Variance in Gambling: What It Means

Variance in gambling is an uncommon yet important topic of discussion among professional gamblers. After all, your “variance” can dictate whether or not you are a successful gambler.

Variance in gambling is the evaluation of your actual win rate against your expected win rate and can help you to better understand how and when you should play. Keep reading to learn everything you need to know about variance in gambling.

What Is Variance in Gambling?

In essence, variance is the comparison of your average win rate against your current win rate. And professional gamblers use it to evaluate the viability of new and long-term strategies in their play.

For example, a professional poker player may find that when he or she plays 100 hands in a night, they normally win about 30 of them, or 30%. However, on the current night, even though they’ve only played 50 hands, they’ve already lost 40, giving them a win rate of 20%. This 10% difference, the difference between their normal win rate and their current win rate, is variance.

**Please note that variance measurements can only be taken with large sample sizes. With smaller sample sizes, there is no way to measure true variance.

Why Does Variance Matter?

Variance is usually only important for professional gamblers, though it is important to be aware of it in general. Professional gamblers use variance to gauge the effectiveness of a new or current strategy.

Most often, variance is used by professional poker players, who spend at least one day a week playing. They will measure their variance as they test out certain strategies like their bluffing, and if their variance is too far off from what it normally is, they may leave early or switch poker rooms.

Variance is important to these gamblers as it can notify them of when they are having an “off” day, or when something new they are trying isn’t working. While not all professional gamblers measure variance (because, in some less skill-based games, the variance is higher anyway), many do, especially when they are thinking of changing up the way they play.

It’s important to keep in mind that luck is still a huge aspect of any sort of gambling, and that natural variance will happen from time to time, especially when playing slot machines or keno. That being said, variance can also be a tool for professional players and should not be negated.

How Should Professional Gamblers Use Variance?

1. As a Guide

The uses of variance will differ widely depending on your gambling game of choice. For sports bettors, understanding variance is an important aspect of placing better bets.

Variance is normal in sports betting, but understanding why something has a high or low variance can help you better understand your odds of winning. In fact, many professional sports bettors spend hours combing spreads and variances looking for one that will bring them the big win.

Additionally, other professional players will know the variance of their favorite game, and if they find their results far outside of the normal variance for that game, they can know whether or not they should play that game. Occasionally, casinos have been caught cheating players by operating outside of known variances.

Poker players specifically use variance as a guide when they bet size. More on this in our article about bet sizing.

2. As a Red Flag

For players of skill games in casinos, variance is most often used as a red flag for when they aren’t performing or playing as expected. As we mentioned before, all gamblers will experience variance at some point during their play; however, when they aren’t winning anywhere close to what they are used to winning, this can mean they are off their game or not playing with their usual effectiveness.

We also want to mention that casinos also measure variance of players, especially at blackjack tables. When the variance is too high, and they suspect cheating such as card counting, they will often escort that player off the floor and out of the casino.

3. As a Test

Professional gamblers have to adapt just like any other business, and as such, they will often invest in continually boosting their education and trying new strategies and tactics. When they try out a new tactic, they will use variance as a test.

They will compare how they play with the new strategy versus the old, using variance, and if the variance is too high in one direction or the other, they will either continue with the new tactic or revert to the old one.

Do Casinos Post Their Expected Variance?

In general, expected variances (or EV) are not posted by casinos. This is because in games where variance matters, there is also a large amount of skill involved—meaning the expected variance is different from player to player.

That being said, casinos do have to have their RTP (return-to-player) available somewhere for review by authorities, but it isn’t always regulated that customers get access as well. It never hurts to ask if you are curious, though.

How to Calculate Expected Variance?

Expected variance can be calculated using the formula found at this link.

What Casino Games Have the Least Variance?

While all casino games have variance, the ones least affected by it are those with limited outcomes. Examples include blackjack and roulette, as both are based on a finite number of outcomes and limited player input. These are also (generally) not considered to be skill games, though there is a small amount of skill involved in playing blackjack effectively. But again, because you can only come to the number 21 so many ways with a deck of cards, variance is limited.

Although some low-variance slot machines exist, we find the lowest-variance slot machines still tend to have more variance than roulette or blackjack. So, if you truly want to play at the lowest possible variance, stick with those games in the casino.