Payout Ratio

What is Payout Ratio?

Payout ratio is the share of total stakes a game or operator pays back to players, usually expressed as a percentage. In sports betting the same words mean something different. A bookmaker's payout ratio is the share of stakes returned through the odds, and it is the mirror of the margin. A market priced with a 5 percent margin has a payout ratio of about 95 percent. Divide 100 by the sum of the implied probabilities to get it. A two way market at 1.90 and 1.90 implies 105.3 percent, so the payout ratio is 100 divided by 105.3, which is 95 percent.

Why it matters

It is the figure operators report in financial statements and the figure games report as RTP. The two are calculated the same way but cover very different populations.

Example

100,000 euro staked and 96,000 euro returned is a payout ratio of 96 percent.

Common misunderstandings

  • Payout ratio at game level is another name for RTP. At operator level it is a reported financial figure covering all games and all players and tells you nothing about a specific game.

Frequently asked questions

Is payout ratio the same as RTP?

At game level, yes. At operator level it is an aggregate across every game and every player, so it cannot be used to judge one slot.

Where is an operator payout ratio published?

Where it is published at all it appears in annual reports or investor disclosures. Regulators publish game level RTP rules rather than per operator payout ratios.

What does payout ratio mean in betting?

The share of stakes a bookmaker returns through its odds. It is 100 divided by the sum of the implied probabilities of the market. A 95 percent payout ratio means a 5 percent margin.

Related terms

Browse the full gambling glossary