Can You Work Out Slot Volatility Yourself

Understanding slot volatility is essential if one wishes to evaluate the level of risk inherent to playing different online slots. Knowing how volatile a given slot release is can help you determine whether it is suitable for your budget and playing style.

As this information is not readily available at all online casinos, rookie spinners sometimes have no other option but to try and second-guess the risk involved in their slots of interest. Many players rely solely on intuition so their assessment is anything but accurate.

The good news is there are more reliable factors in determining slot volatility than following your gut feeling. Jackpot size, payout distribution, maximum bets, and the number of special features can be all used as indicators of a slot’s approximate volatility.

Keep on reading as we tackle these factors in further detail along with their impact on the winning chances of reel spinners.

Many gamblers use the terms standard deviation, variance, and volatility interchangeably when referring to the risk level involved in playing different slots. So let’s first have a look at what standard deviation is to see whether the term’s meaning overlaps with that of variance and volatility.

Standard Deviation

Determining Means and Standard Deviation

The Concept of Variance

The Concept of Volatility

Standard Deviation

All casino games, slots included, have house edges that determine how much money players will receive on average over the long haul.

The house edges of online slots commonly fall within the 2% to 10% range, with most games delivering an average return to player ranging from 90% to 98%.

For example, spinning the reels of a slot with a 2.93% house edge means the player will get back $97.07 of every $100 wagered on average.

Conversely, playing a game that yields a higher house edge of 4.03% means the player will receive only $95.97 of every $100 wagered on average.

Of course, this is not to say he or she will get back precisely $95.97 and $97.07 from these two slots at the end of each round. The player will lose more than $100 at times, break even at others, or win more than this amount if they trigger a lucrative bonus feature.

The exact winnings or losses at the end of each spin normally differ from the expected theoretical return of the game but the results will eventually average out in the long term. This is where standard deviation comes into play.

Standard deviation is an estimate of how frequently and by how much the values of individual numbers from a given number set will deviate from the simple average (mean) of the entire set.

Some individual values will exceed the simple average, some will be lower, and others will coincide with the average. The bottom line is individual values typically differ from the average of the full set and standard deviation measures this precise difference.

Determining Means and Standard Deviation

One must first work out the mean of the entire set before one can determine its standard deviation. There are two ways to compute means and both are fairly simple if you have a rudimentary knowledge of math. We shall use a simple set of four values (2, 6, 4, 8) for demonstration.

1Example 1. Calculating Arithmetic Means

(2 + 6 + 4 + 8) / 4 = 20 / 4 = 5

As you can see, this set of numbers has an arithmetic mean of 5. Another way to calculate this is to take the square root of the average of the sum total of their squares.

2Example 2. Calculating Root Mean Square (RMS)

√((22 + 62 + 42 +82) / 4) = √(120 / 4) = √30 = 5.47

This method of figuring out the average of a set of values is known as calculating the root mean square (RMS). It is typically implemented for computing standard deviation as well. You will undoubtedly notice the RMS is higher than the arithmetic mean.

3Example 3. Calculating Standard Deviation (SD)

We have already determined the arithmetic mean and the root mean square of the above number set (2, 6, 4, 8). To compute the standard deviation of the set, we must also figure out the distance of each individual number from the set’s arithmetic mean (5).

We do this by subtracting the arithmetic mean from each number and we arrive at the following distance values: -3, 1, -1, and 3.

The next step is to square each distance, which gives us the following values: 9, 1, 1, 9.

Then we have to work out the arithmetic mean of the squares above like this: (9 + 1 + 1 + 9) / 4 = 20 / 4 = 5

Finally, we must take the square root of the result from the previous step and we arrive at a standard deviation of √5 = 2.24 (2.236067 to be precise).

So the standard deviation of this number set (2, 6, 4, 8) is 2.24. When applied to gambling games like slots, the SD reflects the average differences between the results of individual spins and the game’s overall theoretical return. It shows us how far away the returns from individual rounds are from the slots’ advertised return percentages.

The Concept of Variance

Variance is another broadly used term in the gambling circles and denotes the square of a given game’s standard deviation, i.e. Va = SD2. Conversely, you can compute the SD by taking the square root of the variance. Both variance and standard deviation are basically measurements of the same thing.

Gamblers, casino operators, software providers, and gambling authors commonly prefer to use the term variance for brevity and simplicity. It is easier to say a slot has ‘low variance’ than to use the expression ‘low standard deviation’.

The Concept of Volatility

Many people use the term volatility interchangeably to denote either variance or standard deviation, depending on the specific context. In the context of gambling, players typically use it in reference to the degree of short-term unpredictability of the outcomes in a given game.

1High Volatility = Sharper Swings

Thus, when someone says a slot has high volatility, they typically mean gamblers will experience sharper up and down swings in terms of wins and losses.

The higher the standard deviation, the more the short-term outcomes will deviate from the average theoretical return.

2Low Volatility = More Gradual Outcome Distribution

Conversely, saying a game has low volatility suggests less pronounced swings and a more gradual distribution of results.

A lower standard deviation means short-term results will deviate less from their expected theoretical averages.

Volatility Levels in Online Slots

A slot’s volatility level gives you an idea of how often you can expect to win and how large or small your payouts would be. In other words, volatility levels indicate the degree of risk associated with playing online slots for real money.

It follows that knowing a slot’s volatility level gives players an approximate idea of what they can expect in terms of prize size and hit frequency.

This information helps them make better-informed decisions when selecting slot releases based on personal style and bankroll size. Online slots are normally grouped into the following three categories depending on their volatility level.

1Low-Volatility Slots

Low-volatility slots produce smaller but more frequent payouts. Matching combinations occur every five to ten spins on average so the risk of bankroll depletion is lower.

2High-Volatility Slots

High-volatility slots involve a higher degree of risk of depleting your session bankroll. While payouts are significantly larger, winning spins are few and far between.

Such slots have the potential to yield massive prizes but you need a large enough bankroll to weather out the longer losing streaks and endure the greater variance.

3Medium-Volatility Slots

Medium-volatility slots are a blend of the previous two types. Here the payouts are of average size and occur relatively frequently. Such slots are the perfect fit for spinners who want to incur lower risk while having a decent chance of landing relatively large payouts.

Factors That Can Help You Work Out Slot Volatility

Calculating a slot’s volatility by yourself is next to impossible as there are way too many variables you need to factor in. Most of these variables are known only to the software developers who design the games, not to mention the required computations are way beyond the mathematical capabilities of the average slot buff.

The examples we previously gave involved a very limited set of numbers so the standard deviation computations were rather simple. Unfortunately, this is not the case when it comes to slots, which also happen to be some of the most volatile games you can possibly play at an online casino.

Few software developers disclose the volatility of their slot releases to the public, with NetEnt being one example. With that said, players can determine the approximate volatility of slots by considering the factors listed below.

1Factor #1 - The Top Prizes in the Paytable

The high level of risk inherent to slots is partially due to the huge discrepancies between the minimum and maximum prizes they can produce. Greater payout discrepancies typically indicate higher volatility levels. We shall use the paytable below to demonstrate this point.

5 sheriff badges = payout of 10,000 credits
5 pistols = payout of 3,000 credits
5 cowboy hats = payout of 500 credits
5 pairs of cowboy boots = payout of 250 credits
5 liquor bottles = payout of 50 credits
5 dynamite sticks = payout of 25 credits
5 spurs = 10 credits

As you can see, the top payouts for five matches in this slot range from as little as 10 credits to a whopping 10,000 credits. The game must somehow compensate for the highest prize of 10,000 credits and this usually happens by awarding the smaller wins less frequently.

Also, a smaller difference between the prizes for four and five matches could be indicative of lower variance and lesser risk. The greater the gap, the higher the level of risk involved in playing a given slot.

The odds of winning the top prize are quite low, so players can often end up losing quite a bit within a given individual session. This translates into higher volatility and risk of losing your bankroll, especially if it is smaller.

2Factor #2 - The Lower Payouts in the Paytable

The prizes on the lower spectrum of the paytable are also worth checking out. Most online slots typically yield their smallest prizes for three-of-a-kind combinations, with payouts ranging from even money to five times the bet.

Although less thrilling, smaller payouts also have an impact on volatility. A slot with several low-paying combinations is likely to yield payouts more frequently. It follows that reel spinners can expect to get a greater percentage of their short-term wagers back.

3Factor #3 - Abundance of Special Features

The rule of thumb with online slots is that special features like free spins and bonus games tend to increase the volatility. Such features are undoubtedly very exciting, not to mention potentially lucrative. However, the trouble with them is that they can also drain a significant portion of a game’s theoretical return. At the same time, they could be difficult to trigger in some cases.

We recommend you check the info sections of the slots you are interested in or read our detailed slot reviews beforehand to see how many special features each game has. High-volatility slots are often very rich in features.

4Factor #4 - Look Up the Maximum Bet

Some slots allow players to risk as many as $150 per spin, while others restrict maximum bets to $10. Maximum bet size can also be indicative of a given game’s volatility. Highly volatile slots usually come with lower maximum bet limits precisely because they have the potential to yield mind-boggling prizes within a single spin.

Think of this as a form of damage control for casino operators. If you hit a top payout of 10,000x the bet with a $150 wager, you will essentially pocket a whopping $1.5 million in prize money from a single spin!

Testing slots in demo mode with free credits can give you at least a vague idea about their volatility levels. You are most likely playing a high-volatility slot if the game consistently takes twenty or so rounds to pay out.

So which slots are better - those with high volatility or those with low volatility? There is no one answer to this question as it all depends on personal preferences, individual risk tolerance, and bankroll size. Going for low-volatility slots is the logical thing to do if you play on a shoestring budget you want to preserve for more than half an hour. High-volatility slots are usually the better alternative for slot high-rollers who seek greater excitement and have enough money at their disposal to ride out the longer strings of losing spins.

Recommended Low-Volatility Online Slots:

Recommended High-Volatility Online Slots:

Starburst by NetEnt (96.10% RTP)

Dead or Alive 2 by NetEnt (96.82% RTP)

Dragon Kingdom - Eyes of Fire by Pragmatic Play (96.50% RTP)

Vikings Go to Valhalla by Yggdrasil (96.00% RTP)

Jackpot Raiders by Yggdrasil (96.30% RTP)

Book of Dead by Play’n GO (96.21% RTP)

1429 Uncharted Seas by Thunderkick (98.50% RTP)

Immortal Romance by Microgaming (96.86% RTP)

Can You Work Out Slot Volatility Yourself

Standard Deviation, Variance, and Volatility

Standard Deviation

Determining Means and Standard Deviation

1Example 1. Calculating Arithmetic Means

2Example 2. Calculating Root Mean Square (RMS)

3Example 3. Calculating Standard Deviation (SD)

The Concept of Variance

The Concept of Volatility

1High Volatility = Sharper Swings

2Low Volatility = More Gradual Outcome Distribution

Volatility Levels in Online Slots

1Low-Volatility Slots

2High-Volatility Slots

3Medium-Volatility Slots

Factors That Can Help You Work Out Slot Volatility

1Factor #1 - The Top Prizes in the Paytable

2Factor #2 - The Lower Payouts in the Paytable

3Factor #3 - Abundance of Special Features

4Factor #4 - Look Up the Maximum Bet

High-Volatility or Low-Volatility Slots - Which Should You Choose?