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What does payout really mean on a slot machine?

5 December 2005

Thanks for your articles.

Would you please explain to me what a 98% payout really means? How is this determined? Is this payout made over a period of time, say, 24 hours, 24 days or what? I usually play $25 and $5 dollar slots, but I never know which machines to play. Any suggestions?

Is a Double Diamond machine just as good at paying as, say, a Triple Diamond with the same jackpot of, say, $25,000?

Is it better to play a machine with a $125,000 jackpot or a machine with a $45,000 jackpot, as far as total return barring the jackpot?

I usually do not play progressive machines.

Thanks for the information.

Larry

Dear Larry,

Writing these articles is truly my pleasure. Thanks for the kind words.

Another name for a machine's payout is its long-term payback. A machine's long-term payback tells us the percentage of the money played through a machine that will be returned to its players. Another way to look at the number is as an average. A 98% payback machine will, on the average, return 98% of every dollar played through it.

A machine's long-term payback is simple to calculate — if you have access to the machine's programming. You first look at the number of virtual stops on each virtual reel. Multiplying the number of virtual stops on each reel together gives us the total number of combinations possible on the machine.

Next, we have to look at the winning combinations listed on the pay table. We have to find the number of ways we can make each combination by looking at how many times the appropriate symbols appear on each reel. To find the number of ways to make single bars, for example, we multiply the number of times single bars appears on the first virtual reel by the number of times single bars appears on the second virtual reel by the number of times single appears on the third virtual reel.

We find the number of ways to make each winning combination, multiply those numbers by how much each winning combination is worth, and add up all those results. That gives us the total amount of money the machine will return to its players, assuming each combination appears only once. (That's a valid assumption to make, by the way, because each combination is equally likely. Keep in mind that I'm referring to a combination of virtual stops, not a combination of symbols on the payline. Three Double Diamond symbols are clearly not as likely to land on the payline as three single bar symbols.)

Now we have the total amount of money returned to players and the number of combinations. We divide the money returned by the number of combinations and multiply by 100 to get the long-term payback percentage when one coin is played. To find the long-term payback for playing two, three or some other number of coins, the procedure is the same, but we use some different number. First, when we find the total amount of money returned to the players, we have to multiply the ways each combination can be made by the value of each winning combination when that many coins are played. In addition, in the final step, we also have to divide by the number of coins played.

There is a concept of time on a slot machine, but it isn't measured in clock ticks. It's measured in spins. The more spins played on a slot machine, the closer the percentage of money a slot machine has paid back to its players will tend to be to its long-term payback percentage. There is nothing in the machine that forces the percentage to be made during any period of clock-based time.

You can see evidence that long-term paybacks are not tied to time by looking at the payback percentages published in Casino Player, Strictly Slots, and other magazines. Pick a casino and compare the reported paybacks for different denomination over time. You'll see that the paybacks for nickels, quarters, and dollars change little from month to month. On the other hand, you'll see that the paybacks for the higher denomination machines can have large changes from month to month, sometimes even going above 100% some months. Both the 25-cent and the 25-dollar machines experience the same time periods, so if there were something to force the payback during a time period, we wouldn't see the big changes in the high-denomination machines.

Something else must be the cause of the stability in the numbers reported for the low-denomination machines and the volatility in the numbers for the high-denomination machines. That something else is the amount of play the machines get. The low-denom machines get so much play that their monthly numbers are always to close to their long-term numbers. The high-denom machines get so little play, their monthly numbers are all over the map. Still, if you looked at their long-term numbers, they would be getting closer and closer to their calculated long-term paybacks.

I believe that given the realities of the casino business today, most slot directors order the same payback percentage for all of their machines of a particular denomination. Therefore, all of the $5 machines will have roughly the same payback, and all of the $25 machines will also have about the same payback. I suggest you play games that you enjoy playing that are in areas in which you enjoy playing. You might also consider looking for straight multipliers and playing one coin per spin on those to stretch your bankroll.

Your last question is whether it's better to play a machine with a $125,000 jackpot or one with a $45,000 jackpot. Considering the fact the we rarely hit the jackpot (at least I rarely hit the jackpot), you're asking which machine pays back more money in the non-jackpot combinations.

Let's say they're both 95% payback machines. Our gut reaction may be to play the machine with the lower jackpot because we feel that the $80,000 difference in jackpots will be added to the non-jackpot combinations.

That feeling is valid only if the two jackpots are equally likely. For all we know, there may be only one way to hit the $125,000 jackpot and three ways to hit the $45,000 jackpot. That scenario makes the contribution to long-term payback for the non-jackpot combinations about the same on each machine.

There's no way to know for sure without having access to the par sheets for the two games.

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 send a reply to every question. Also be advised that it may take several months for your question to appear in my column.

John Robison

John Robison is an expert on slot machines and how to play them. John is a slot and video poker columnist and has written for many of gaming’s leading publications. He holds a master's degree in computer science from the prestigious Stevens Institute of Technology.

You may hear John give his slot and video poker tips live on The Good Times Show, hosted by Rudi Schiffer and Mike Schiffer, which is broadcast from Memphis on KXIQ 1180AM Friday afternoon from from 2PM to 5PM Central Time. John is on the show from 4:30 to 5. You can listen to archives of the show on the web anytime.

Books by John Robison:

The Slot Expert's Guide to Playing Slots
John Robison
John Robison is an expert on slot machines and how to play them. John is a slot and video poker columnist and has written for many of gaming’s leading publications. He holds a master's degree in computer science from the prestigious Stevens Institute of Technology.

You may hear John give his slot and video poker tips live on The Good Times Show, hosted by Rudi Schiffer and Mike Schiffer, which is broadcast from Memphis on KXIQ 1180AM Friday afternoon from from 2PM to 5PM Central Time. John is on the show from 4:30 to 5. You can listen to archives of the show on the web anytime.

Books by John Robison:

The Slot Expert's Guide to Playing Slots