If you play slots, you almost certainly know what RTP is. RTP, or Return to the Player, is a measurement calculated for each slot game that describes how much money it returns in the long run. For a slot with an RTP of 92%, you can expect to keep roughly $92 for every $100 fed into the machine. However, it would be rare to end up with exactly $92 after feeding in $100 on the previous example machine because you will win different payouts on each spin. Higher RTP indicates a better slot machine when everything else is equal.
Unfortunately, RTP is only one measure of how good a slot machine is. To illustrate this point, we will construct four simplified slots that all have the same RTP. These slots will feel incredibly different to play. Evaluating their differences will reveal other significant metrics for slot performance which could be the key to finding one that feels right for you the next time you are at a casino.
Slot 1: Consistently bad
As a simple starting example, let’s consider a slot that no one in their right mind would play. You feed in $1 each spin, and every single time you “win” $0.95. I say “win” because this is a loss disguised as a win (LDW)—the net result is that you lost $0.05. You can picture a slot where all of the reels have a 7 for each symbol, and there’s only one pay line: five 7’s pays $0.95. Every time you spin, you always land on all 7’s.
Because of the simple mechanics, it’s easy to calculate the RTP for this slot. On each spin, it returns $0.95 / $1.00 or 95% of your money. Thus, the RTP is 95%, which is competitive with slots today. So why is this slot so bad compared to others?
The problem is that the win frequency (the percent of the time the slot wins more than you paid to spin it) for this slot is 0%. You can never win playing it! Spinning this slot is just a slow way to burn up your money.
Slot 2: Big jackpot
Let’s take a look at a slightly more complicated slot. For each $1 spin, you win a $5000 jackpot 0.019% of the time and win nothing the other 99.981% of the time. This one is slightly harder to picture as a real slot, but imagine that most of the wheels have blank spots, but they all have one 7 on them. If the 7’s line up on all slots, you win the jackpot, but this only happens very rarely.
It’s a bit harder to calculate the RTP for this slot. Fortunately, we can always calculate RTP as the total of the payouts times probabilities, divided by the slot cost. Thus, we get:
It turns out that both Slot 1 and Slot 2 have the same RTP, but they feel different. With Slot 2, you lose $1 on each spin if you don’t win the jackpot, compared to only losing $0.05 for Slot 1. It might take a long time, but eventually, someone will win the jackpot on Slot 2, and if it happens to you, you’ll probably end up walking away as a major winner! The metric that captures this concept is win frequency. Slot 2 has a win frequency of 0.019%, compared to 0% for Slot 1.
Another metric on which these slots differ is variance. Variance has a technical formula that can be calculated (see the end of this article if you’re curious). Usually, however, it suffices to compare variance on a simple scale of low to high. Slots have higher variance if the payouts differ substantially from spin to spin. Slot 1 has no variance since the payout of $0.95 happens every single time. In contrast, Slot 2 has a high variance, since the large, rare jackpot is much higher than the other payout of $0.
Would you play Slot 2? I wouldn’t, though I’m sure that some people would. This slot kind of feels like the lottery—you win a bunch of money if you get lucky, but most times you end up losing (side note, this slot has a much higher RTP than the lottery, which is commonly between 50% - 60%). Slot 2 is tough to play because the frequent losses can be demoralizing. Eventually, you begin to question whether there is any chance you will win the jackpot at all, and so you walk away to find a better machine.
Slot 3: Rarer jackpot, but occasional wins
The former two slots are sort of extreme examples meant to illustrate a point. Let’s look at a slot that is slightly more complex. This machine costs $1 like the others, but it offers three possible payouts: $0, $2.25, and $5000. These payouts happen 79.99%, 20%, and 0.01% of the time, respectively. So while the jackpot is the same size as in Slot 2, it appears about half as often. To compensate, a win of $2.25 (a net win of $1.25) happens 20% of the time.
It turns out that this slot also has an RTP of 95%, as we can calculate:
How does this slot compare to the others? The key difference is its win frequency. Slot 3 wins 20.01% of the time, compared to 0% and 0.019% for Slots 1 and 2. This feels much different as you play since you get a win roughly one in every five spins. In the long term, this still ends up eating quite a bit of your bankroll unless you can win the jackpot. A win of $2.25 gives you roughly one extra spin, and if this only happens once in five tries, you might not be able to play very long. Some people will walk away with the jackpot in Slot 3 and likely end up way ahead of what they brought in, though this will happen less often than it would for Slot 2.
This slot has a high variance, almost the same value as slot 2. The large jackpot produces high variance in both.
Overall, this feels more realistic as a slot. You end up losing on most spins, but there are occasional wins and the hope for a large payout. Most slot machines these days have hundreds of different payouts of various sizes. Despite the simplicity of Slot 3, it is also starting to feel more playable than Slots 1 and 2.
Slot 4: No jackpot, several small payouts
This slot takes away the large jackpot from Slots 2 and 3 but offers an additional small payout with high frequency. For each $1 spin, the possible payouts are $0, $0.75, and $2.25. These payouts happen 13.3%, 66.7%, and 20% of the time, respectively. The $2.25 payout occurs with the same frequency as Slot 3, but now there is a high chance of recovering most of the spin price with a $0.75 payout (net loss of only $0.25).
As you may have guessed, this theoretical slot is also designed to have an RTP of 95%:
The win frequency for Slot 4 is almost identical to Slot 3 (20% vs 20.01%). However, the variance for Slot 4 is much smaller than that of Slot 2 and 3. Since the payouts are closer together and happen with high frequency, we would classify this slot as having low or very low variance.
Another metric worth mentioning is hit frequency. This is very similar to win frequency, except you count the number of times the slot gives you any payout, even if that results in a net loss. For Slot 4, the hit frequency is 86.7% which we get by totaling the frequency of the $0.75 or $2.25 payouts. For Slot 3, it is easy to see that the hit frequency is identical to the win frequency at 20.01%. For most slots, the hit frequency is considerably higher than the win frequency, as they often contain LDWs.
Which slot would you play, Slot 3 or Slot 4? I think different people would prefer one or the other. Some relish the opportunity to win a large jackpot, even if the chances of it happening are tiny. Others might want to try their luck at several spins on Slot 4, where they have a much better chance to leave as a winner since the losses are typically smaller. This is where knowing the different metrics for a slot could be advantageous. Simply seeing that a machine has 95% RTP does not tell you whether it is more like Slot 3 or Slot 4 or something entirely different.
Choosing a slot that’s right for you
The four slots that we’ve described are hypothetical, but they illustrate how knowing the RTP of a machine isn’t sufficient for understanding how that slot is going to feel and whether it’s right for you. Three additional metrics help complete the picture
- Variance: how different are the payouts for the given slot?
- Win frequency: how often does the slot provide a winning payout?
- Hit frequency: how often does the slot return any money to the player?
If all four metrics were available for a given slot, that information would go a long way toward deciding which machine suits your play style. The problem is that most casinos only provide RTP. You can seldomly find the other metrics, and more often, you have to infer them from the available information and brief play. For example, if a slot advertises a large jackpot, you can expect its variance to be higher and that it will likely have a lower win frequency to compensate for the rare reward. Generally speaking, slots with more pay lines can have lower variance and a higher hit frequency, but not necessarily higher win frequency.
However, the best indication of these metrics is to play the slot for a few spins. If it feels like you are often losing, but the RTP is still relatively high, there are likely some large, rare payouts. If there are many small wins or LDWs, this machine probably has lower variance and a high hit frequency. Use this information to guide whether the slot machine suits your play style.
But even with all four of these metrics available, the complexity of modern slots makes the decisions even more difficult. The increasing number of pay lines, progressive jackpots, and bonus rounds can influence how a slot will feel. The price of each slot also makes a difference, since casinos typically reserve the highest RTP slots for those with high spin prices. The best advice there is to first narrow down slots that are within your budget, then choose a high RTP among those slots. Finally, see if you can infer the metrics discussed here for the particular slot you choose and switch machines if it doesn’t suit your play style.
Bonus: variance calculation
To calculate the variance of a given slot, you first need to find its RTP. Then, for each payout, compute (payout − RTP)2 and multiply this quantity by the probability of that payout. This gives you one term for each payout—add them up to compute the variance. It’s common to also calculate the square root of the variance (called the standard deviation) since it has units in dollars.
