The Insider's Guide to RTP: Everything You Need to Ace Betting Economics!

Navigating the betting & iGaming industry can feel like being a mythbuster at times, especially when it comes to explaining the inner workings of concepts like RTP (Return to Player). It's a unique position—part educator, part strategist, and always an advocate for transparency. So, let's break down RTP, clear up some misconceptions, and see how this knowledge can benefit your current or future betting business.

RTP Explained #

Time for some gambling math. Let’s say a slot game has RTP of 96%—which is also NSoft's average. What that means is for every $100 wagered, the game is designed to return $96 to players over time. The remaining $4? That's the house edge, operator’s revenue from the game.

Remember, RTPs are long-haul averages, calculated over thousands or even millions of gaming sessions. Because of this global setting, some players might feel a game 'doesn't pay out,' not realizing that RTP reflects the overall, long-term payout behavior, not short-term individual experiences.

Now let's consider two slot games: I’m going to call them Slot A and Slot B (creative, I know). A has an RTP of 98%, while B has an RTP of 94%. At first glance, Slot A might seem like the hero, but plot twist: volatility.

Volatility, or as I like to call it, the game's temperament, dictates how winnings are distributed— not how much, but how often and in what size. Slot A, while generous, might be the steady type, offering more frequent but smaller payouts—a classic sign of lower volatility. Slot B, on the other hand, with its 94% RTP, might be playing hard to get, indicative of higher volatility.

Slot A might attract seasoned players looking for the best odds, while Slot B could appeal to those chasing bigger jackpots, often associated with lower return-to-player games. The key for operators is balancing this portfolio to cater to different player preferences while ensuring overall profitability.

The House Always Wins—Or Does It? #

Outside the industry bubble, a myth persists, as my colleague with nearly a decade in the sector, Jadranko Dragoje, points out in his Medium post: the belief that RTP hovers around the 20% mark, suggesting that operators pocket a whopping 80% of all bets.

This narrative couldn't be more off the mark. Players do win, and yes, the system is designed to allow for that. And in competitive markets free from heavy-handed regulation, the RTP for online sports or casino games averages around 95%. The house edge is much slimmer than many imagine.

Take Blackjack, for example, a staple in the casino world. With the right strategy, players can look forward to an RTP reaching up to 99% (quick brag - NSoft's upcoming Gold of Egypt will have a higher RTP than Blackjack). This leaves the house with a mere 1% edge. But don't be fooled—1% of a very large pie is still a hearty slice.

The Ripple Effect of Regulations #

RTP isn't just a number pulled out of thin air; it's significantly shaped by the regulatory landscape. Some countries impose high taxes right off the bat—taking a cut from bets before the outcome is even decided—pushing businesses to dial down RTPs to keep their margins healthy.

Then there are places where the RTP is capped low, under the assumption that lower RTP games are less likely to foster addiction. The logic? If wins are less frequent or smaller in size, the thrill or incentive to chase losses diminishes.

Yet, this approach also serves to puff up government revenues or protect state-owned monopolies, leading to scenarios where RTP might plummet to 75% or even 50%. It's a contentious strategy, leaving players at a disadvantage, and the debate on problem gambling, well, unresolved.

Is High RTP a Deal-Breaker? #

From my vantage point in the industry, a high RTP can be a draw, but it's not the be-all and end-all. Success is influenced by many things—game mechanics, quality animations, and the right theme, just to name a few.

The quest for that perfect mix of elements that keeps players coming back is ongoing, and let's be honest, effective marketing never hurts.

For players, RTP information should be a click away, right within the game rules or splashed across promotional pages. And in some jurisdictions, this transparency isn't just good practice—it's the law.

The Takeaway for Operators and Players Alike #

Our industry's narrative isn't just about chasing profits; it's about creating value and entertainment. While RTP is a critical metric, it's the combination of innovation, marketing, and player experience that ultimately defines our business success. And for the players tuning in, RTP is a tool, not a guarantee. It's there to guide you, to help you understand the dynamics of the games you enjoy. Play wisely, play responsibly.

Make sure to check out NSoft's online casino portfolio, designed for player satisfaction and business success. With competitive RTP rates and a diverse range of games, we're here to help your business grow. Reach out to us today!

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Marko Galić

Game Mathematician & Project Manager

Marko joined NSoft in 2020 with a Master's degree in Actuarial and Financial Mathematics from the University of Zagreb. His strong foundation in mathematics, economics, and law enables him to excel in game development by understanding its wider business implications.