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18 October 2001

Dear Sir:

If slot machines are random devices, how does the casino guarentee its 90% payout/10% house take without adjusting the amount of payout with time, rendering it no longer a random device. Compounding this problem, how does the casino adjust for 2400 machines with different amounts of playing spins, come out with an average of 90% payout for the casino, especially if each machine has a different payout rate? Please advise how this is done, without correcting the randonness to effect its payout rate.

Thank you,
Ernest

Dear Ernest,

It certainly seems like the machines can't be random, but they are. Let me illustrate with a different game.

Suppose I have a basket that contains 100 ping pong balls. Eighty ping pong balls are white, 15 are blue, and five are red. You draw a ball at random from the basket, record the color, and put it back in the basket.

If you repeat this enough times, you will find that 80% of the time you drew a red ball, 15% of the time you drew a blue ball, and 5% of the time you drew a red ball. Even though you drew the balls completely at random, the distribution of colors you recorded will match the distribution of colors in the total population of ping pong balls in the basket.

Now let's make the game more interesting. You have to pay me \$1 each time you want to draw. When you draw a white ball, I keep the dollar. When you draw a blue ball, I return your dollar. And when you draw a red ball, I pay you \$16. Looking at this game from my perspective, I have a 15% chance of paying you \$1 and a 5% chance of paying you \$16. On the average, then, for every \$100 you give me so you can play, I will return \$95 to you.

My game is just like a 95% payback slot machine. Even though the outcomes in both games are chosen completely at random, each pays back 95% of the money played in the long run.

Even though it sounds like random should mean completely unpredictable, the only thing we can't predict is what color ping pong ball you'll draw next or what symbols will appear on the payline next. Because we know the distribution of ping pong balls in our basket and the casino knows the distribution of symbols on the slot machine's reels, we can predict -- no, more than predict, we can calculate with near certainty -- how much our game and how much a slot machine will pay back in the long run.

The only reason we can't be dead certain of the payback percentages is because each outcome in each game is chosen at random. But given enough draws or spins, our game and a 95% payback slot machine will both pay back very, very, very close to 95%.

If you've seen the payback numbers printed in Casino Player and Strictly Slots, you've seen that the paybacks for a casino change a little from month to month. Each machine paid back whatever it paid back during the reporting period and the casino reports the total percentage paid back to the players.

To sum up, there's no attempt to correct a machine to a particular payback percentage or to force a group of machines to a particular percentage. The casino isn't even really guaranteed a certain hold from each machine. (In fact, there are calculations the casino can make to see if the actual payback from a machine falls within the expected range.) The machines pay back in the long run a percentage very close to their programmed payback percentage because the machines get so much play.

Best of luck in and out of the casinos,
John

Dear John:

Thank you for your excellent response on my question about payout percentages. However, it now opens up the question about progressive slots. The explanation is great, but does not appear to apply to the progressive. How does this differ in determining the frequency of payout from the normal vs. progressive on the same machine?

Thanks,
Ernest

Dear Ernest,

The hit frequency (frequency of payout) of a machine is not affected by whether or not it is a progressive. The only thing that affects hit frequency is how many times each symbol appears on each virtual reel in the computer program running the slot machine.

The situation with the long-term payback of a stand-alone progressive machine is more interesting.

The long-term payback on a progressive machine doesn't change with the value of the progressive from the casino's perspective. Consider a 95% payback machine. The casino could take a small percentage, say 0.5%, of the money played through it and add it to the top jackpot instead of putting it in its pockets. That 95% machine is now a 95.5% machine from the casino's perspective. And that's the way the software in many progressive machines works. The casino can program it to take a certain percentage of the money played through a machine and it to the top jackpot, effectively reducing the casino's hold by that percentage.

The bottom line is that the money going into a machine can only go to one of two places: the players' pockets or the casino's pockets.

Best of luck in and out of the casinos,
John

Send your slot and video poker questions to John Robison, Slot Expert, at slotexpert@home.com.

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John Robison

John Robison is an expert on slot machines and how to play them. John is a slot and video poker columnist and has written for many of gaming’s leading publications. He holds a master's degree in computer science from the prestigious Stevens Institute of Technology.

You may hear John give his slot and video poker tips live on The Good Times Show, hosted by Rudi Schiffer and Mike Schiffer, which is broadcast from Memphis on KXIQ 1180AM Friday afternoon from from 2PM to 5PM Central Time. John is on the show from 4:30 to 5. You can listen to archives of the show on the web anytime.

#### Books by John Robison:

The Slot Expert's Guide to Playing Slots
John Robison
John Robison is an expert on slot machines and how to play them. John is a slot and video poker columnist and has written for many of gaming’s leading publications. He holds a master's degree in computer science from the prestigious Stevens Institute of Technology.

You may hear John give his slot and video poker tips live on The Good Times Show, hosted by Rudi Schiffer and Mike Schiffer, which is broadcast from Memphis on KXIQ 1180AM Friday afternoon from from 2PM to 5PM Central Time. John is on the show from 4:30 to 5. You can listen to archives of the show on the web anytime.

#### Books by John Robison:

The Slot Expert's Guide to Playing Slots