(Slots continued)

Payback Rate

     

The house edge for slot machines are fixed by the slot manufacturers. All machines payback at a particular percentage. My understanding is that casinos can change the payback rate, but the procedures for doing so are regulated. There is no danger of a casino changing the payback rate while a player is feeding the machine coins. This would no doubt be illegal. Casinos also track a machine's performance to insure that it is performing as expected. If the slot machine is not performing as well as it should be, it may be removed from the floor.

All slot machines do not pay back at the same rate. Some are better than others. $.05 and $.25 slots typically have the worst payback to the player while $1 and $5 improve the payback. According to reports found at the Mississippi Gaming Commission's website, it appears that the higher denomination games have a higher payback rate than lower denomination games.

Occasionally, slot machines are marked with the payback percentage. Payback percentage for a slot machine can be deceiving, however. A machine that advertises a 98 % payback, for example, may require hitting the jackpot for the payback percentage to work out to 98%, with all other payouts carrying a higher vig. A bad example of this would be the following: The chance of hitting the Georgia lottery is 1:13,983,816. It follows that if the lottery jackpot builds to around 13-14 mill, buying a lottery ticket may not be such a bad bet. (Ignoring the fact that lottery tickets are split among people with the same numbers.) But, are you really ever going to win the lottery? Probably not. You are also most likely to play that 98% payback machine just long enough to abuse yourself with the higher house edge of the lesser wins and never realize that glorious 98% payback that comes from hitting the big one.

Progressive slot machines offer larger jackpots than normal slots. The large lotto size jackpots that climb into the millions of dollars can be found on machines that share a network. Tunica and Biloxi for example, have some machines that share the same jackpot, although the two cities are on the opposite ends of Mississippi. Other progressive machines are on a local network and build jackpots at one casino.

Common sense would seem to suggest that the higher the jackpot of the progressive slots, the better the overall payback to the player. However, this does not necessarily mean that progressive slots are a better deal than regular slots. My suspicion is that the progressive slots carry a higher house edge in order to build large jackpots quicker.

In order to figure the house edge on a specific machine, you need a lot of information about the machine, including: pay table, # of reels, # of spaces per reel, # of each type of icon, # and denomination of coins to be played. Just as a quick example, the chance of three jackpot symbols coming up on a slot machine with 3 reels and 60 spaces per reel, where there is only one jackpot symbol per reel = 59*59*59 = 205,379:1.