When it comes to casinos and gambling, there are two terms that define player bankroll management strategy, namely house edge and casino game volatility. While house edge refers to the advantage that a casino has over the player in a certain game, volatility determines how payouts on any given games are distributed, and will thus be the focus of this discussion.
There are some great examples of volatility in the game of European Roulette due to the fact that all of the payout rates of all the possible bets are the same, yet the volatility of the game can cause the outcomes of those bets to differ quite considerably.
For example, if you bet on red a total of 18 numbers on the roulette table will be winning numbers and 19 will lose, this means that there should not be too many winning or losing streaks on these bets as the odds are pretty evenly matched. However, if you compare these wagers to a straight up bet in European Roulette where only one number wins and the other 36 lose, your first thought would be that the odds are way worse with higher volatility but it is important to be aware of the fact that the payouts have been adjusted so the average house edge remains constant even with a much more volatile bet.
With this in mind, when placing this type of bet you would need to adjust your casino bankroll management strategy as this type of wager will be subject to more streaks that you will need to be able to endure in order to maximise your returns.
The basic premise here is that the higher the volatility of a game or bet, the more bankroll you will need to finance the bets you make. For sake of example, let's say you have a budget of $100 and make $1 low volatility bets, in order to maintain the same risk ratio, when placing higher volatility bets you would have to stick to the $.025 range for wagers. So it ultimately comes down to pairing the volatility of bets with your risk tolerance in a way that makes sense and still allows you to enjoy your game play.
If you're a slots fan and enjoy games with high volatility like progressive slots, you will find that these games offer fewer low to medium payouts along the way which means that you will have to adjust your coin/bet size downwards in order to ride out the so-called streaks, whereas with lower volatility slots you will be able to bet higher coin sizes and still enjoy a more balanced payout rate.
Overall, you will still run the same risk but lower volatility games ensure fewer swings which means you can bet more, have fun and still stand a good chance of winning on a limited budget.
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