Part III: Business & Regulation · Gambling Mathematics & Probability

20. Confidence Interval

Foundational Probability

A confidence interval is a statistical range within which the true value of a parameter (such as a game’s actual RTP) is expected to fall with a specified level of confidence, typically 95%. Gaming regulators use confidence intervals to determine whether a game’s actual performance over an operational period is consistent with its theoretical design. For example, if a slot machine has a theoretical RTP of 92%, regulators might set acceptable bounds of 90% to 94% based on the confidence interval calculated from the game’s volatility and the number of plays recorded. Results falling outside the confidence interval trigger investigations into potential game malfunction, tampering, or statistical anomaly.

In practice

The width of a confidence interval decreases as the sample size increases (more plays = narrower interval). A 95% confidence interval uses a z-score of approximately 1.96. Formula: CI = Mean +/- (z-score x Standard Error).

One entry from the Casino Industry Glossary — 1,157 terms written for surveillance, compliance and operations professionals rather than for players. Definitions describe industry usage; where a term carries a regulatory meaning, verify against the instrument that governs your jurisdiction.