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A Word on Payout Percentages

22 December 2010 by admin

When deciding which online casino to join, players consider a lot of things. They look at whether the casino is licensed and approved by a respected regulatory authority. That can be a government agency but doesn’t necessarily have to be. They look at which games the casino offers and whether they hold tournaments (and if they do, how often). Players look at the welcome bonus and other promotions and compare them to offers by other casinos. All of that is very important, but an equally important aspect to consider often goes overlooked: they payout percentages, also called the payout rate or rate of return.

MoneyThe payout percentage is exactly what it sounds like – the percentage of wagered money that the casino, on average, pays out to the players. For example, if an online casino has a payout rate of 94%, that means that on average, players will lose 6% of their wagered money to the house. The remaining 94% they will get back in winnings.

Not all online casinos are equal when it comes to payout rates. Some jurisdictions require an exact rate for a license to be awarded. Some jurisdictions only require the payout rate to fall within a certain range. As a rule, casinos want to find the right balance between profitability and keeping customers happy. If the payout rate is too low, they will make more money off of each wager, but the players won’t be happy and might stop playing there. If the payout rate is too high, players will be happier but the casino won’t make as much money.

demi-for-webTo make matters more complicated, some government regulators put a cap on the payout rate. The French government, for example, raised some eyebrows (and not in a good way) by capping the return rate at 85%. That cap is not beneficial to either the casino or the player because it is too low. Casino games that take 15% of your wagered money are not worth playing, at least as long as there are so many better options.

For example, a quick perusing of the Online Casino Suite homepage will show you the payout rates of the top online casinos. Though the payout rates fluctuate, they are currently all in the 94-96% range. The main reason they fluctuate is because the payout rate is an average. During a given time (usually one month), you take the total amount of money that was wagered on every game in the casino and the total amount of money that was paid out on every game. A simple long division equation then gives you the payout percentage.

If an online casino’s payout rate is exceptionally low, I would advise against playing there. If it’s high enough to entice you to play there, I advise finding the payout rate for the specific games you want to play. Sometimes similar games will have drastically different rates. Keep in mind that in skilled games like blackjack, the payout rate can be influenced by you and not just chance.

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