Payouts and 'Gambler's Ruin'

Payout percentages

Quite unsurprisingly, this term must be familiar to most of you. To start of with, one needs to define precisely what we mean by payout percentages'. Its most common definition is: the total amount won by all online casino players in a given month's time, compared to the total amounts of bets made at the online casino in the same time period.

One of the most important factors to consider when looking for an online casino is the payout percentage (also known as payback percentage) available. This number represents the total percent of wagered money won by the players, over a certain period of time. For example: if a casino has 98% payout for January, this means that during that month, 98% of all the money wagered at the casino was paid back to bettors as winnings, on average. The house always maintains an edge, meaning that in the long run, the casino will win more money than it pays out. But exactly how big is that edge? That is the first question you should ask yourself before placing a bet. Smaller house edge means bigger payouts, and more money for you. Placing bets with a bigger payout percentage is, therefore, a smarter way to bet.

Payout percentages are a valuable indicator to you: it will not only tell you how much you are able to win, it also indicates you how fair the casino is. For example, a 97% payout percentage implies that 97% of all the money that was bet at the casino will translate in winning money. The remaining 3% of the money constitutes margin of profit of the casino. Payout percentages vary according to casinos and games. Usually, card games (Poker, Blackjack) have the highest payout. Table games (Baccarat, Roulette) are second in line, while slots have the lowest payout.

Note: The casinos we flag up as 'TOP-rated' all offer some of the highest payout percentages available online. In fact, their payouts are so high that they comfortably rank alongside those of the most famous casinos in the world, even in Vegas. These facts are supported by monthly reports, themselves conducted by established and well-known accountancy firms confirming the validity of these claims.

To give you an overview of what we understand by payout percentages, here are the average payout percentages of online casinos over the last 5 years for a selection of different games. For a list of the payout percentages of the casinos profiled on our site, check out our rankings page devoted to casino payouts here .

Gambler's Ruin

An important concept to bear in mind related to payout percentages, is what is commonly known as gambler's ruin'. To put it simply, when a gambler has lost the last of his bank of gambling money and can no longer go on gambling, he has reachedgambler's ruin'. Does it sound simple enough? In fact it is slightly more complex, especially in terms of percentage calculations.

All in all, all casino games in the world have a slight house advantage. This is best explained by the amount of money each casino expects to keep from each game played on a long-term period. However, by playing longer, the player will stand a higher chance to reach theedge' of the house. The example below expresses this more clearly:

Let's imagine a situation where the house advantage on a particular game is placed at 1%, and a player starts off with a bankroll of $100. In the event that the gambler never bets any of his accumulated winnings, theoretically he can expect to take home $99 of his original 100. On a speculative basis, should he continue to gamble and use his winnings, at this point -$99, he would lose 1% on average for the rest of the games he will play, and his winnings would go down to $98.01. This downfall 'will inevitably carry on until the player has no money left at all' - that is 'gambler's ruin'!

Skilled Games vs. Pure Luck

If you take a good look at the list of games in the table above, you will notice a very interesting statistic: games that involve more skill have a higher payout percentage. This should encourage players to choose games which allow some control over the outcome. For example, it is a well known fact that playing Blackjack while using card-counting techniques can eliminate the house advantage. Under certain conditions, a player may even gain an advantage over the casino using these techniques. You shouldn’t be surprised, therefore, to see Blackjack topping our payout list. Close at number two is Baccarat. Two out of three Baccarat variations involve skill, and one variation is extremely similar to Blackjack.

Before placing the first bet

Remember – in order to take full advantage of the high payouts a game offers, you must optimize your strategy. It’s not enough to take a seat at a Blackjack table and expect to hit 21 with every hand. Using optimal strategy greatly improves your odds, and cuts the house edge. The same is true regarding games that are not considered ‘skilled games’. No matter what game you’re playing, there are choices to be made before placing the first bet, and these choices can greatly affect the payout percentage you can expect. For example, before playing Roulette, you should choose the European wheel and avoid the American wheel. European wheels only feature one “zero” slot, and therefore have a higher payout and better odds for the players. The same holds true with slot machines – you should look for slots that boast a higher payout percentage, as well as a bigger jackpot. Casino operators regularly advertise the payout percentage for each slot machine.