Have slot paybacks gone down?

John,

First let me say that I enjoy your comments and your insight to all the questions that have been asked. I understand so much more about slots now than I ever thought I would.

My question is this, do you think that the payback percentages of the slot machines are lower today than they were in the past few years? My personal experiences would say yes, but maybe I'm just having a run of bad luck along with everyone else that we play slots with. I have talked with lots of friends that feel the same way, and even the floor people have said that the hand pays are way down from what they used to be.

I had an interesting conversation with a person that worked for the Nevada gaming commission. This conversation took place in late September. We were talking about which casino might have the best payback percentages on the slots and he replied that it didn't matter which casino you played at, it would be hard to win until after the first of the year. He explained that the casinos were down for the quarter and had to pay a certain percentage to the state and that all the machines would be "tight" the last quarter of the year. I don't personally know this person, we just happened to meet and had a conversation. You hear all kinds of things but this made me think more about the programming of the machines and how they can change the payback percentage.

I will say this, I play slots with a decent daily bankroll and have a good rating with the casinos. My daily bankroll doesn't seem to last as long today as it did in the past and thus my player points are down. I know lots of people are saying the same thing. I think the payback percentages today are lower than they used to be. What say you?

Thanks for your kind words about my columns.

I think payback percentages overall have gone down in the past five or so years. Not because of a deliberate decision by casinos to lower payback percentages, but because of the changing mix of machines on the slot floor.

Low-denomination machines are much more popular today than they were a few years ago and they're taking up more and more space on the slot floor. Despite the fact that you can bet dollars per spin on penny and nickel machines, I think most slot directors don't order "dollar-machine" payback percentages for these machines, but percentages closer to what they ordered when the max bet on these machines was less than a dollar.

Having more low-paying, low-denomination machines shifts the overall payback down, even though the casino is still ordering the same payback percentages for machines in each denomination.

Another factor driving the paybacks that casinos report down is the migration of higher-denomination players to the lower denomination machines. Many dollar players have switched to nickel video slots because the video slots are more fun to play. More play on the lower-paying machines and less on the higher-paying machines drives the amount casinos report players won down.

Now, my theory addresses the overall payback in casinos, not the payback on individual machines within a denomination, which I think has stayed pretty much the same in most casinos.

I'm surprised that your bankroll is not lasting as long now as it did before. Many new slots are designed to increase a player's "time on device."

Is there anything different you're doing today compared with a few years ago? Perhaps you've switched from reel-spinning slots to video and you've increased your average bet per spin? I suspect that this is what has happened for most players who say their bankrolls don't last as long as they used to.

As for the floor person's statement that hand pays are down, I think there are other factors at play here too. Ticket systems eliminate "convenience" hand pays — that is, hand pays that don't require an IRS form but are done to prevent emptying out a hopper. The mix of jackpots on machines has an effect on hand pays too. A shift to more lower-value jackpots will decrease hand pays.

Finally, I doubt that the person you spoke with actually worked for the Nevada Gaming Commission. Consider this: If the casino had to pay a certain percentage (usually of slot win) to the state, why would the casino have to lower their payback percentages at the end of the year? The slot win is what it is and the percentage is what it is. If the slots win less, the payment is less.

Best of luck in and out of the casinos,
John

Send your slot and video poker questions to John Robison, Slot Expert, at slotexpert@comcast.net. Because of the volume of mail I receive, I regret that I can't reply to every question.