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What does RTP mean in gambling?

You might have seen this abbreviation before, or even know what it stands for, but what does RTP mean in gambling really? This formula can be deceptively simple, and a lot of times players misunderstand its true meaning. Let’s learn more about it with the help of Mark Dash of DashTickets.  

What is RTP?

RTP stands for Return To Player, and it is a percentage of money that players get back in form of prizes for playing the machine. For example, an RTP of 97% means that for every 100,000$ spent by players, the machine will return 97,000$ in the form of rewards. As a player, you generally want to choose games with a high RTP.

There are several important aspects of this definition, though. 

First of all, RTP only truly works on a large scale, with a huge number of games. That means that you as a single player shouldn’t expect to put a dollar into the machine and get 97 cents back as immediate winnings. RTP is supposed to work statistically — for example, over a certain period of time or a number of games. 

Secondly, RTP is calculated for all players, and not just you, so while it can be a generally true number, it won’t work on an individual scale. 

Here’s an example: if we take the same 97% RTP and then ask 10,000 players to input 100,000$ total into the machines, they are supposed to get 97,000$ back. However, these winnings aren’t going to be evenly distributed between them. Some people might get lucky, earning more than they’ve deposited, while others will lose most of their bet, but the overall RTP percentage will stay true.

It is also worth mentioning that RTP really only calculates your returns on winnings if you decide to cash them out, rather than spend on a game again. 

Think of it this way: if you have 100 dollars and play a 1-cent game with 97% RTP over an infinitely large number of games, you are expected to get 97 dollars back. However, if you use some of these winnings to continue playing, you will also lose money from them at the same 3% rate — in theory, and throughout a colossal number of games. 

What that means is you shouldn’t treat a 97% RTP rating you see as a guarantee that you won’t be able to lose more than 3% of what you’ve placed. In reality, when it comes to a single person playing, you can easily get unlucky and your returns will be way lower.

Why does RTP matter and how is it measured?

Despite all of these flaws, RTP is still considered one of the most important metrics in gambling, with some governments even requiring casinos to inform players about each game’s RTP. 

When it comes to importance, you can easily see why RTP is so crucial — it is a simple way to at least somewhat inform players on what they can expect from the machines (although it can be misleading without proper explanation). But how do you really measure it?

Well, let’s take the UK as an example. According to the country’s Gambling Commission, the RTP on compensated machines is measured over 10,000 or 100,000 games, and this number goes significantly higher for random machines.

Now you might be wondering what’s the difference between the two. 

To put it briefly, random machines are exactly what they’re called — they’re devices that produce completely random results that only depend on statistical chance.

At the same time, compensated machines vary the chances of a win or the number of winnings depending on previous results and set RTP. For example, if the machine has been outputting a rather big number of losses recently that started impacting its desired RTP, it will increase the odds for wins or will provide more rewards to compensate for it. 

Random machines	Compensated machines
Random outputs	Outputs are varied and compensated based on desired RTP
Require millions of games to calculate RTP	RTP can be calculated within 10,000 or 100,000 games

This practice enables less volatility in the player’s experience and provides a more even spread of wins and losses. That’s why calculating RTP for this type of machine is generally easier than with a random one, and the UK government requires casinos to specify which type of machine you’re about to use.

As you can see, the only way to truly measure RTP is to consider thousands of games, so it is mostly a statistical figure, rather than something you as a player can rely on. Despite that, as you can imagine, a higher RTP percentage is still beneficial to you, so you should generally choose it when possible.

What is a good RTP?

In general, anything lower than 96% is considered low RTP. What you should know here is that sometimes you can hear the term “house edge”, which is the percentage the house gets from a certain game. You can treat it as the exact opposite of RTP and use house edge to calculate it when necessary. For example, if someone mentions a house edge of 6%, that means a 94% RTP, and so on.

RTP	House edge
95%	5%
97%	3%
99%	1%

Another thing the team at DashTickets considers worth mentioning is that you should always be careful when choosing casino or gambling websites since there is no real way to know how true the statement of a certain RTP is unless you interact with a well-known and trusted brand or a government-approved casino.