An RTP of 87.5% means that, averaged over a very large number of spins, the game returns about A$87.50 in prizes for every A$100 staked. The gap of A$12.50 is the venue's margin, built into the maths of every reel spin. That figure is measured across millions of plays; it says nothing about what a single session will pay.
The practical effect is that a smaller return leaves less room for a bankroll to breathe. With medium volatility and 25 paylines, the usual mix of small and moderate wins will not push the return upward. A minimum bet of A$0.01 lets you stretch a balance across more spins, but the arithmetic of 87.5% still works against the player over time.