Ask the Slot Expert: Tax form after winning $2,000 on Double Up

Question: On a slot machine such as Wonder Four, you can play four games on one spin. Does it matter what games you choose? Is it the game you choose or the position a game is in that determines the outcome of that spin? I see people changing one (or all four) to another game in hopes that it will hit.

Answer: We'd have to see the PAR sheet for the machine to know for sure, but I suspect that the long-term paybacks of the different games are going to be about the same. If the paybacks on the games were in a wide range, it would be difficult to calculate the long-term payback of the machine overall.

Let's say the payback on Wild Splash was much higher than the paybacks on the other games. Players who didn't know this would play all four games. Knowledgable players, on the other hand, would play four panes of Wild Splash, and therefore play at the highest long-term payback possible on the machine and at a higher long-term payback than players who play one or more panes of the other games.

How can the manufacturer guess how frequently each game will be played in order to calculate the machine's long-term payback? Moreover, what if the players on a particular machine don't choose games with the expected frequency and the machine's actual payback doesn't fall into the expected range for the amount of play the machine has received? Paybacks in a wide range mean it is difficult for the casino to compare a machine's actual performance with the expected performance to check that a machine is operating properly and is not being cheated.

Different long-term paybacks on the games, in short, leads to many problems.

All of those problems go away if the long-term paybacks of the games are about the same, say within one-half percentage point. With the long-term paybacks so close, it doesn't matter how frequently players play each game.

So, it doesn't matter which games you choose.

The outcome of each game is determined by output from the random number generator (RNG). The program running the slot machine gets five number from the RNG to determine where to stop the reels in the first pane. It then gets five numbers from the RNG to determine where to stop the reels in the second pane. It repeats the process to determine where to stop the reels in the third and fourth panes.

The position of the game has no effect on the outcome. The game itself has no effect on the output from the RNG, but one set of numbers may represent a winning spin in one game and not in another. In that sense only does the game have an effect on the outcome. But that effect is for an individual spin. In the long run, if a game has a particular hit frequency, it will hit with that frequency regardless of what position it is in.

Switching games may give you better (or worse) results in the short run, but in the long run it doesn't matter if you stay or switch.

Question: Last week I was playing quarter Double Double Bonus with the Double Up feature. I hit four aces with a deuce kicker for $500.

The machine asked if I wanted to double up. I was feeling lucky, so I doubled up and I won. I now had $1000. The machine again asked if I wanted to double up. I declined.

If I had doubled up and won $2000, would I have gotten the pink slip?

Answer: Pink slip? Fired from your job? I assume you mean a W-2G, but I don't think I've ever seen a pink one. Maybe years and years ago when casinos used a multi-part form instead of laser printed copies.

In any event, had you won $2,000 on the second double up you would have gotten a tax form. You in effect won $2,000 from your $1.25 bet, which exceeds the $1200 threshold. Your hand would not be considered three separate events: Winning $500 on a $1.25 bet, winning $500 on a $500 bet, and winning $1,000 on a $1,000 bet — with all winnings less than the threshold.

Players tried a similar argument when multi-hand poker first arrived on the slot floor. Say you were playing quarter Triple Play and hit a royal on two of the hands. Players tried the argument that they had made three separate bets and had won $1000 on two of those bets.

The IRS said, "Yeah, right. You made a bet of $3.75 and won $2,000. Here's your tax form. See you on April 15."