Machine Payback

The average amount of money that a slot machine returns to the player after a long period of play is called the payback. The payback is stated as a percentage of the amount that the player invested in the machine. If the payback is 95 percent, for example, you can expect to lose five percent of every dollar that you bet.

Thus, the casino is charging you an average of 5 percent (over the long run) for the privilege of playing its machine. That is, for every dollar you risk, the casino keeps a nickel. That doesn’t sound too bad, but in many cases the charge can be 10 percent, or even 20 percent. The only thing that keeps this number from getting completely out of hand is the competition between casinos.

In the old days, by adjusting the number of symbols on the reels and by changing the payoff combinations, a slot machine could be made to pay back any desired percentage. Today, the payback is adjusted by changing a chip in the microprocessor, a procedure generally done at the slot machine factory.

The payback usually ranges from 80 percent to 99 percent, except in New Jersey where by law slots have to pay back at least 83 percent. Keep in mind that these numbers are long-term averages. Machines that are set to the lower end of the range are considered to be tight, while those at the upper end are liberal or loose.

In most major gaming jurisdictions, the average paybacks actually range from around 90 to 98 percent. Historically, the highest-paying machines have always been in Nevada, where Reno/Tahoe and North Las Vegas are usually the best, with downtown Las Vegas not far behind. The average paybacks on the Las Vegas strip run neck in neck with the smallest jurisdictions such as those in Mississippi, Louisiana, and Illinois. Atlantic City, taking advantage of the largest population center in the United States, trails behind by one or two points.

The average paybacks also vary according to the machine denomination. The more you are willing to risk, the more the casino is willing to give back. When a player switches to a higher denomination, the casino makes more money and can afford to give more of it back. The following chart shows the approximate average paybacks in Nevada for the year 2005 (rounded to the nearest point):

The penny and nickel games still have the poorest payback, but that is beginning to change. Even on the penny progressives - yes, they have penny progressives - a wager of three hundred to five hundred pennies ($3 to $5) is usually required to qualify for the top jackpot. Consequently, many casinos don’t treat these any differently than their other progressives.
Only a few years ago, the average for nickel payback was less than 90 percent. Penny and nickel machines have changed dramatically with the pro¬liferation of forty-five- and ninety-credit video games.

The average bet per spin on a forty-five-coin nickel game is over a dollar, which makes these games more profitable for the casino than the quarter machines. Consequently, some casinos have been raising the paybacks on nickel games higher than their quarter slots. And before long, it is expected that the average payback for nickel games will exceed the quarter, and maybe even the half-dollar machines.

Unlike video poker, however, there is no sure way to tell which slot machines are the best. The posted payout schedule on the machine is of little help without knowing how the microprocessor chip is programmed. Most players are not privy to this information.