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Understanding Payback Percentage

What does “100 percent payback” really mean?

By Frank Legato

 

For more than two decades, this magazine has sought to give players a better understanding of the games they find at the casinos. In the area of slot machines, players are constantly seeking information on two areas in particular—the function of the random number generator in a slot machine; and how to find the best payback percentage on a slot.

I periodically use this space to address that first area, the RNG—the last time I gave you a comprehensive explanation of how slot results are achieved through the RNG was in the August 2011 issue of Casino Player. However, it has been much longer since we revisited one of the most misunderstood aspects of the slot-machine universe, payback percentage.

Our readers are always looking for the slot machines that return the highest payback percentage. We devote an issue to the subject every April, when our “Loosest Slots” survey reports the casinos and casino regions across the country which returned the highest aggregate slot payback percentage over the entire previous year.

Every year, the numbers are similar—the most generous casinos return somewhere around 95 percent, counting all denominations. If you delve further into the statistics, you’ll find that the penny games are returning less than 90 percent; the dollar games are returning 96 percent or more.

But what does all this mean? What if you find a 99 percent game? If you play video poker and are enough of an expert to play perfect strategy, you are playing a game with a payback percentage of 100 percent or more. Does that mean you’ll always win?

The answer is no. A 100 percent payback does not mean you’ll win. It doesn’t necessarily mean you will lose, either. What it means is that, over time, that machine will return an amount to players. in payoffs for winning combinations, that is equal to the amount that has been wagered on that game, by all players. It means that 100 percent of the money spent on wagers, theoretically, is returned to players in wins.

Remember, that’s all players of a slot machine. In the case of video poker—the only gaming machine you’ll find on the floor that has a theoretical  payback of 100 percent—the only people getting that 100 percent are the people who play perfectly. Since many, many more people play with less-than-perfect strategy than with expert strategy, the machines make a lot of money for the casinos.

The other reason video poker games make money for the casinos, of course, is that even the most proficient experts will not necessarily win on a given day. A 100 percent payback, in the end, is really the absence of any house advantage. Think of it like a coin flip. The flip of a coin has a 100 percent payback percentage, because over time, it will land on heads as often as it lands on tails. That doesn’t mean that you, right now, can flip a coin 10 times and get heads five times. You may get one result 10 times. And if you’re betting on it, you could lose 10 times in a row.

So, should you look for the highest possible payback percentage? Sure, if winning money is your main goal in a casino. Just remember, you’ll need to be prepared to lose if you want to win. The key to winning on a high-payback machine is your ability to stay in the game long enough to wait out the small house advantage, or in the case of a full-pay machine, for the law of averages to swing in your favor.

If fun is the main reason you play a slot machine, finding the highest payback percentage on your slot is less important. If you doubt that statement, just look at the most popular current denomination of slot machines, the penny game. These have the lowest payback percentage on the slot floor, and if you are a regular reader of this magazine, you know that going in. Yet, people love them, because they afford a lot of game play for a small amount of money. People treat the penny slots almost as if they were in an amusement arcade—the fun experience is what they seek, and if they win money besides, all the better.

The long and short of it: Have fun, and don’t get too hung up on the numbers.

 

Quick Tip

 

Bet the max if you can. As we’ve told you before in this space, there is no inherent reason to bet the maximum on any given spin. Most slots will tell you whether max-bet is required to activate a bonus or qualify for a jackpot, and it’s always a good idea to bet the maximum on those games. However, betting the max if you can is a good idea on any slot. Just as in table games, a good casino strategy on slots is to raise your bet according to your available bankroll. If you hit big, jack up your bet. You’ll win more, and it’s a relatively painless way to maximize your return.

 

 

This Just In:

 

Last month, we told you about two new places to play slots in the East, the Valley Forge Casino Resort and the new Revel casino in Atlantic City. This month, Marylanders get a huge new slot venue as Maryland Live! opens adjacent to the Arundel Mills Mall in Anne Arundel County. Slated to open June 6, Maryland Live! will be the largest casino in the state by far. It will open with 3,200 slots, but will eventually add another 1,550 games. In addition to traditional slot machines, the casino will offer a complete lineup of electronic multi-player table games. A lineup of nationally acclaimed restaurant brands will round out the offerings.

Understanding Payback Percentage.

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