House Edge in Slots Explained: RTP, Volatility & How Slot Odds Really Work

Published: Feb 6, 2026 11:35

by Catalin Barboianu

Updated: Feb 9, 2026 10:15

by Ryan Faucher

8 min read

Slots are nowadays the most popular casino games and one aspect contributing to their popularity is diversity. There are tens of thousands of slot games on the market, each with its own design and statistical indicators. Every slot game has its own house edge, and this statistical indicator stands as an important criterion of choosing between several games.

In this article you will see how the house edge is computed in slots, how it should be interpreted correctly, and how players can refer to it for playing informed and making the right decisions in their gambling.

House edge as statistical average

In any game of chance, a bet has an expected value, which is given by three factors that come into its equation, namely its stake (S), payout rate (r), and probability of winning (p):

EV = S × r × p − S × (1 − p).

Expected Value in Slot Machines

In this formula, S × r is the profit in the case the bet is won, and 1 − p stands for the probability of losing the bet. EV can also be expressed as percentage of the stake:

EV(%) = r × p − (1 − p).

The house edge of a bet is defined as the opposite in sign of the expected value:

HE = −EV = (1 − p) − r × p.

It reflects the percentage of the stakes that is retained by the house as their profit over the long run.

In slots you place a bet like in any game of chance, namely you bet that at that spin a winning combination of symbols will occur on a payline and the stake is the credit you insert before spinning.

As each slot game has a payout schedule with several payout rates (one for each winning combination), these rates (payout multipliers) will contribute to the EV and implicitly to the HE, as follows:

In general, if there are n winning combinations in the payout schedule, p₁, p₂, …, p_n are the probabilities for each of these combinations to occur on a payline, and r₁, r₂, …, r_n are respectively their payout rates, then:

HE = 1 − ∑_i=1ⁿ (p_i × r_i)     (*)

House edge reflects the percentage of the total wagered credits that a slot machine retains as profit over the long run.

Weighted Means and Long-Run Averages

House edge is a kind of average, but not an arithmetical average. It is actually a weighted mean, where the weights are probabilities. Such a mean is called statistical average and only applies to an experiment with an infinite number of trials. Particularized to a slot machine, the HE as a percentage means the share of the total credits that were, are and will be wagered at that machine over time, retained by the house (operator) as their profit (what remains after the prizes are paid).

RTP (return to player)

For a particular slot game, one cannot compute directly the HE by its formula (*) in the previous section, just because they do not have inputs for all the factors showing in it. Indeed, we know the r_i (the payout rates), but not the p_i (probabilities), because the slot producers keep secret the mathematical design of their games, which would provide us with the probabilities associated with the winning combinations.

This design, along with the probabilities and the statistical indicators of a game are enclosed in the so-called PAR sheet (Probability Accounting Report) of that game, which is a document for internal use of the producer and restricted to the public. Yet most of the slot machines display information about their house edge, as it is a legal requirement in most of the jurisdictions.

In slots, it is customary to express the house edge in a different form than in the other casino games, namely as Return to Player (RTP).

How RTP Is Calculated

RTP is a statistical indicator reflecting the percentage of the stakes that are returned to players as prizes over the long run. Mathematically, the RTP is defined as:

RTP = 1 − HE = ∑_i=1ⁿ (p_i × r_i)     (**)

The simplest way to express the RTP is:

RTP = (average win / average stake) × 100%, where the average win = prize × probability (of that prize).

Where Players See RTP Values

The RTP is usually displayed in the About menu of the slot machines or on the main screen. It is usual for the machines with multiple credits wagering to have different RTPs for each credit multiplier. The difference comes from the extra bonuses and different payout rates that the machine offers for higher stakes.

Usually, the RTP in slots ranges between 80% – 98%, with the most frequent values in the upper half of this interval.

Once we know the RTP of a game, we can immediately find its house edge, according to (**). For instance:

The correct interpretation of the RTP

First, we must bear in mind that the RTP is just another way to express the house edge, and as such it reflects an average loss and not any gain. In order to do that, we must always refer to its mathematical definition and not to the term in its literal meaning.

RTP Reflects Loss, Not Gain

The fact that the RTP is valued over 90% should not impress us in any positive way (as was actually the producers’ and operators’ intention). If we focus on the house edge instead, we will find it higher than in most of the table casino games for many slot games.

RTP as a Statistical Average

Second, we should not forget at any time that RTP is also a statistical average, like expected value and house edge. This means that it cannot be applied or associated with limited play, either if we talk about the length of the playing sessions or the number of players using a certain machine.

These two basic requirements are essential for the correct interpretation of the RTP and failure to understand them can result in misconceptions and irrational beliefs that can fuel a problematic gambling behavior.

RTP cannot be applied to short sessions or individual players; it only manifests over a very large number of spins.

Common Misconceptions About RTP

Here are a few instances of such false beliefs, which can be corrected by getting informed about how a slot machine works, as well as what its statistical indicators are and how they should be interpreted:

• That RTP percentage of those playing at that machine will win something.
• That machine will give out a prize with a relative frequency given by the RTP percentage.
• If you bet a certain amount at that machine you are guaranteed to win that RTP percentage of that credit.

The correction of these false beliefs should start with the nature of the RTP as statistical average, which means that it applies to the winning amounts in a cumulative way over the long run, and not per a limited time or number of spins, per a number of players, or per a number of wins.

Many players also come to misinterpret the RTP messages displayed on a slot machine. For example, on the machines with multiple credit wagering, studies have shown that players do not interpret the two RTP values as “the higher the stake, the higher the payout”, but frequently “the higher the stake, the greater chances of winning”. The latter interpretation is incorrect, as it is not consistent with the nature and definition of the RTP. The winning probability (of whatever combination) does not depend on the stake; however, the payout may be higher for a multiplied credit, which is actually reflected in the increased RTP.

House edge as criterion of choosing a slot game

Slot players choose their games by various criteria, including subjective; for instance, by a favorite theme of their design. Among the objective criteria, the house edge is the most important. The general principle that the lesser the average loss (or the higher the RTP) over the long run the better also stands valid here as in any game of chance, especially if the long-run play is concerned. But other factors related to personal gambling may be involved as well in the decision of choosing between the games to play.

The second requirement for the correct interpretation of the RTP (as statistical average) also tells us that the RTP as displayed on a machine is approached only after a sufficiently large number of spins and as such may not manifest in short sessions.

Therefore, the player’s bankroll and intended time of playing are factors to be considered when choosing a machine and another statistical indicator besides RTP can be used as criterion, namely volatility. Volatility reflects the distribution in prizes of the RTP over a given number of spins; else said, how frequent and how big the wins are in average over that interval.

For a player with low bankroll it is recommended to start with a low-volatility game (assuming this statistical indicator is known) regardless of its RTP, so that the possible small but constant wins strengthen their bankroll enough to move to medium- or high-volatility games, in which to chase much higher prizes.

This strategy may change if we factor in the time spent, as the more spins, the more accurate the average loss approaches the RTP. In general, for a long-run player who is not restricted by their bankroll, the volatility factor becomes weak as a strategic criterion of choosing and the RTP remains the most relevant one.

For long-run play, the RTP is the most relevant criterion when choosing a slot game.

Conclusion

House edge in slots is computed as in any other casino game; however, the computation is not possible as long as the mathematical design of the slot game is not known. The house edge in slots is expressed through the RTP (return to player), which is a statistical indicator made public on most of the slot machines.

The RTP is a statistical average and should be interpreted as such. The incorrect interpretation of the RTP itself or the RTP messages displayed on machines or in other places may result in misconceptions and problematic gambling.

The RTP is an objective criterion of choosing a slot game (along with volatility, in some cases) and should be the only one if the long-run play at the same machine is concerned.