Gambling Concepts – Variance and Volatility

Two terms that you’ll see referred to often in regard to 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

Let’s talk about pokies with low volatility. These games often give you smaller wins and not too many losses. Imagine a chart for these games; it wouldn’t show big ups or downs.

These games are great if you don’t like to bet big or risk losing a lot of money quickly. However, the flip side is that you shouldn’t expect to win big amounts often. You might have to play for a long time before seeing any large wins, if you get any at all.

Medium Variance

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

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

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 online casino games based on variance, you can control some of the swings inherent with playing pokies.