In simple words, the variance of a game determines the rate at which your bankroll changes over the course of the game. It is very common to win small amounts of money in games with low variance. In this case, your bankroll will gradually change downward. You will lose in most rounds of a high variance game, but if you win, you will get big wins. Constant downswings are sometimes replaced by significant winnings.
The statistical distribution of winnings can also be used to describe the variability of a game. We talk about the distribution of winnings expressed as a multiple of the bet, because winnings are usually proportional to bets. When you bet on a color in roulette, each winnings will be twice the bet. Betting on a number in roulette pays out 36 times all winnings.
Slot machines are a little more complicated. Multiple combinations and different bet multipliers give you chances to win. Because of this, describing slot machine variance for a number is very difficult and game providers only use the terms “small”, “medium” and “high”. We believe that slot machine variance can be described in more detail. We decided to create a separate article on slot machine variance because the topic is somewhat complex.
Your chances of walking out of the casino a winner depend significantly on how you play. “The higher the variance, the better” is the rule of thumb. The first reason is that winning an amount of money that satisfies you in a single round is easier in games with high variance. The second reason is that more rounds lead to more winnings, so you can’t put too much of your previous winnings on the line, which negatively affects the RTP betting system. In other words, you lose more often. The third reason is that you can bet less to win the same amount if you can win a larger amount on multiple bets. It also lowers your bets, which reduces your losses in the long run.
We are very interested in how underestimated the variance is compared to the RTP. Many so-called experts evaluate the game only by RTP. Because the RTP is lower, roulette is worse than blackjack. This strategy is completely flawed. In fact, excluding cards, roulette has a much higher payout percentage than blackjack. The higher variance can easily trump the RTP. Every intelligent player should be aware of this fact and learn how to utilize variance to achieve their goals.