Ask The Slot Expert (Payout Percentage Versus Payout Frequency)

Hello!

Could you shed some light on the payout percentage vs. payout frequency debate?

Also, is a high frequency, small top line average payout percentage machine best for slow but reasonably consistent profits?

Thank you,
Bill

Dear Bill,

I'm not familiar with the payout percentage versus payout frequency debate, but I hope I can help anyway.

The payout percentage of a machine tells what percentage of the money played through it will be returned to the players in the long run. The key phrase in that definition is "in the long run." Since the result of each spin is chosen at random, it takes a while for a machine's actual performance to home in on its payout percentage. Some deviation from the machine's payout percentage is allowed and expected. And the deviation allowed gets smaller as the number of spins played on a machine increases.

The following table shows the deviations expected. The Expected Deviation column is a range because each slot machine is a little different.

The last column says that the actual payout percentage on a slot machine will be within 0.3 to 0.5 percentage points of its (theoretical) payout percentage after 10,000,000 spins.

The same numbers hold true for the players. Let's say you wanted to play a machine advertised as having a 97% payback. You would have to play 10,000,000 spins on that machine to be nearly certain that your payback would be between 96.5% and 97.5%. If you played only 1,000 spins on that same machine, I can be nearly certain that the machine would have paid back between 52% and 142% of the money you played through it.

The payout frequency, better known as hit frequency, of a machine tells the probability of getting a payout of any size on any spin. Hit frequencies can be as low as 5% and as high as nearly 100%.

Now, here's the rub. There's no relationship between payout percentage and hit frequency. High payback machines can have low hit frequencies, and vice versa.

As an extreme example, suppose there's a machine that has only one winning combination and the chances of hitting it are 1 out of 100. The hit frequency on this machine is an incredibly low 1%. But this one winning combination pays 99 coins, so the machine has a very high payout percentage of 99%.

There's no way you can find the high-paying machines by scouting the slot floor and looking for machines that are paying well. You find high hit frequency machines when you do that, not high payback machines. You would have to compare the paybacks on the machines after 100,000 spins to be fairly sure you've found the high-paying machines.

As I said before, high hit frequency does not imply high payback. Some low hit frequency machines, like RWB and Ten Times Pay, can have high payback percentages. I know one casino manager who orders higher payback percentages for his low hit frequency machines. He feels that players will think those machines are really tight because the hits are so few and far between.

High hit frequency machines give more play than low hit frequency machines for the same bankroll. I once had over 70 losing spins in a row on a low hit frequency machine. Low hit frequency machines can eat bankrolls very quickly.

So, which is more important: payout percentage or hit frequency? Over the long run, payout percentage is important and hit frequency is irrelevant. The long run is about 1,000,000 spins and you'll need a very large bankroll to see you through prolonged dry spells. Over the short run and with limited bankroll, hit frequency is more important. You'll get more play from your bankroll.

I like to get some play for my money, so I tend to favor high hit frequency machines. If I can find it certified 98% or better, all the better. People who don't mind constantly feeding the bill acceptor can disregard hit frequency.

As to your second question: As a general rule, a high hit frequency machine with a small top jackpot is your best bet for small but consistent profits.

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

For more information about slots and video poker: