Payback, return, variance, and volatility explained

23 August 2025

By Jerry Stickman

Two factors determine the winning characteristics of a video poker game – payback (also called return) and variance (also called volatility).

Payback (or return) is the amount of money that is “paid back” or “returned” from the money that is played through a video poker game. It is expressed as a percentage such as 99.54 percent. Playing a game that has a 99.54 percent return means that in the long run you will get back $99.54 for every $100 you bet on the game. On a dollar game where you play five dollars per hand, after each 20 hands are played you will have an average of $99.54 left.

House edge is another way to express a game’s profitability (or more often, unprofitability). The house edge is what the casino keeps from your video poker play. The house edge is the difference between what the player bets on the game and what the game returns. For this example, the house edge is $100 minus $99.54 equals 46 cents which is .46 percent.

Notice how low that house edge is. This is the actual return and house edge for the full-pay version of Jacks or Better video poker. While this game is becoming scarcer over time, some can still be found. Even though returns of this and other video poker games have been degraded, video poker generally has higher returns than standard slot machines. That is why video poker is so popular.

Of course, not all video poker returns are as high as 99+ percent. Some go as low as 96 percent and in some cases, even lower. However, some returns are higher – even more than 100 percent! A player must know how to find the good games and avoid the bad games. Fortunately, this information is readily available in magazines, in books, and online.

All returns are based on an infinite number of hands. Playing a full-pay jacks or better game, after 20 hands on a dollar game playing five dollars per hand, I guarantee you will NOT have $99.54. You will have $100, or $105, or $85, or any multiple of five dollars, since that is what the hands pay. You will have ups and downs as you play. But after thousands and thousands of hands, the average return will be very close to $99.54 for every $100 bet on this game.

The swings in bankroll are called volatility or variance. Volatility is a generic term which refers to how much the bankroll varies. Variance is a mathematical term that puts a number on the volatility. The variance of video poker games runs from a low of about 12-15 to a high of nearly 200 – an possibly higher.

What difference does volatility make to the video poker player? It could be huge. Higher volatility causes more severe bankroll swings – both up and down.

High volatility games have more high paying winning hands on their pay tables. To compensate for the larger concentration of the return in those higher-paying but less frequent hands, the amount of the return from lower paying hands must be reduced. This means you may hit more frequent high-paying hands, but when you do not, the lower paying hands drain your bankroll more quickly.

If you are lucky and hit a high-paying hand early, you have plenty of money to continue playing. What if you don’t hit any high-paying hand early on? In a high volatility game, the player loses much faster than on a low volatility game. So, the bankroll must have enough cash to ride through the more severe losing streaks.

Be aware that multiple, high-paying hands on a game come with a price. That price is more severe losing streaks and a correspondingly higher bankroll requirement.

It helps to be aware of the traits of the video poker games you are playing. I like to play games with high returns and low volatility. If this type of game is too tame for you, be aware you will need a larger bankroll to play more exciting games. Just make sure to look for games with higher returns.
As always, may all your wins be swift and large, and your losses be slow and tiny.

Jerry “Stickman”

Jerry “Stickman” is an expert in craps, blackjack and video poker and advantage slot machine play. He is a regular contributor to top gaming magazines and 888casino.com. He authored the video poker section of Everything Casino Poker: Get the Edge at Video Poker, Texas Hold'em, Omaha Hi-Lo, and Pai Gow Poker! You can contact Jerry “Stickman” at stickmanjerryg@gmail.com