Slot Savvy: The Payback Percentage, and What It Means to You
What is an online slot game’s payback percentage, and does it dictate whether you will win or lose? Read on for the inside scoop.
I once wrote a column that riled a lot of readers. All I said was that casinos don’t lower payback percentages on slots because of global events—you know, like economic meltdowns, worldwide plagues, Martian invasions and other catastrophes. A recent zombie apocalypse came and went with absolutely no adjustments on those percentages.
The angry emails poured in. “You’re wrong!” they said. “I know, because I used to win, and now I don’t.”
I have no doubt these readers were telling the truth. However, their reasoning runs contrary to the truth of slot payback percentages, and how they relate to winning and losing in the short term.
What’s a payback percentage? Simple. It’s the percentage of the total money wagered on a slot machine that’s returned to players in jackpots. That means all players, not just players on a given night, or players in a given week.
Manufacturers program slot machines at the factory with one of several payback percentages, normally ranging from around 85 percent to around 94 percent.
That doesn’t mean that 85 percent of players win, or 94 percent. It just means the game is programmed with simulations of play to return 85 percent or 94 percent of the money deposited into it over the life of the machine—that’s over the life of the game, which could mean years, not days or weeks.
In actual practice, a game will reach its theoretical payback percentage in real returns over several weeks. On any given day, on any given spin, it’s a random device that can return 200 percent of what’s put in. People wager $20 and win $40. It happens all the time. Heck, people wager $20 and win $1,000. And people lose, too.
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Stroke of Luck
Winning and losing on a given occasion have more to do with a machine’s hit frequency than its payback percentage—hit frequency, combined with luck. Why else would the most popular style of slot game be the penny game, which is programmed with the lowest payback percentages?
Casinos can afford to let more people win on penny slots in the short term, because of the low denomination.
If you want a true gauge of what payback percentage means, look at video poker. Unlike regular slots, a knowledgeable video poker player can look at the face of the game and know the game’s long-term payback percentage. The best pay schedules return a payback percentage just over 100 percent.
Does that mean everybody wins? Of course not. You wouldn’t find these games in a casino if that was the case. What 100 percent payback means is that the jackpots and the wagers are equal over the long run. There is no inherent house edge.
A 100 percent payback is like flipping a coin—you have an equal chance of winning or losing. You can turn up heads three times in a row, or you can turn up tails 10 times in a row. You can lose on a 100 percent payback machine. Believe me, I have—many, many times.
But I’ve also won. That’s why it’s called gambling. It was avid gambler Chico Marx (above, with Harpo and Groucho) who once said, “A sure thing’s no fun.”
In a slot game, there’s only one reliable measure of payback percentage, and that’s the actual money the machines pay out.
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If casinos lowered payback on a whim, or because they needed to pay a few extra bills, or even because of some global catastrophe, the next logical conclusion would be to assume that the casinos reported inaccurate accounting returns to the regulatory agencies. That’s a crime. If you think casinos are run by criminals, why risk your money with them in the first place? Invest it in the stock market instead.
No criminals there, right?