Slot Machine Payouts
A quick overview of the basic mathematics behind casino slot machine games should give you a good idea why the slot machines are called one-armed bandits. It should also disabuse you of the notion you’re going to find a system to consistently win at slots, while freeing you to relax and enjoy a good gamble, even if the odds aren’t in your favor.
Before we get into the math principles of slot machine payouts, let’s define our terms just a little bit, discussing a few basic slots ideas: house advantage, the law of averages, loose machines, tight machines, and progressive jackpots.
House Advantage – The percentage of money you feed into a slot machine that’s kept by the casino (on average). Slot machines are set to pay back a certain amount of money, usually between 90% and 95%, but sometimes as low as 85%. If on average, for every $100 you feed into a slot machine, the casino keeps 90%, then the house advantage would be the remaining 10%.
Law of Averages – A theorem which states that large samples of statistics are going to come close to the percentages. For instance, if you hit spin a million times on a slot machine and the payouts are 90%, the amount of money you’re likely to receive back is 90% of what you put into the machine. The fallacy of the “law of averages” is that the same is going to apply over a small sample of 50, 100, or even 500 spins on a slot machine. At lower number, no such guarantees apply. Even at a million spins, there’s no law that says 90% is going to hold, though it’s probable that’s going to happen. Therefore, the law is actually no more than a probability. Long story short, just because you lost the last 50 spins, that’s no reason to believe the machine is “due”.
Loose Machine – A machine set by the casino managers to pay back a slightly larger amount than the average slot machine of the same type. If the other games under the same name pay back 90% and one machine is set to 93%, then it is a loose machine. Though your odds are better, over any one session, you’ll hardly notice the difference.
Tight Machine – A machine set by the casino managers to pay back less than the average for that machine. Your odds are less of winning when playing this machine. Once again, if you get back $3 extra on every $100 you put in (on average), but the law of averages doesn’t apply to small statistical samples, your deviation from the house advantage can be significant. Once again, the tight machine might pay back more than 100% over any given 100 spins, while the loose machine might pay back 50% over the same period. To the casual observer, a tight machine might appear to be the loose machine, in the small numbers you’ll be dealing with in a slots session.
Progressive Jackpot – Slot machine jackpots that get larger the more times someone plays the slot machine without hitting the jackpot. When you have dozens, if not hundreds, of progressive slot machines networked into the same jackpot, the payouts can range into the millions. Generally speaking, the higher the jackpot, the less frequently the slot machine is going to pay off when the jackpot isn’t going to hit. If you hit, it’s like winning the lottery, but these are going to be your worst odds in the casino.
Slot Machine Payouts
Casinos make about 70% of their money off of their slot machines. It might not sound like a machine that keeps $5 of every $100 is going to rake in much money in an hour’s time, but some slot machines can go through 800 spins in an hour. Imagine 800 spins at $1 a spin. That’s $800 bet and $40 kept by the casino (on average). Imagine a casino with 1,000 slot machines paying off at that rate, and you’ll get the idea why slots are a good bet for the casino.
Let’s compare slots to other casino games. According to Michael Shackelford (the Wizard of Odds), the house advantage on slots averages between 5% and 10%. The house advantage on blackjack is about 2%, while the advantage on craps in only 1.5%, and on video poker somewhere around the same amount, given or take a percentage point. American roulette has a house advantage between 5% and 6%, while Caribbean Stud is about the same.
That means slot machines are going to be some of the worst odds you’ll get in the casinos. Most of the famous games are a better bet. Only keno, at a whopping 25+%, is consistently a worse proposition. Playing the slot machines are better than playing the lottery, for sure, but the idea you’re going to find some betting system or money management scheme or other secret to playing the slots that’s going to wipe out 5% to 10% advantages for the house is ludicrous. Anyone who tells you that is either lying or doesn’t know slot machines.
Penny Slot Machine Payouts
That’s why so many slots players are fans of the penny slots. They know, in their heart-of-hearts, that the odds are against them. Whatever they tell you about all the jackpots they’ve hit, they know they lose more often than they win. So they play the penny slots to limit their losses and afford the entertainment of slots gambling.
For instance, in the earlier example, I talked about the $1 bet on each spin. Imagine a scenario where you bet 15 paylines at a penny apiece, instead of $1 per bet. You’re essentially feeding in just over 1/7th the amount of money, so you’re likely to lose about $5 or $6 an hour playing the slots. If you play for 8 hours, you can expect to lose $40 or $50 on average.
That’s on average, though. Sometimes you’ll lose twice that amount. Sometimes you’ll win three times that amount. Or imagine that you go to the casino 5 times and you lose $150 each time on 4 of those 5 times. The fifth time, though, you come away with $400. After five visits, you’ve lost $200 in total, or $40 per visit. You might view $40 a reasonable entertainment expense for the excitement of all those hours gambling on slots, and you have a story to tell your friends about that 5th visit where you won $400. That’s how slot machines work.
Slots Math – Budgeting Your Entertainment Dollar
In the end, you should look at your slot machine budget like it’s an entertainment expense. You should also budget accordingly. Don’t spend any more than you think you could spend on other entertainment expenses, like a trip to a ballgame or a concert. Budget wisely, be happy if you win more than you spend, and go home with another casino experience behind you.
But don’t fool yourself into thinking you can learn a secret to shift those odds in your favor.