Understanding Volatility and Payback Percentage In Online Video Poker

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Online Video Poker

Understanding volatility and payback percentage in online video poker will help you become a better player. You’ll know which online video poker games are beneficial to you in terms of your preferred style of play and what you’re hoping to receive in payback. And you’ll also learn how playing the game with proper strategy contributes to these facets of the game.

In the past few weeks, we’ve been taking you through various aspects of online video poker. We know that a lot of people have been cooped up lately, and online video poker is a great way to enjoy exciting gambling action without having to leave your home. And it’s such a gambler-friendly game that we wouldn’t be surprised if you keep right on playing even when the world gets back to normal again.

We’ve talked about how to play the game, what kind of strategy to use, and which common mistakes you should try to avoid. Now we’re going to look at two facets of the game, payback percentage and volatility, that are a bit more advanced. They’re crucial elements of the game, though, because they’ll affect your bottom line when playing the game.

How Are They Different?

In terms of payback percentage, you’re talking about the actual money that you can expect to win back when playing the game. Knowing what this is and how it’s calculated will help you in a variety of ways. Most importantly, it will allow you to compare one online video poker game to another.

Meanwhile, volatility is related to your bankroll as well, but it isn’t quite the same as payback percentage. Volatility measures the swings between wins and losses you can expect during game play. And volatility actually helps reveal whether a certain video poker fits your specific style.

Beyond understanding what these terms mean and how they are calculated, you should also be able to spot the factors that affect them.
For example, your own strategy can raise or lower both the payback percentage and the volatility of an online video poker game. Your betting habits will also make an impact.

Simply put, these are the two factors that expert video poker players try to determine before moving ahead with their video poker play, whether in a casino or online. When they’re working in your favor, your results will be better than those who are at a disadvantage with payback percentage and volatility. That’s why you should make sure that you have a deeper understanding of them, especially if you want to be a serious player.

In the following article, we’ll walk you through everything you need to know about online video poker volatility and payback percentage. We’ll explain what they are, how they’re determined, and why they’re so important to you as a player. Finally, we’ll give you the tolos to choose online video poker games based on these factors.

Payback Percentage

Payback percentage is an estimation of how much you can expect to return from your original bankroll at the end of an average session. The baseline is 100 percent, which is the break-even mark. Any payback percentage above 100 percent represents an expected gain, while anything below it represents an expected loss.

The vast majority of all casino games, whether played in person at an actual casino or played online at gambling websites, feature a negative payback percentage. This gives these entities the house edge, and it’s how they stay in business. Over the long haul, you will be expected to lose money playing any casino-type game, and online video poker is no different.

How Payback Percentage Is Calculated

Video poker features a pay table, which shows how much will be paid out for each winning combination a player achieves. Meanwhile, the odds of attaining those winning hands are determined by the probability inherent in a 52-card deck, which is what video poker uses, albeit in simulated form.

When you combine these two factors, you can determine the payback percentage for any given game. In addition, any special features attached to the game must also be taken into account.

You can use video poker calculators to determine payback percentage on your own. Or you could also simply look online, since the information for most of the major online video poker games can be easily found.

How Payback Percentage Works During Game Play

It’s important to understand that payback percentage is an average. In other words, it doesn’t necessarily act as an accurate predictor of what your actual results might be.

For Example:

Imagine that there’s a game where your expected payback percentage sits at 99 percent exactly. This indicates that, if you started with a bankroll of $1,000, you’d be expected to have $990 remaining in it at the end of your session. You’d be looking at an average loss of $10.

But that doesn’t mean you’ll have that ratio of payback right from the start. You might play 20 hands and not win a single one of them. In that case, your payback percentage is zero.

You could also come right out of the gate and hit a royal flush on your first hand. In that case, your payback percentage would immediately surge way above 100 percent and would likely stay there for quite some time, even beyond the point where you’ve bet your initial $1,000.

Basically, any time you have a small sample size, the payback percentage is less accurate as a predictor. Luck will have much more of an impact in these situations.

But what about if you were to play that online video poker game hundreds and hundreds of times, betting a significant amount overall each time. At some point, you can expect the payback to settle at that 99 percent mark. All of the luck will have evened out by that time.

What this means is that payback percentage isn’t so important if you’re a casual player. Ideally, you should always choose the game with the highest potential return. But it’s not a dealbreaker if you’re only going to play online video poker once in a while.

But if you really want to play the game at a high level, you should know how to choose the games with the highest payback percentage. That will ensure that you maximize your potential return.

How Strategy Impacts Payback Percentage

To reach the maximum payback percentage listed for a particular video poker game, you need to play the game with perfect video poker strategy. Before you can set about doing that, you have to understand what that means.

Each time that you receive a five-card deal in video poker, there are 32 possible combinations of holds and discards from which you have to choose. Only one of these is the correct play, and that’s based solely on the math.

Take a look at the following deal, assuming you were playing a full-pay Jacks or Better pay table:

  • Four of diamonds
  • Jack of diamonds
  • Queen of diamonds
  • King of diamonds
  • Ace of clubs

In this deal, there are three possibilities which should jump into your mind immediately. You have to figure out how to choose the right one.

First of all, you have four diamonds, leaving you one shy of a flush. There are also three cards to a royal flush with the jack, queen and king of diamonds. And you also have a straight draw with the jack through ace, which are all high cards.

Tough Choice, for Sure

But there is only one of these selections which maxes out the earning potential of this deal. In other words, if you played this deal over and over till infinity, there is one combination of holds and discards which would earn more than all others (it’s the three cards to a royal flush, in case you’re wondering.)

Any time that you make a mistake on this or any other deal in terms of choosing the right combination of holds and discards, you will lower your expected payback percentage. You might get lucky once in a while making the wrong mathematical choice, because the luck of the draw will help you.

But over the long haul, that luck will be evened out by probability. When that happens, if you’ve been making the right selections for every deal, you’ll maximize your payback percentage.

That’s why you should try to learn perfect strategy, especially if you’re trying to grind out online video poker winnings. We suggest video poker training software or strategy charts to achieve perfect play.

Just make sure that those resources are tailored to the specific pay table and online video poker game that you’re playing. Strategy might vary depending on each different game that you play, so you need to make sure you’re receiving the proper instruction.

Understanding Video Poker Volatility

Volatility, also sometimes known as variance, is a common concept in all gambling games. If you’re familiar with the stock market, you probably have heard of volatility as it pertains to stocks. That might help you understand video poker volatility.

Imagine that you were playing a video poker game for a long time and were graphing your wins and losses along a horizontal line. If you were playing a high-volatility video poker game, that chart would look like a series of high mountains and deep valleys, going way above and way below the horizontal line many times.

A video poker game with low volatility would have a chart that looked quite different. For the most part, the line showing winning and losing would stay very close to the horizontal line. It would have fewer undulations and they would be much less severe.

In other words, volatility measures how much of a swing between wins and losses you can expect from a typical video poker game.

It is an average calculation, just like payback percentage, meaning that it might not be predictive with a small sample size. But the longer you play the game, the more an online video poker game will adhere to its expected volatility level.

How Volatility Is Calculated

Volatility is calculated in the same way as payback percentage, in that it takes into account your chances of making winning hands and the payback attached to those hands. It’s just that it’s a little bit harder to interpret the results.

With payback percentage, you know that you’re looking at a figure based on a 100 percent baseline. Different sources measure volatility in different ways, sometimes as stand-alone numbers and sometimes in relation to other video poker games.

Luckily, it’s relatively easy to get a rough measure of volatility on your own. Let’s take a look at two popular pay tables found in the online video poker world. First up is Jacks or Better:

Jacks or Better

Coins/Hands 1 Coin 2 Coins 3 Coins 4 Coins 5 Coins
Royal flush 250 500 750 1000 4000
Straight flush 50 100 150 200 250
4 of a kind 25 50 75 100 125
Full house 6 12 18 24 30
Flush 6 12 18 24 30
Straight 4 8 12 16 20
3 of a kind 3 6 9 12 15
2 pairs 2 4 6 8 10
Jacks or better 1 2 3 4 5

Now let’s take a look at a pay table for the common game known as Triple Double Bonus

Triple Double Bonus

Hand/Coins 1 Coin 2 Coins 3 Coins 4 Coins 5 Coins
Royal flush 200 400 600 800 4000
Straight flush 50 100 150 200 250
4 of a kind – aces 2, 3, 4 kicker 800 1600 2400 3200 4000
4 of a kind – 2s, 3s, or 4s A, 2, 3, or 4 kicker 400 800 1200 1600 2000
4 of a kind – aces 5s – Ks kicker 160 320 480 640 800
4 of a kind – 2s, 3s, or 4s 5s – Ks kicker 80 160 240 320 400
4 of a kind – any other 50 100 150 200 250
Full house 9 18 27 36 45
Flush 7 14 21 28 35
Straight 4 8 12 16 20
3 of a kind 2 4 6 8 10
2 Pairs 1 2 3 4 5
Pair of jacks + 1 2 3 4 5

Let’s take a look at the payback percentages for these two games:

  • Jacks or Better: 99.54 percent
  • Triple Double Bonus: 99.58 percent

As you can see, there is minimal difference between the two in terms of payback percentage. But the difference in volatility is drastic.

Notice that the Triple Double Bonus pay table features many more high-paying hands than the Jacks or Better game does. That means that overall payback for Triple Double Bonus is much more tied up in these high-paying hands than it is in Jacks or Better.

Check out the bottom of these pay tables. You’ll see that Jacks or Better pays off 3 to 1 for three of a kind and 2 to 1 for two pair. Compare that to Triple Double Bonus, which pays back 2 to 1 for three of a kind and even money for two pair.

These two hands will appear often during game play. They’ll prop up your bankroll much better during a session of Jacks or Better than they will when you’re playing Triple Double Bonus.

As a result, Triple Double Bonus is a much more volatile game. You’ll have more chances for high-paying hands that will send your bankroll skyward. But when those hands don’t appear, your bankroll will drop pretty quickly.

On the other hand, Jacks or Better will be more of a grind. You won’t have to worry about those damaging slumps as much. But you also won’t see too many opportunities for huge payback either.

How Volatility Affects Bankroll

Volatility is more of a short-term factor in online video poker. After all, the game will eventually get to its payback percentage, no matter what kind of a journey it takes to get there.

One caveat to this comes with high-volatility games and how they force you to adjust your bankroll. As we said above, high-volatility games are known for their drastic swings between wins and losses. The problem: If the losses are particularly steep and your bankroll is light, you could end up losing it all during a slump before your luck turns and the big winning hands come your way.

This is a phenomenon known as risk of ruin. The higher the volatility, the higher the risk of ruin.

As a result, you may have to adjust your bankroll if you’re going to take on a high-volatility online video poker game and want to get the most out of it. If you go in with a bankroll that’s robust enough, you should be able to withstand the rough patches.

If you’re more concerned about playing the game for a long time on a relatively small bankroll, you should stick with games like Jacks or Better which are low volatility. But if your goals are big winnings in a short period of time, you’re better off going with higher-volatility varieties of online video poker like Triple Double Bonus.

Conclusion

We hope that you now have the hang of both payback percentage and volatility as they pertain to online video poker at top gambling websites. Once you do understand these concepts, you’ll find that your play improves and you have more control over the action. And that, ultimately, translates to more winning.

Jim Beviglia

Jim Beviglia joined Gamblingsites.org as a staff writer in 2018, parlaying his years of freelance writing into contributions on a number of different topics. He handles the sport of horse racing for GamblingSites.org and the intersection between the worlds of cryptocurrency and online gambling in a weekly blog. For his full-time job, Jim handles the television and track announcing duties at a h ...

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