What Is Variance?

Published 29 Oct 2018, 9:26 a.m.

There are plenty of questions that slots players ask either themselves, or other slots players. Sometimes the answers to these questions can be a tad misleading, especially if there’s some sort of a conspiracy theory behind the answer. One of the questions that is often neglected but is actually quite important is ‘What is variance?’. Questions about variance aren’t as common as questions about jackpots, other game prizes, symbols, bonus features, or even RTP, but we have to say that variance is a pretty significant issue when it comes to slot games.

Variance And Standard Deviation

Still, before explaining ‘what is variance’, we would have to get into few other topics. Before giving you a variance definition, we have to point out that here we discuss the meaning and importance of variance in relation to slots, so, if you’re looking for an answer to the question ‘what is variance in statistics’, you won’t find it here. Well, we might actually touch on the topic, but we will focus on our specialist topic – online slots. At SlotsWise you will find both games with high variance, as well as low variance slots. Below we’ll explain the difference between high variance and low variance games. 

The standard or basic definition of variance is connected to variability of a certain set of numbers. It can be said that it shows us to which degree a set of numbers is spread out. Let’s say that we have an expected value of 100, and we get two results – 30 and 170. We still get the expected average value, but the variance of the two results is pretty large, each is 70 points away from the expected value. If we have a similar example where the two results are 99 and 101, in that case we have a very small variance, as the two figures aren’t that fat away from the expected value. 

On the other hand, if we have a way to predict the specific variance in each case, then we have a variance with standard deviation. That is to say, if we have a formula that enables us to determine the variance, we have a way to calculate the effects of the variance and depending on the implementation in that particular case, plan our next actions. With slots the situation is somewhat different, there’s no standard deviation, because everything is entirely random. 

Slots Variance Vs RTP

Let us now explain the specifics of slot variance, which will give us the answer of the question ‘What is variance?’ when it comes to slot games. One crucial aspect of slot games is the amount of funds that the game returns to players as winnings. This is called return to player (RTP) and it’s expressed as a percentage. The percentage is set by the game developers and it is tested before the game is released. Casinos often publish the average percentage figure for all their games, or all their slot games, but this is a simple calculation and we’ll leave that aside for now. Here we’ll focus on the RTP percentage for an individual game.

The best way to explain RTP is by giving you an example. For instance, we have a game with an RTP of 96%, this means that out of £100 wagered on the game, the slot will return £96 back to players as winnings. Still, we mentioned that this is a theoretical percentage, meaning that this is not the case for every £100. It’s just an average figure. Now you might wonder, if 96% doesn’t mean that 96% is returned in every case, then what does it mean. 

Here we get to our original point – variance. Another word for variance is volatility. So, in a way, the answer to the question ‘What is variance?’ would be pretty similar to the answer of the question ‘What does volatility mean when talking about slot machines?’. To put it simply, variance is the difference between the set RTP percentage and the outcome in particular series of a number of spins.

Sample Variance

If you play a series of, let’s say, 20 spins on a particular game, there will be two figures that you will be particularly focused on – the amount of funds you had in your casino account at the beginning of the session and the amount of funds you had at the end of the session. Or to be even more specific, the amount you wagered on all spins taken collectively and the amount that you won from the spins, i.e. the difference between the two. We’ll set the RTP of this imagined game pretty high, at 97%. 

So, let’s say that you played with £5 per spin, or all spin stakes amounted to £100. Now, let’s assume that you had a total of 15 losing spins. On two of the five winning spins you won £20 each, one spin was more successful, and you managed to hit £40 and on the two remaining spins you won an amount equal to your wager - £5. That amounts to a total of £90, which is 7% off the RTP percentage. If there was no variance the amount would’ve been £97. 

If you compare more than few game sessions, you would get a clearer picture of the game variance. For instance, if we take into account 20 sessions each consisted of 20 spins and we see that the RTP for each and every session is more than 20% off the average RTP, we can say the variance is quite significant.

If you’re playing a game with higher variance you can expect to win less often, but the prizes would be a lot more significant, whereas if you’re playing a slot game with a lower variance you can expect to win a lot more often, but the amounts that you’ll manage to win will be lower. It is a matter of personal preference and your style of play. 

It doesn’t matter whether you prefer low variance or high variance games, our featured casinos offer all kinds. Register with one of the SlotsWise casinos and play the games you like.