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Slot Returns and Paybacks

The terms returns and payback are often used interchangeably but in this article I will assign specific meanings to avoid confusion of the terminology.

The return of a slot machine

This number is the percentage of money actually paid out to players vs. the amount of money paid in by the players.

If you put $100 into a slot machine and get $92 back, your return was 92%. If all players put $1,000,000 into a casino's slots in a certain period of time, and they collectively won $967,000, then the return of this specific slot machine was 96.7%.

The $33,000 that wasn't paid out is the casino's profit, in this case 3.3%. In most jurisdictions casinos have to report their slot returns to local governments, and that information is public, and published monthly in Casino Player magazineBlackjack. However, slots returns and video pokerBlackjack returns are usually lumped together, so you can't see the returns for just slots.

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Slots Payback

The return is contrasted with the payback, which is the theoretical amount the machine would pay back over an infinite number of spins, according to the math. If a machine is set to pay back 95% then if it were played forever it would return 95 cents on the dollar for every dollar played.

But of course you can't play forever. In the short term anything can happen, and that's why people play slots. Obviously a machine isn't going spit back exactly 95 cents at you every time you play a dollar. But if you sat there and played for years, you would get back about 95% of what you put into it. What we know is that the closer our return will come to the theoretical payback.

Why Casinos Don't Cheat

When a casino orders a slot machine from the manufacturer, it specifies the payback it wants for that machine, which generally ranges from 87-98%.Online Slot Machine

That may seem like a good deal, but it's not. If you're getting back 95% of your money, that means the casino is keeping 5%. If you play a dollar machine, two coins at a time, 800 spins an hour, for one hour, you're putting $1600 into the machine. The casino's 5% take means you lose $80/hr. on average. Ouch.

This is one reason that casinos don't cheat with slot machines: They don't have to. The odds are so overwhelmingly bad, all they have to do is put the machine on the floor and rake in the money.

Expected Loss at Slots -The Grind

Understand that your expected loss is based on how much money you play, not how much money you take with you. For example, you might think, "Okay, I'm bringing $500, and the slots take an average of 5%, so I should lose about $25." Not even. You'll go through that $500 in less than an hour on a $1, two-coin slot, and lose an average of $25 on that. But then when you play the $475 or so that you got out of the machine, you'll expect to lose 5% of that, etc. Losing a bit every time you replay your bankroll is called the grind. The casino grinds you down. It doesn't matter whether your return is 90% or 99%, if you play long enough at any game you'll eventually lose all your money.

On the other hand, if you pocket all your winnings from the machine, you should lose only $25 on average.

The return on a machine is determined by the chances of every winning combination times how much those combos pay. For example, let's say there are 64 stops on each reel. There are therefore 643 = 262,144 total combinations. If we played through every combination exactly once, on our hypothetical machine we win 498,074 coins. So 498,074 / 524,288 = 95%. Ta-da. (I'm assuming this machine doesn't have a bonus for a multi-coin jackpot to keep things simple). Here's a more detailed analysis of how the payback on a machine is calculated.

 

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In general, the higher denomination the machine, the higher the payback. For example, in the Wizard's survey of video slots, looking at casinos that had multiple denominations of the same machines, nickels paid 91%, quarters paid 92%, and dollars paid nearly 94%. But even though the odds are better on the higher-stakes machines, you'll still lose more money playing them, because you're wagering more money. If you want to limit your losses, play the lowest stakes machines you're comfortable with. If you want a better chance of winning even if it means losing more money, play the higher denomination machines.

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