Eli5: how does rtp work?


If a game has a high 99% rtp, then it means if you, for example, wager $100 in total over a long period of time, then you’re going to lose $1.

But how long is a long time? Is it the amount I wager in total, the number of games I play, or me playing the game for one month, year, or lifetime?

Also, if I constantly cash out earnings, does rtp still work?

In: 7

RTP is calculated on a theoretical infinite amount of time. This is so that random variations in each game does not matter. And the RTP is assuming you cash out all your returns. So basically if you sit down at a game and buy $100 worth of chips, assuming you get an infinite amount of infinitely small chips. You then gamble all these chips, one in each game. This naturally takes an infinite amount of time. When you lose you end up losing your chip but when you win you do not put your winnings back into the pile but rather put it in your pocket. When you have gambled all your chips you should end up with $99 worth of chips in your pocket. This is your return.

Of course this is rather unpractical to play for this long. But the longer you play the closer to this limit you get. And for a casino the more games it have the closer to the RTP it is likely to get. So the casino can calculate how much it is expected to win on each game on average. And for the player you can calculate how long you can play for before you have lost all your cash.

For example if you have $100 in chips and have to bet $1 in each game. If the RTP is 99% then on average you will lose $.01 to the casino in each game. This means you can expect to play 10,000 games before you bust. However a string of bad luck might end your night early and a string of good luck might let you play for longer.

Time is not actually a factor for RTP. RTP is the average return across an *infinite* amount of games.

In practical terms, you can’t actually play an infinite amount of games since you only possess finite time and finite money. However the more games you play, the closer you will get to the RTP.

I think the explanations that include multiple infinits are no good ELI5 explanations.

I think its easier to understand if you think of it on a play to play basis.

If you play a game where you have 99% rtp and the game costs 1$ to play, you will win on average 0.99$ per game back. So on average, you will lose 0.01$ per game since you paid 1$ to play it.

Important is the term average here. Ofcourse you won’t lose 0.01$ when you lose in roulette, you lose it all. But if you play enough times and you average all your losses and winnings, you will find that per game you played, you lost 0.01$. The more you play the more accurate this will be and the random variation of the game will disappear

Any one player can get extremely lucky or extremely unlucky so it’s hard to get any sensible conclusions from looking at one single person.

Instead, let’s look at the casino as a whole. Imagine that I publish, every month, the total amount of money that was gambled, and the total
amount of money that was paid out to punters. Instead of wagering £100 and losing £1, now you expect me to pay out £990,000 out of every £1,000,000 gambled. That’s your 99% RTP. That number will still fluctuate over time, and you should expect to see maybe 98.8% one month and 99.3% the next.

>But how long is a long time? Is it the amount I wager in total, the number of games I play, or me playing the game for one month, year, or lifetime?

It’s the number of games played – a larger number of games gets you closer to the RTP. How many games it takes depends on a different property of the game – it’s *volatility*; a high volatility game is one where you can win thousands of times your original bet, while a low volatility one will only let you win ten times your bet. For a low volatility game a thousand rounds will probably get you close enough to the RTP, while for a high volatility one you’d need millions or even billions of games to hit the RTP.

[Also, progressive slots, where there’s some sort of progress bar or filling the screen up with multipliers that stick around, or in any other way your odds improve as you play, only get their RTP at all if you complete the progress stage]

>Also, if I constantly cash out earnings, does rtp still work?

That’s actually the scenario in which RTP is most meaningful. If you put your winnings back into the casino you have to apply the RTP again, and that rapidly results in losing most of your money.

For instance if you start with $100, bet it on a low variance slot 98% RTP 1c at a time so that you end up with $98 and then also bet that $98, you’ll have $96.02 – rinse and repeat another 32 times and you’ll be down to $50.