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About minumum slot paybacks27 April 2009
Thanks for the kind words about my columns.
As for state regulations, slot-enabling statutes specify a minimum long-term payback and sometimes also specify that no machine's long-term payback should exceed 100%. If a machine's long-term payback does not fall in the approved range, the machine is illegal for operation in that state.
Turning to Class III gaming in tribal casinos, the minimum is specified in the tribe's compact with the state. If the tribal casino offers only Class II gaming, I don't think they are subject to any minimums. I could not find a minimum specified in the copy of the Indian Gaming Regulatory Act I found online (http://www.nigc.gov/LawsRegulations/IndianGamingRegulatoryAct/tabid/605/Default.aspx).
There is no constant value for the minimum. It varies state by state, compact by compact. The minimums are published; the statutes and compacts are part of the public record.
Now, about those payback signs over banks or carousels. They may be covered by statute or compact. But if the statutes or compacts don't address the signs, I think Truth in Advertising laws will cover them and ensure that what the signs say is indeed true.
I don't recall having seen any payback signs over the Class II games I've seen, but my experience with Class II gaming is extremely limited. I can't say whether federal and state Truth in Advertising laws would apply on a reservation.
For the most part, you don't have to worry about statutory minimums. Competition keeps slot paybacks well above the minimums. A casino could order a few really low long-term payback machines and attempt to strategically place them on its slot floor, but the slot directors I've had contact with order roughly the same long-term payback for all of their machines in a particular denomination. They're concerned with trying to create niches in which players feel comfortable playing, either with a theme or a mix of games, on their slot floors. They try to drive profit by increasing play, not by increasing hold. A new slot's sell sheet frequently cites manufacturer studies showing that the slot outperforms the average slot. The new slot accomplishes that feat not by paying less than the average, but by encouraging more play.
Best of luck in and out of the casinos,
Send your slot and video poker questions to John Robison, Slot Expert, at email@example.com. Because of the volume of mail I receive, I regret that I can't reply to every question.
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