Live Casino Game Volatility – Explanation and Examples

Volatility, often also called variance, refers to the ratio of risk and reward for a given bet. Broadly speaking, a more volatile bet is less likely to win but pays a higher reward when it does. Conversely, less volatile bets win often but don’t pay much compared to the initial stake.

That’s the simplest definition of volatility, but it’s not strictly applicable to every bet and game out there. For example, in some types of gambling such as slot machines, variance can refer to how payouts are “spread out”. For instance, some slots win often, but most payouts give back only a small fraction of the initial stake while also having a small chance to win a huge amount. That’s still a highly volatile bet. This same principle can be seen in other forms of gambling such as roulette – more on that later.

You can see how the term can get confusing. After all, it originally comes from finance, where it refers to the potential risks of an investment. That’s why we’ll focus on table games. Specifically, we’ll only look at different types of live casino games. Of course, we won’t break down every game out there – that would be way above the scope of this short guide. However, we’ll dive into a few classics and popular options. That should at least give you an idea of how volatility affects different casino games.

Also, we should point out that the term Return-to-Player is closely related to variance. Although related, though, the two concepts are crucially different. We suggest reading our guide to RTP in live casino games to get the full picture of the statistics behind your favourite betting games.

Example: Volatility in Roulette

We chose roulette as an example for a few reasons. First of all, it’s immensely popular, and most players have at least some idea of how it works. If not, start with our beginner’s guide to roulette. Secondly, it’s simple, and the odds of roulette are very easy to grasp.

Most importantly, though, the main difference between different bets in roulette is precisely in how volatile they are.

For example, let’s look at even money wagers such as Red, Black, Odd, or Even. These bets have just under a 50% chance of winning in any given round while doubling your money as a reward. They essentially cover almost half of the wheel, winning if any number on that half ends up as the result.

Although doubling your investment sounds appealing, it’s actually a very small prize in the world of online gambling. In fact, we’re fairly certain no table game offers a smaller reward than 1:1. Of course, they’re also the most likely bet to win out of all of the standard options. In other words, even money bets are the least volatile bets in the game of roulette.

On the other side of the spectrum, we have Straight-Up bets. As you probably know, these wagers cover only a single number and only win if the ball lands on that exact number. This means that a Straight-Up wager has a 1 in 36 chance to win, which translates to just 2.6%. That’s a very small chance to win, which is why the bet pays 35 times your stake for a successful prediction. Therefore, Straight-up bets are the most volatile option in standard roulette.

All of the other options are somewhere in between. As you probably gathered by now, the more numbers a bet covers, the less volatile it is.

Roulette Volatility Chart

Check out the table below for details on every roulette wager. They’re listed in order of most to least volatile.

Importantly, we have to point out that the chart only applies to European roulette. If you’re not quite sure what the difference between standard types of roulette is, check out this article.

Increasing Volatility With More Possible Outcomes

Remember how we said things are a bit more complicated than a simple ratio of probability vs. reward? It’s time to dive deeper into what we meant.

Highly volatile bets don’t necessarily have to be very unlikely to win. Sometimes, they just have a wide range of possible outcomes, where only some outcomes are highly favorable. 

To illustrate, we’ll stick close to our earlier example and take a look at one of the most popular live roulette tables ever released – Lightning Roulette.

Famously, Lightning Roulette introduces random multipliers that can occasionally significantly increase the reward of Straight-Up bets. However, it compensates by decreasing the payout of base, unmultiplied single-number bets to 29:1. Multiplied numbers can reward the player with up to a thousand times their stake, but such an outcome is extremely unlikely.

Consider the fact that your chances of winning a single-number prediction are just 2.6%. The chances of winning that bet, and getting a multiplier on that exact number, and getting lucky with a big multiplier are much, much lower. All of this means that Straight-Up bets in Lightning Roulette are extremely unpredictable, which means they’re highly volatile. 

Think of it this way. The outcomes of any single-number bet in this game are extremely varied. Hence, they have high variance.

This concept has been copied and emulated by many other titles because it adds a whole new level of excitement to the classic game.