Everyone wants a casino game that pays out well. After all, a lot of the fun of gambling is the hope of winning a big sum of money.
Every game has a theoretical RTP, or “return-to-player” (here’s more on RTP). This is the percentage of each wager that the game pays out in winnings on average over time. The opposite of that is the house edge, or the amount that the casino keeps on average.
Regulated online casinos must make this information available to their players. In many states, retail casinos have to post it too. Because of that, it’s easy to find lists of the games with the best payouts, including right here at Bonus.
But that raises other questions.
Why is the payout for some games so much better than others? And if that information is easy to find, why does anyone play games with a worse payout?
The answer to those questions is that there’s more to the casino business—and the gambler’s experience—than just money in vs. money out.
The Casino Gambling Transaction: Money for Thrill
Gambling is an entertainment transaction. It’s easy to lose sight of that amid the ups and downs. However, whether you play casino games for a few hours and lose $50, or you spend the same amount on dinner and a movie, you’re exchanging money for something you hopefully enjoy.
The difference is that the cost of gambling is variable. You might lose more or less, or break even, or even come out ahead. Yet, from the casino’s point of view, it all evens out in the long run.
Averaged out over the long term, the price on that exchange is the total value of the bets multiplied by the house edge. For instance, 100 spins on a $1 slot machine with a 4% house edge (i.e., 96% RTP) costs the player $4 on average.
But price isn’t the whole story for either the buyer or the seller. As the player, you care about having an exciting time. You wouldn’t go to the theatre to watch weather channel reruns, even if they were a quarter of the price of a movie. For the same reason, you probably wouldn’t play a boring casino game just because it has a high RTP.
The casino, meanwhile, cares about its bottom line. Adding games costs money, so a casino will only add them when the benefit outweighs the cost.
Different games offer different value propositions for the player, but the math always needs to make sense for the casino.A game with a tiny house edge can still be profitable if it attracts enough players betting enough money. However, there are various reasons a game might need to pay out a little less in order to be worth offering.
5 Reasons for Better Casino Payouts
Minimum Stakes
A casino’s profit on each bet is thehouse edge multiplied by the bet size. So, it’ll make as much money from a $10 bet with a 5% house edge, or a $50 bet with a 1% house edge.
If players’ typical bet sizes for a game are small, the house won’t earn enough money to be worth offering the game, unless it’s holding more from each bet.
This is especially noticeable in a retail environment, where overhead costs are an issue. If a roulette table isn’t making enough money, for instance, the casino has a choice. It can increase the minimum bet or replacing the wheel with one that has an extra zero on it, which makes for a bigger house edge.
It’s also usually the case in retail casinos—although usually not online—that higher-stakes slot machines have better RTP.
Pace and Volume of Play
There’s a third way a casino can earn more money, which is increasing the number of bets a player makes. Of course, the casino can’t force you to play, but they can shorten the experience, making it likely that you’ll make more bets in the course of a session.
Slots are the classic example of this. If an online casino offers slots with a $0.10 minimum bet and 96% RTP, it’s making less than half a cent per spin. However, those games make up for it by the fact that players might spin 500 or 600 times per hour.
For a slower game to be as profitable, the casino will need a higher minimum, a larger house edge, or both.
Looking outside the casino environment, lotteries offer an example at the extreme opposite end of the spectrum. A player buying Mega Millions tickets might only make one purchase a week. As a result, lotteries offer exceptionally poor RTP—often as low as 50% for draw tickets—as they would make no money otherwise.
Volatility
Volatility describes whether a game pays out a small number of huge prizes or a bigger number of lesser ones.
Gamblers tend to seek out highly volatile games because the possibility of a big win is what makes gambling exciting. Many are willing to accept a lower RTP for a game with a higher advertised prize.
On the other hand, as a business, the casino would like to keep its risk to a minimum. For one thing, paying out jackpots can make revenue unpredictable, particularly for a smaller operation. They may need to limit stakes or pay for prize indemnity insurance on the most volatile games to eliminate the chance of being bankrupted by a high roller on a lucky streak.
Big prizes also make it more likely that a player chooses to walk away a winner from a retail casino, or withdraws winnings from an online site. A player who wins $50 might just use it to extend their session and ultimately lose it back. However, one who wins $50,000 on a slot machine is more likely to keep a lot of that money and spend it elsewhere.
All of these factors contribute to higher volatility games usually having a bigger house edge to compensate for the downsides from the operator’s perspective.
Development & Overhead Costs
A restaurant will charge more for a steak dinner than a bowl of pasta because the ingredients are more expensive for them too. The same logic applies to casino games.
For video slots and online games, fancy graphics and sound can be an investment. Branding deals for TV, movie, or celebrity-themed slots are another cost. Bigger file sizes also present an opportunity cost for bundled online casino apps, since adding one game means removing another to avoid increasing the size of the download.
The more innovative a game is, the more difficult it can be to receive regulatory approval. The additional testing, patents, and application fees can increase the amount of money it takes to bring a game to market.fa
In a retail environment, some games require more staff and floor real estate, while others require expensive hardware. The same logic applies to live dealer games for online casinos. These require dedicated studios and additional employees, unlike their purely digital counterparts.
Casinos need to cover those costs by increasing the minimum bets, designing the game to have a higher house edge, or both.
Niche Appeal
So far, we’ve discussed the amount of money that a game makes from a single player. But the number of players that the game attracts also matters.
Developing a game and getting regulatory approval is a fixed cost. The more players are playing it, the easier that cost is to recoup, because it’s divided more ways. So, a game with a narrower appeal will need to make more from each player to be worth developing.
At the same time, popular ideas attract more copycats. If a game with a high house edge turns out to be a smash hit, other companies will inevitably create their own variations on it. In order to draw players away from the original, those copies may offer better odds.
This combination of factors means that more exotic and uncommon games will usually have a lower RTP than casino staples like blackjack, roulette, and traditionally designed slots.
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