What is Variance?
Variance is a mathematical term used in gambling to describe the degree of fluctuation in game results compared to their expected average outcome. It measures how widely individual results can differ from what is statistically expected over time.
How variance works
In gambling games, variance reflects the spread of possible outcomes rather than their long-term value. Even when a game has a fixed expected return, short-term results may vary significantly. Variance explains why results can differ greatly between short playing sessions, even under identical conditions.
Games with higher variance tend to produce less frequent wins with larger swings in results, while lower-variance games generate more consistent outcomes with smaller deviations from the average. Variance does not change the underlying probabilities of a game but describes how outcomes are distributed over time.
Variance in gambling
Variance is commonly used to analyze slots, table games, and betting scenarios. In slot games, variance is influenced by factors such as symbol distribution, payout structure, and feature design. In betting, variance explains why outcomes may differ from expected probabilities in the short term.
Understanding variance helps explain why extended play is often required for results to align more closely with theoretical expectations. Short-term outcomes can appear unpredictable, even in mathematically well-defined games.
Variance and risk perception
Variance affects how players perceive risk and consistency. High variance increases the likelihood of extreme outcomes over shorter periods, while low variance creates a more stable experience with smaller fluctuations.
Although variance influences the range of outcomes, it does not affect the long-term mathematical expectation of a game. All games remain governed by their underlying probabilities and rules.
Frequently Asked Questions
What does variance mean in gambling?
Variance describes how much actual results can fluctuate compared to the expected average outcome.
Is variance the same as volatility?
Variance and volatility are closely related concepts, but volatility is often used as a player-facing term derived from variance.
Does variance affect long-term results?
No, variance does not change long-term expected value, only short-term result distribution.
Why can outcomes differ from expectations in the short term?
Short-term results vary due to natural statistical fluctuation explained by variance.
Is variance relevant in crypto gambling?
Yes, variance applies equally to crypto gambling games, including provably fair systems.
Can players control variance?
Players cannot control variance, as it is defined by the game’s mathematical structure.