The payback puzzle

9 February 2017

By John Grochowski

QUESTION: Have the casinos reduced the payout percentages on their higher denomination machines, up to $1, or reduced the number of higher pays in the programs so the higher denomination machines payouts are very similar to the penny machines?

Has gaming changed to such an extent that one must pay the $25 and up slots to have any chance of a sizable win?

ANSWER: Payback percentages remain higher on higher denomination slots, just as they have done for decades. For a quick snapshot, I looked at Strictly Slots magazine’s Loosest Slots of 2016 issue last April.

It showed dollar slots in Downtown Las Vegas paying 95.2% compared to penny slots at 87.5%, while the Las Vegas Strip was paying 91.5% on dollars vs. 88.7% on pennies.

Not all jurisdictions broke down their reports by machine denomination, and the issue did not have denomination figures for Atlantic City, for instance. But in those that released such figures, the story was the same everywhere. The two Connecticut casinos paid 93.4% and 93.3% on dollars vs. 89.6% and 89.2% on pennies. Illinois’ 10 casinos showed a range from 91.1% to 95.2% on dollars vs 87.0% to 88.9% on pennies.

That’s largely the same situation as existed a decade ago in the same jurisdictions. A look at the October 2007 issue of Strictly Slots’ sister publication, Casino Player, randomly pulled from a stack, shows dollar vs. penny paybacks of 96.3% vs. 89.9% in Las Vegas Downtown, 94.1% vs. 89.2% on the Strip. In Connecticut, it was 92.5% and 92.8% on dollars vs. 88.2% at both casinos, and the Illinois ranges were from 91.6% to 95.9% on dollars vs. 85.0% to 90.9% on pennies.

There’s been some erosion of dollar paybacks on the Strip, but elsewhere the 2016 payoffs look very similar to those of 2007.

Keep in mind that few players are making those $3, $4 and $5 max bets on penny slots. A large percentage of players bet one or two coins per line. And it does take a different mindset to play video slots than three-reel slots. A large percentage of your return – up to 40% on some games – comes from bonus events. You will get fewer and smaller jackpots on the man reels.

Even though you can bet as much money on penny games as on dollars, the dollar games still have higher payback percentages. That’s mostly because there is no lack of players at the penny games. Players are happy with the entertainment video slots offer. They make fewer bets per hour because bonus events take up some of the time and the overall experience keeps players coming back.

But no, slot makers and casinos have not reduced paybacks on high-denomination slots to bring them in line with the low-denom video games.

QUESTION: Is there any advantage to short playing sessions in blackjack, as opposed to one longer session?

ANSWER: For an average player, no, there is no advantage in terms of the house edge. It doesn’t matter whether you play one four-hour session four one-hour sessions. The house edge remains the same.

The one advantage for shorter sessions is the fatigue factor. Players tend to make more mistakes when playing tired. Take a break when you start to feel fatigued.

The situation is different for advantage players. Card counters like to work in short sessions because it makes their methods harder for security to spot.