True Paybacks of Slots

11 January 2020

By John Marchel

With most casino games the odds against the player are generally fixed. An interesting phenomenon with slots is that the odds do change. The odds change depending on the denomination of the bet. Playing at a higher wager level in any other game like blackjack, craps, or roulette makes no difference in the odds, but it does at slots!

It is a fact the 25¢ machines payout more than the 5¢ ones. Dollar slots pay more than the 25¢ machines and $5 machines have even higher payout rates. Management knows that each machine requires a given amount to operate it. Every machine takes up the same amount of floor space. They all require the services of a mechanic and sometimes a change person.

If the casino takes in more money on the dollar machine then on the 5¢ ones, they can afford to be more generous with their payoffs. And they are. All the data obtained shows that the higher the denomination, the higher the payout. One recent report gave the following rates:

1¢ payout = 88.4%
5¢ payouts = 89.4%
25¢ payouts = 90.6%
$1 payouts = 92.4%
$5 payouts = 98.4%

In the state of Nevada, the Gaming Commission requires slot machines to pay out a minimum of 75 percent. In Atlantic City, the New Jersey Casino Control Commission directs slots to payout at least 83 percent. However, the actual payback percentages for those particular states are much higher. In New Jersey it’s about 91 percent, and in Nevada it’s on the order of 95 percent. This means that on average for every $1 you play at slots in Atlantic City you’ll lose 9¢ and in Las Vegas you’ll lose 5¢. Other states and countries set their own standards for machine payouts.
Don’t think this will be the result every time you play a machine. The numbers are usually based on an annual return.

Another way of saying it is the machine, by law, is required to return at least an amount (75% in Nevada, 83% in Atlantic City) of what was put into it over a given period of time. When the machine is programmed at the manufacture (75% to 98%) it must be set to return at least that much.
It’s important to recognize the value of playing a high 98-percent machine verses, say, a lower 93-percent one. As an illustration consider this.

You start to play a 98-percent machine with $100 and after cycling the entire amount you get $98 in return (in theory). You put in $98 and get back $96 and so on until after 20 pulls you end up with $60. When we look at the 93-percent machine, it’s considerably different. We again start at $100 and this time we get back $93, then put in $93 and get back $86 and so on until after only 14 rounds we end up with only $2. That 5-percent difference between the two machines can be a very big difference.

You always want to play on machines with the highest return rate possible.

Where would you find high-payout machines? The best-paying slots can be found in the most competitive gambling areas like Nevada, Atlantic City, Mississippi, Colorado, and Midwest non-Native American casinos. You won’t find low 90-percent payout slots in casinos with lots of competition. Those casinos want all the customers they can get; therefore, they will have high payouts on a lot of machines. You should forget about most casinos located in isolated areas (California) and on cruise ships. You can expect low returns in those specific places.

Today, you can go on the Internet and find lots of information on slot returns organized by state. There are also newsletters and monthly magazines that list what the slot machine payout percentages are by state, areas, and in some cases individual casinos. My advice is to obtain this valuable information and use it when considering where you want to play slots.

BET YOU DIDN’T KNOW

• It’s been reported there is one slot machine in Las Vegas for every eight inhabitants.

• Early American slots were first known as Coin-in-the-slot-machine.

• The whole Racino boom (gambling at racetracks) occurred in 1992 in the unlikely location of Lincoln, Rhode Island, a small town known mostly for its greyhound racing facility, Lincoln Park. The state, reacting to Foxwoods casino in Connecticut, allowed 400 slot machines at Lincoln Park as well as 400 at the Jai Alai fronton in Newport.

• At last count, 40 states have some form of legalized electronic gaming devices, including traditional slot machines, video poker and bingo, total U.S. machines 878,871.

• Nevada legalized the “new” mechanical slot machines in 1905, but it had a proviso that they not be visible from the street. There was also a quarterly license fee of $20 per machine.

• French casinos, which have always banned American-style slot machines, suddenly had a change of heart in 2006. The “bandits manchots,” as they call them, now account for 92 percent of all French casino business.

• Kirk Erickson, a student at Arkansas State University, hit a Megabucks slot machine in Caesar’s Palace in 1987. However, when it came time to payout the $1,061,812, Caesar’s refused since Kirk was only 19 years old. He took it to court and in 1989 a Nevada court denied the win.

• Slot Machines: When you rearrange the letters, they turn up to read: “Cash Lost in em”