious players with lower budgets.
Many casinos offer “fun play” or “free play” on their slots. You can use these opportunities to test the volatility of a slot, without spending any money.
First, there is no such thing as good volatility or bad volatility. They are all aimed at different types of players. Your ideal volatility level depends on several factors, like your budget/bankroll, preference for risk level, how long you want your gaming session to last, and more. Ultimately, it all boils down to what you seek from your next online slot gaming experience.
That said, here is a quick points-based guide to select the ideal volatility level for any player:
You should pick Low Volatility slots if:
You should pick High Volatility slots if:
If you do not clearly identify with either category or have a mix of traits from both, then you should consider playing medium variance slots!