Why government won't help players

11 August 2013

By John Grochowski

QUESTION: I started going to casinos in 1986 and the federal threshold for making you sign a W-2G on jackpots was $1,200, just as it is now. Do you think the government will ever raise it to adjust for inflation? According to an inflation calculator I used, a dollar in 1986 is worth $2.13 now. Shouldn't the tax point be near $2,500? Has any casino group ever tried to get it raised?

Also, have the casinos tightened their machines in order to cover inflation? Case in point: The three quarters I put into a Double Diamond machine last week are worth less than the three I wagered 27 years ago in 1986. The casino cost of operations rises yearly yet the max bet stays the same. What do you think?

ANSWER: I doubt the government will raise the tax point. You're certainly correct that inflation means $1,200 today is worth less than half of its 1986 value. But with federal and state governments low on funds and high on debts, I just don't think fairness to gamblers on tax points is high on the agenda. I know of no movement to raise the W-2G threshold.

As for tightening machines, quarter slot machines pay about the same today as they did 20 years ago, and so do dollar machines, $5 machines and so on. However, the overall, casinowide payback percentages on slot machines have fallen. That's because play has shifted into low-denomination video games, especially penny slots. Penny games have lower paybacks than quarter three-reel games, and since pennies are by far the most numerous games in casinos today, they make a huge impact on the average slot payback.

Video poker is a different matter. When I started playing in the late 1980s, high-payers including 9-6 Jacks or Better, 8-5 Bonus Poker and full-pay Deuces Wild were common. You could find them in nearly every Las Vegas casino. Today, they can be difficult to find, and are non-existent in some markets. Without question, video poker paybacks have decreased in the timeframe you've described. But on slots, casinos have increased their revenue rates by changing the games people play rather than be decreasing paybacks on the old games.


QUESTION: Do you know if there is any way to calculate the virtual stops that have been entered by a slot machine programmer?

ANSWER: No, there is no way to calculate virtual stops, or to know what’s in the programming without inside information. You’d need a look at the game’s PAR sheet, and PAR sheets are not made available to the public.

On games with physical reels, virtual stops are used to make the reel behave as if it has more symbols and spaces than it really does. Given a reel with one jackpot symbol, two triple bars, three double bars and four single bars -- 10 symbols in all -- plus 10 blank spaces for a total of 20 positions on the reel, a programmer can make it behave as if it has dozens, hundreds or even thousands of stops instead.

If he wants a “virtual reel” with 128 stops instead of 20, he could map 128 random numbers so that only one corresponded to the top jackpot symbol, with different proportions of numbers assigned to other symbols and spaces. He could play with proportions so that instead of bars turning up in a 4:3 ratio compared to double bars as on the physical reel, it could be 5:3, or 2:1, or some other number.

And the proportions don’t have to be the same on each reel. If the top jackpot symbol is assigned only one number on each of three 128-stop virtual reels, the jackpot will turn up an average of once per 2,097,152 spins. Assign two numbers to the jackpot symbol on each reel, and that drops to once per 262,144 spins.

But if it’s a big jackpot game and the manufacturer wants the jackpot to be rarer than once per 262,144 but more common than once per 2,097,152, The programmer could assign one jackpot number on reel 1, one on reel 2, but four on reel 3. That would bring a jackpot an average of once per 524,288 spins.

There’s all kinds of flexibility in designing games with virtual reels, giving manufacturers the opportunity to offer players reel-spinners with different play experiences. But there’s no way for players to look at the game and do the calculations in reverse to discover just what the programmer has done.