Ask the Slot Expert: Casinos don't want truly random results?

While researching last week's column about Random Number Generators (RNG), I read this statement about casinos and true RNGs (TRNG):

One reason I can think of not using a TRNG is that it won’t allow the casinos to earn profit. The current algorithms are designed so that the casinos always end up earning profit (in long term).

Wha????? Casinos can't earn money from a truly random game?

Has this poster ever seen a Roulette wheel? Casinos take great pains to ensure that the results on their wheels are not biased and that each pocket has the same probability of having the ball land in it. Casinos wouldn't still be running Roulette games if they weren't making money on them.

The statement comes from Hacking Slot Machines by Reverse-Engineering the Random Number Generators, a blog post on Bruce Schneier's Schneier on Security site. Other statements show that the posters aren't familiar with how slot machines actually operate and maybe even Random Sampling with Replacement.

Slot machines and other casino devices are NOT random nor even pseudo random, their numbers generators are specifically designed to rook money from the rubes, marks, and suckers such that a pre-determined percentage of the money that the marks insert in to the machines goes toward the House, and gambling oversight agencies set upper limits on the percentage that gambling houses take from the marks.

The pseudo-random numbers for such machines determine the output display which the marks see, they do NOT determine when the machine will pay out, not over time, that’s hard-set in the devices.

No, the RNG has nothing to do with how much machines pay back. Payback is determined by how frequently combinations hit and how much they pay. The rest of the first paragraph is okay. As for the second paragraph, I don't know how it's possible for the numbers to "determine the output display" and also not "when the machine will pay out." Doesn't the combination displayed on the output determine how much is paid on the play? Finally, I don't know what is "hard-set in the devices" that determines when the machine will pay out. We might get a hint, though, from the next quote.

I would imagine that the PRNG algorithms in use are very heavily vetted to ensure that they are random enough, but also predictable enough that the machine is going to pay out at a very precisely determined rate....True randomness could have the machine paying out at above its stated range – the companies making these machines and the companies deploying them don’t want them to be properly random, they want it to be very predictable and in their favour.

Note the English spelling of the last word. We always have to keep in mind where someone who posts a message is from. The information in their posts may be accurate for their jurisdiction, but not for ours.

the primary requirment at any point in time with gambling machines is that they “are and remain ahead” not that they will be ahead at some future point in time.

That is they must never make a payout if they do not have the money to pay out as well as the running cost and house mark up. It’s why if you have a win you should walk away, as there will not be a payout until the machine is sufficiently ahead again.

The software in England's machines contains a governor function to keep the short-term payback on a machine in a defined range, narrower than it would be without the governor function. Machines in the U.S. do not have that function. Over the short term, machines can be incredibly generous or cheap. In the long term, though, the magic of Random Sampling with Replacement ensures that machines' paybacks get closer and closer to that determined by their reel layouts and paytables.

I once attended a seminar given by one of the casino execs who worked with Bally's to develop the Blazing 7s game. He said it was very popular -- and profitable -- in his casino. One of his colleagues, inspired by the success in the first casino, installed the machines in his casino too. The machines were popular and profitable -- for the players!

The second guy told the first guy that he was getting killed by the machines. The machines were hitting combinations of 7s right and left. The first guy said to be patient. Sure enough, that initial wave of generosity became a smaller and smaller piece of the machines' overall performance. They were profitable in the second casino too.

My friend's experience with Blazing 7s matches that of the second casino operator. He was playing Blazing 7s one afternoon and everyone playing them was making a good profit. The next day, he told his wife that they had to go back and play the machines again. This time none of the machine in the bank were hitting.

If the odds were truly random there would be no way to vet the results because there would be no way to verify the payouts. In this sense a slot machine is different than a public lottery. A public lottery only cares if the results are truly random because the lottery can never pay out more than what was put in. But the casino can pay out more than what was put in, and thereby go bankrupt, if the payouts aren’t managed properly.

Regulations require that each machine maintains a record of 10 or so of the last plays on it. I saw this demonstrated on a video poker machine. The display showed the cards that were dealt, the cards that were discarded, the replacement cards, and how much the play paid. Addressing the last sentence, Random Sampling with Replacement ensures that machines do not pay out more than what was put in them in the long run.

I think everyone is missing the point. Slot machine payouts are not designed to be random.

They are designed to be addictive. Use your google-fu on “intermittent reinforcement”.

The idea is to pay out just enough, and just often enough, to keep the player at the machine – the longer the better for casino profits.

Those occasional payouts give the gambler a nice but too-brief spike in dopamine. Just the thing to foster an addiction. The susceptible gambler wants more … and more … and chases a dopamine-mediated high with more and more losses.

The payouts are deliberately non-random in order to milk the gambling herd. A truly random payout would result in less addictive behavior and lower profits.

But because the payouts are non-random, they are exploitable in theory. A slot machine gang could try to hack the algorithm responsible for the intermittent, addictive reinforcement, by trying to predict when the machine is due to reinforce the player.

This has little to do with the design of any underlying RNG in the slot machine h/w [hardware] or s/w [software].

A machine with a truly random RNG would be just as addictive as one with a pseudo-random RNG (PRNG). The intermittent reward is a result of the reel layout, not the RNG.

Referring to the what the slot machine gang did, they didn't try to predict when the machine was due to "reinforce the player." Not exactly, at least. They tried to predict when the values from the RNG were favorable for the player. There is no algorithm responsible for "intermittent, addictive reinforcement."

I can agree with the last sentence.

One poster worked for slot manufacturers and tried to correct what others posted. Here's the reply to the message above:

We were trying for both. [random and addictive] That said, they’re two separate problems. The first is implementing a PRNG well. The second is game design.

Some more quotes from this poster.

I can tell you from the data I had that there were weeks where some of our most popular games lost money (due to large progressive payouts occurring on those weeks). When averaged over a year, though, those numbers looked very close to what you’d expect from the payout table.

Other than in a dispute situation, the casino/lottery doesn’t care about the individual pays – they care about he collective ones, over a day, a week, a month, or even a year. If a 92% payout game is paying out at, say, 101% (with a large umber of plays) over a week, they’re going to ask why. If it keeps doing so, or no good explanation comes up, they’ll shut that game down.

If you would like to see more non-smoking areas on slot floors in Las Vegas, please sign my petition on change.org.