What Is Slot Machine Payback Percentages

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The payback percentage of any given slot machine is the total amount of cash it has paid out divided by the total amount of cash accepted by that machine over a specified period of time, i.e. The ratio of winnings to wagers. If a player bets $1 on each spin for 100 spins and ends up with $97, then the payout is 97:100 or 97%. What is a payout percentage? A payout percentage is simply the percentage of the total amount of money that the slot will take in over a typical amount of time, that it will pay out back to players in the form of winnings. That percentage can range from as little as 75 percent up to around 98 percent. In essence, that is what payout percentage is.

If you are a keen slots player then you will know that one of the most useful pieces of information about a slot that you can discover is the payout percentage for the game.

Unfortunately, the term is ripe for misunderstanding and novice slot players often misunderstand what the term actually means, which can lead to them having totally unrealistic expectations of how much they can expect to win on a slot from any given session.

This can then lead to them feeling frustrated, cheated even and less inclined to play the slot again, which is a shame as it is their misunderstanding that is the issue, not the slot or casino in question.

The problem often stems from misunderstanding what the term 'payout percentage' actually means and how it is applied on the slot.

So in this article, we'll attempt to explain clearly what this means.

What is a payout percentage?

Slot Payback Information

A payout percentage is simply the percentage of the total amount of money that the slot will take in over a typical amount of time, that it will pay out back to players in the form of winnings.

That percentage can range from as little as 75 percent up to around 98 percent.

In essence, that is what payout percentage is. There is nothing more to it, but unfortunately, many people choose to think that this means that out of all the money they spend, they will expect to receive back between 75 and 98 percent back in winnings.

That is indubitably not the case and this misunderstanding occurs because people do not understand how the payout percentage is worked out, nor how the winnings used to calculate that amount, are paid out to players.

Suffice to say that a payout percentage is absolutely NOT a statement of how much of your wagering money you can expect to receive back in payouts on average.

Here's why:

Payout percentage - The number of spins

The first thing to note is that when an organisation such as eCOGRA tests the veracity of the claim that a slot has a payout percentage of X per cent, then they run a series of tests to authenticate that claim.

This involves spinning the reels of the slot millions of times in order to generate what the actual payout percentage is of the slot.

It is only when the reels of the slot are spun a huge amount of times that the payout percentage shows any meaning. As such, it is a statistic which is only meaningful for the casino, rather than the player who is unlikely to have the funds or time to spin a slot the many hundreds of thousands of times needed in order to generate payouts of the percentage levels of the slot.

Payback

On fewer spins, numbering 10,000, 1,000 or less, there can be a huge difference to the stated payout percentage. A slot may seem to run 'hot' and payout considerably more than the payout percentage (even run at a loss over that period of spins), whereas at other times it may seem to run 'cold' and pay out considerably less than the stated payout percentage.

The key thing to note here is that for a player, the number of spins they play is usually so small, that payout percentage is almost irrelevant. The more spins you play the more relevant the payout percentage becomes, but only if you spin the reels thousands of times over a sustained period.

Even then the payout percentage is still only an average mark. Sometimes the slot will pay out more over one million spins than the stated percentage, other times less, but usually these measures will average out to give a mean percentage level.

Pa Casino Slot Machine Payback Percentages

Therefore, it is best to view the payout percentage as simply a measure of how much the machine pays out over millions of spins and not really relevant to your chances of success.

Payout percentage - Structure of payouts

The other key aspect to the payout percentage to understand is how the payouts of a machine are structured and that this is equally important to understanding why you are not likely to earn back 75 to 98 percent of what you spend.

The best way to do this is via a hypothetical example. So let's say I developed a slots machine that has a payout percentage of 95% and let's say that in a typical month, this machine generates 1,000,000 in revenue from players playing 1,000,000 spins in that period.

If my hypothetical machine then followed the payout percentages exactly, then 5 percent of that 1,000,000 (50,000) is the casino's operating profit from the machine. That leaves 950,000 to be shared between all the players.

However, slot machines are designed to offer a range of awards, paying out smaller rewards more often and the big jackpot prizes less frequently. Let's say that my machine has paid out one large jackpot prize of 500,000 in the last month, plus three other smaller jackpot prizes of 100,000 apiece.

That means just four lucky players have accounted for 800,000 of the payout percentage. Out of 1,000,000 spins, that means just 0.0004 percent of players have accounted for 84.2 percent of the total payout percentage.

That means the remaining 99.9996 percent of players have just 150,000 in winnings to share amongst them from 9,999,996 spins. You don't need to be a mathematics genius to realise that therefore the vast majority of players of this hypothetical slot would receive a payout that is nowhere near the stated payout percentage.

However, four lucky players have receive a payout well in excess of the payout percentage! Sounds a bit like a lottery, right?

The structure of how your slot pays out is key to understanding that payout percentage is not a figure of how much you will win on average, but simply how much the machine pays out on average over a massive number of spins. Furthermore, how often a machine pays out top prizes, will also mean that the vast majority of players will not experience a payout percentage anywhere near what is stated.

That isn't an error, or misleading, simply a fact that over small sample sizes, the averages stated in the payout percentage are irrelevant.

So while payout percentages may not be useful in letting a player understand how much of their stakes they'll win back, where they are useful to punters is in giving them a comparative measure to judge which machines are most likely to offer them a return.

In theory, you are more likely to win playing a slot with a 95 percent payout percentage than you are a slot with a 75 percent payout percentage.

However, once again, because the number of spins you play will be so small, the chances of you noticing a difference between the slots is negligible. It is entirely plausible that you will play the 75 percent pay out slot and win more than the 95 percent payout percentage slot.

So the key lesson to learn about payout percentages is not to think they are stating how much you will win back on average in your session, but that they are a simple, general tool to assess how profitable the machine is for the casino.

Playing games of chance, which includes lotto, keno, scratch cards, slots, and many other games, can bring massive wins for the lucky. Take these games for what they are. And remember, there's no harm in trying your luck!

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by John Grochowski

Every slot player has tough days when the wins aren’t coming. And many a player has had the same thought: “How can they say these machines pay 90 percent when I’ve lost everything I’ve put in? Seems more like zero percent to me?”

That’s a leader among questions players ask about percentages and the slots. Others include the basic “How do they calculate slot payback percentages?” and the more esoteric “If state reports show higher casino win percentages on tables than slots, how can they say slot paybacks are lower than tables?”

Basic answers:

**Slot paybacks are calculated by dividing the amount paid to players by the amount wagered, then multiplying by 100 to convert to percent.

**You get a 90-percent return and still lose your whole buy-in because of the effect of re-betting winnings.

**Casino win percentages or hold percentages on slots and tables measure different things. The percentages on table games are based on buy-ins, while those on slots are based on wagers.

Let’s get into more detail, one at a time.

**How are slot payback percentages calculated?

Those you see in state gaming board reports or in magazines or websites that report how much casinos pay on slots are casino-wide averages.

A gaming revenue report for Iowa casinos showing the payback percentages for each casino’s slot machines and also for their table games.

If you see “Casino X paid 90.5 percent on slots in May,” it means that in that month 90.5 percent of all money wagered on all that casino’s slots combined was returned to players as winnings. If you see “Casino Y paid 95 percent on $1 slots,” it means 95 percent of the money wagered on dollar slots was returned as player winnings.

Slots: How payback percentages really work:

How can a machine take all your money and still pay 90 percent? How is a 90 percent payback on a slot somehow worse than a 20 percent hold on a table game?

For example, if players make $1 million worth of wagers at Casino Y’s dollar slots and they pay out $950,000, then you’d divide $900,000 by $1 million to get 0.95. Multiply that by 100, and you get 95 percent.

If you see a payback percentage for an individual slot machine, it’s usually a theoretical percentage. The odds of each game are set to drive results toward an expected average return, just as the odds of roulette, craps or any other table game are set to drive results toward expected averages.

In the Unites States, slot machines are the most popular games in the casinos.

A slot machine’s theoretical payback might be 92 percent, but that doesn’t mean it will return 92 percent every player, every day or even every month. There will be big jackpots that send a short-term return soaring, and there will be hot and cold streaks. Over hundreds of thousands of plays, the odds will drive the results to settle in near the expected average.

**If a given slot pays 90 percent, how can I leave with zero?

Players need to understand that any payout you receive counts on the payout side, even if you then lose it.

Let’s say you start with $100 and bet $1 a spin, and that for the first 100 spins you receive $90 in payouts. For the next 90 spins, you receive $80. Then you get a nice hit or two, and the next 80 spins take you back to $100. After that, you decline $10 each time — 100 spins for $90, 90 for $80, 80 for $70, 70 for $60, 60 for $50, 50 for $40, 40 for $30, 30 for $20, 20 for $10 and 10 with no return.

At the end, you haven’t made $100 worth of wagers. You’ve bet $820. And your return isn’t zero, it’s $720.

You’d had a slot machine payback percentage of ($720/$820)*100, or 87.8 percent.

It’s probably no consolation as you walk away having lost your entire $100, but the machine has paid something close to a normal percentage.

Sometimes we lose money a lot faster than that; sometimes we walk away without losing it all and sometimes we win. The total of all payouts and all wagers by the many who play the games lead to the overall payback percentage.

**How can the house edge be lower on tables and slots but the casino win percentage be higher on tables?

First off, let’s make clear that the casino win percentage is the inverse of the payback percentage. A game with a casino win percentage of 5 percent has a payback of 95 percent — per $100 wagered, the casino keeps $5 and the player gets $95.

Many states like to list win percentages in their statistical reports, where are geared toward casino operators and regulators.

Slot machines with large progressive jackpots are popular with slot players.

What

There’s sometimes some confusion that comes with comparing win percentages that almost always are higher on tables than slots despite table games having lower house edges.

The key is that the win percentage on the slots measures something very different from that on the tables:

Slot win percentage measures the portion of money wagered won by the casino.

Table win percentage measures the portion of BUY-INS that is held by the casino.

What is payback time

The difference is important, because players don’t just bet their money once and leave the machine or table. They rebet their winnings again and again, until a relatively small buy-in has led to thousands of dollars worth of wagers.

Slot and table players alike rebet winnings, but on slots that’s all electronically monitored and the win percentage reflects the rebets. Casinos don’t have the same quality of information on table players, so they use buy-ins instead.

What Is Slot Machine Payback Percentages Without

As noted earlier, when I slide $100 into the bill validator on a slot machine. I win on some spins, lose on more, and continue to play. Let’s say I’ve had about average luck on a dollar machine, and before I lose my $100, I’ve had enough winning spins to make $2,000 in wagers. In the end, I lose 100/2,000ths, or 5 percent, of my total wagers. That 5 percent is the slot win percentage for my play.

Now let’s say I sit down at a blackjack table, and push $100 across the layout to the dealer, who then gives me $100 in casino chips. I bet $5 a hand, and I win some and lose a little more. A couple of my $5 chips bring smaller denomination tokens when I win 3-2 payoffs on blackjacks. I stick around to replay my winnings until I’ve made $2,000 worth of bets, and find I’ve lost $14. So I go to the cage to cash in $86 worth of chips.

What is the casino’s hold on my table action? It’s $14 of my $100 buy-in, or 14 percent.

Both at the slot machine and at the table, I’ve bought in for $100 and made $2,000 worth of wagers. On the slots, I’ve blown the full $100, while at the table, I’ve lost only $14.

My table results sure look a lot better than my slot results, don’t they? But the win percentage would show that the casino kept 14 percent at the table, and only 5 percent on the slot.

Bottom line: Table games can have a lower house edge than slots and still have a higher casino win percentage just because slots and tables are measured differently.

What Is Slot Machine Payback Percentages Calculator

John Grochowski has been covering casinos and casino games for nearly 40 years. He is the author of six books
and his work appears in newspapers, magazines and websites around the world.

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