The gaming industry is big business in the U.S., contributing an estimated US$240 billion to the economy each year, while generating $38 billion in tax revenues and supporting 17 million jobs.
- You're going to have to fill out a tax form. We're going to assume that you won more than $1,200.
- MAXIMIZING SLOT PAYOUTS Slot machines are not games of strategy. Live casinos and online casinos offer them as games of pure chance. Only rarely does skill come into play, although skill-based slots loom as a coming attraction.On most slot games, there's nothing you can do to change the outcome.
In most states, the slot machine must pay back at least 75 percent of the money it takes in. Percentages vary quite a bit, and casinos don't have direct control over those percentages. You might also be a cheater, of course, but your chances of successfully cheating a slot machine are even lower. All slot machines have a 'payback' percentage as set by the casino and approved by the state's gaming commission. In order to re-set the percentage the casino has to submit a proposal to the gaming.
What people may not realize is that slot machines, video poker machines and other electronic gaming devices make up the bulk of all that economic activity. At casinos in Iowa and South Dakota, for example, such devices have contributed up to 89 percent of annual gaming revenue.
Spinning-reel slots in particular are profit juggernauts for most casinos, outperforming table games like blackjack, video poker machines and other forms of gambling.
What about slot machines makes them such reliable money makers? In part, it has something to do with casinos' ability to hide their true price from even the savviest of gamblers.
The price of a slot
An important economic theory holds that when the price of something goes up, demand for it tends to fall.
But that depends on price transparency, which exists for most of the day-to-day purchases we make. That is, other than visits to the doctor's office and possibly the auto mechanic, we know the price of most products and services before we decide to pay for them.
Slots may be even worse than the doctor's office, in that most of us will never know the true price of our wagers. Which means the law of supply and demand breaks down.
Casino operators usually think of price in terms of what is known as the average or expected house advantage on each bet placed by players. Basically, it's the long-term edge that is built into the game. For an individual player, his or her limited interaction with the game will result in a 'price' that looks a lot different.
For example, consider a game with a 10 percent house advantage – which is fairly typical. This means that over the long run, the game will return 10 percent of all wagers it accepts to the casino that owns it. So if it accepts $1 million in wagers over 2 million spins, it would be expected to pay out $900,000, resulting in a casino gain of $100,000. Thus from the management's perspective, the 'price' it charges is the 10 percent it expects to collect from gamblers over time.
Individual players, however, will likely define price as the cost of the spin. For example, if a player bets $1, spins the reels and receives no payout, that'll be the price – not 10 cents.
So who is correct? Both, in a way. While the game has certainly collected $1 from the player, management knows that eventually 90 cents of that will be dispensed to other players.
A player could never know this, however, given he will only be playing for an hour or two, during which he may hope a large payout will make up for his many losses and then some. And at this rate of play it could take years of playing a single slot machine for the casino's long-term advantage to become evident.
Short-term vs. long-term
This difference in price perspective is rooted in the gap between the short-term view of the players and the long-term view of management. This is one of the lessons I've learned in my more than three decades in the gambling industry analyzing the performance of casino games and as a researcher studying them.
Let's consider George, who just got his paycheck and heads to the casino with $80 to spend over an hour on a Tuesday night. There are basically three outcomes: He loses everything, hits a considerable jackpot and wins big, or makes or loses a little but manages to walk away before the odds turn decidedly against him.
Of course, the first outcome is far more common than the other two – it has to be for the casino to maintain its house advantage. The funds to pay big jackpots come from frequent losers (who get wiped out). Without all these losers, there can be no big winners – which is why so many people play in the first place.
Specifically, the sum of all the individual losses is used to fund the big jackpots. Therefore, to provide enticing jackpots, many players must lose all of their Tuesday night bankroll.
What is less obvious to many is that the long-term experience rarely occurs at the player level. That is, players rarely lose their $80 in a uniform manner (that is, a rate of 10 percent per spin). If this were the typical slot experience, it would be predictably disappointing. But it would make it very easy for a player to identify the price he's paying.
Raising the price
Ultimately, the casino is selling excitement, which is comprised of hope and variance. Even though a slot may have a modest house advantage from management's perspective, such as 4 percent, it can and often does win all of George's Tuesday night bankroll in short order.
This is primarily due to the variance in the slot machine's pay table – which lists all the winning symbol combinations and the number of credits awarded for each one. While the pay table is visible to the player, the probability of producing each winning symbol combination remains hidden. Of course, these probabilities are a critical determinant of the house advantage – that is, the long-term price of the wager.
This rare ability to hide the price of a good or service offers an opportunity for casino management to raise the price without notifying the players – if they can get away with it.
Casino managers are under tremendous pressure to maximize their all-important slot revenue, but they do not want to kill the golden goose by raising the 'price' too much. If players are able to detect these concealed price increases simply by playing the games, then they may choose to play at another casino.
This terrifies casino operators, as it is difficult and expensive to recover from perceptions of a high-priced slot product.
Getting away with it
Consequently, many operators resist increasing the house advantages of their slot machines, believing that players can detect these price shocks.
Our new research, however, has found that increases in the casino advantage have produced significant gains in revenue with no signs of detection even by savvy players. In multiple comparisons of two otherwise identical reel games, the high-priced games produced significantly greater revenue for the casino. These findings were confirmed in a second study.
Further analysis revealed no evidence of play migration from the high-priced games, despite the fact their low-priced counterparts were located a mere 3 feet away.
Importantly, these results occurred in spite of the egregious economic disincentive to play the high-priced games. That is, the visible pay tables were identical on both the high- and low-priced games, within each of the two-game pairings. The only difference was the concealed probabilities of each payout.
Armed with this knowledge, management may be more willing to increase prices. And for price-sensitive gamblers, reel slot machines may become something to avoid.
By Bill Burton
Over the last year, I have heard many players complain that they are not having as many jackpots on the slot machinesas they used to have. I first heard this from a few of my friends who said they believed that the casinos were tightening the machines because the bad economy was forcing people to make fewertrips to the casino. I did not pay too much attention to this but then I started to notice other players posting the same opinions on several Internet forums.
It seems many of the players have come to believe that every casino was lowering the paybackpercentage on all of their machines.
A month ago I was contacted by a newspaper reporter from Colorado who requested an interview with me. He said he was writing a story about the casinos lowering the payback on the slot machinesthat were making it harder for the players to win. He wanted my opinion on the subject and he was surprised by my answer.
Why Players Win Fewer Jackpots
I told him I do believe that some casinos may be ordering new machines with lower payout percentages but I did not believe that this was the main reason why players may not be winning as muchas they used to. I gave him the following reasons for my answer.
Over the years there have been many myths associated with casino gambling. One of the most common ones is the belief that a casino can raise and lower a machine's payback with the flip of aswitch. This is not true because the slot machines have a computer chip in them that determines the pay back percentage. These are set at the factory.
Can Casinos Adjust Slot Machines
In order for a casino to change the pay back, they would have to change the chip. In most jurisdictions, there is paperwork that has to be filled and submitted to the Casino Control Commissionfor each machine if the chip is changed. It is time-consuming and the chips are very expensive. For this reason, the cost of changing the chip in numerous machines on the casino floor does notmake economical sense.
Many of the gambling jurisdictions around the country require the casinos to report the overall payout percentages on a monthly basis. (California is not one of the States) These figures are amatter of public record and are published in some newspapers and gaming publications. I looked back on these figures over the last year and saw that there was very little change in most casinosaround the country. In some instances, there were even some of the payback percentages had increased.
A reason why some players feel that they may not be winning as often is the fact that many players are making fewer trips to the casino so they are not playing as many sessions. Playtika slotomania free coins. So because theyare playing fewer sessions they will see fewer big jackpots and fewer winning sessions overall. It is all proportional.
Some players may have decided to play lower denomination machines. Many of the nickel and penny slot machines have a higher hit frequency, which means you will have many smaller wins but not asmany big jackpots.
How To Help Your Payback Percentages
If you still honestly believe that your casino is lowering the return rate on the slot machines you have several courses of action. The easiest thing to do is to play the older machines. It isdoubtful that a casino would go through the expense of putting a new chip in an older machine to lower the return rate. You can try a new casino. You may find that your luck is better at adifferent casino and a change is your routine will let you enjoy some new experiences.
You can switch to video poker. It is the only machine game that will let you know the payback of the machine by readingthe pay table. However, if you do decide to try video poker, make sure you learn the strategy or get a strategy card to bring along with you when you play.
Switch to the table games. Playing table games is exciting and they offer a lower house edge than the slot machines. Many casinos give free table game lessons so you can learn the basics beforeyou sit down.
Let me close by saying again that I do believe that there will be some machines on the casino floors with lower returns, however, I do not believe that is as widespread as the rumors would haveyou believe. The casinos are in competition with each other for your business so they do not want to alienate the players by offering games where nobody can win.
Do Casinos Control Slot Machines
Good girl games for free. As a customer/player you always have the option of taking your business elsewhere. The ultimate decision of where to play is entirely up to you.
Until next time remember, luck comes and goes...knowledge stays forever.
