EXPENSIVE PENNIES
Low payback percentages, high bets make penny slots an expensive proposition
By Frank Legato
When multi-line video slots began appearing in the penny denomination, many players with low gambling budgets rejoiced. A penny denomination, for them, meant the ability to experience all the bonus features, wild symbols and flow of the reel-spinning without breaking the bank.
It wasn’t long, though, before penny slots became expensive. In fact, viewing it from the perspective of someone who enjoys the old three-reel mechanical games, penny slots are more expensive than dollar slots.
And I’m not just talking about the dismal payback percentages of multi-line penny games. But let’s start there.
Multi-line video slots first appeared in the U.S. in the mid-1990s. The first games in this genre came from Australia’s Aristocrat, so many referred to them as “Australian-style” slots. Called “pokies” Down Under because all the lower-level winning combinations involved poker symbols, they appeared at a time when the vast majority of slots offered three reels, and a single payline, three paylines or at most, five. The video screen on these new games displayed five reels, with an unheard-of nine paylines at first.
This enabled something not seen for decades in the U.S.—nickel slots. Covering all paylines on those early games required a bet of only 45 cents per spin, with a lot more action than offered by the nearly extinct nickel reel-spinners.
Around the same time, bill acceptors and credit play made the game a lot faster. However, these factors also caused a problem: payouts were still in physical coins, and the coin hoppers invariably emptied before dispensing those hundreds of nickels.
It wasn’t long before that problem was solved by ticket-in/ticket-out technology. Now, manufacturers could offer as many paylines as they wanted, and bets of as many credits as players could afford. Penny denominations soon followed, and players loved them.
Slot-makers abided this love by launching more and more penny games, with a collection of special bonuses and other features that kept players in their seats. However, operators—particularly after the Great Recession of 2008-09—became stingy with these games, and lowered the payback percentages, known as “return to player” or RTP in the trade.
Before long, penny slots offered the lowest returns on the slot floor. Because the game play and multiple features kept players involved, they kept playing them, even with RTP of 90 percent, 88 percent and lower. Manufacturers churned out ever more penny titles, players flocked to them, and the player returns stayed the lowest on the floor. At first, many players justified this with the fact that they enjoyed playing the games without having to bust their gambling budgets. That benefit was destined to all but disappear as the number of paylines rose to 20, 50 and more, and the wagers required to play the games increased along with the paylines.
Many of these games offer larger rewards for larger wagers, including a significant number in which the player is required to bet the maximum to qualify for the top jackpot—usually an enticing, life-changing progressive. While a max bet on those old nine-line games was maybe $2.25, the penny slots nowadays typically require 500, 600 or even 1,000 credits as a max bet.
So, to qualify for those big jackpots, you’re betting $5, $6 or $10 per spin on a game that returns perhaps 88 percent of wagers to players as wins. The traditional three-reel mechanical slots were (many still are) two-coin and three-coin games. Those traditional games in the dollar denomination typically return somewhere around 95 percent to players, for a $2 or $3 max bet.
Do the math.
I’ve spoken to many players who love the penny slots, and most use a similar plan—they want to wager a lot so they get the big jackpots. Many start out wagering the max, only to quickly lower their bets as their credit meter dwindles. I’ve heard frustration expressed from landing a big win with a low wager: “If I’d only bet the max…”
I get why players love the games, I really do. The slot manufacturers place their most popular games out in the penny denomination. Players go for the familiar themes, the pot-collection features, the hold-and-spin bonuses, the high-definition graphics—these are fun and exciting games to play when compared to traditional slot machines. But here’s a message to the slot manufacturers and operators:
Players love playing the pennies, so make it affordable. That low payback percentage— and thus high house advantage—is being tolerated because people have a lot of fun playing them. They should be able to play them for less than $5 a spin and still get the maximum enjoyment of all the features. Capping the max bet at $2 or $3 would not make the house edge any lower, and it would make these popular games affordable to everyone.
Personally, I still love the old style of games. I love to outlast a lower house edge by landing multiplying wild symbols, “7” wins, triple bars and other high-paying combinations. And the price point, at $3 a spin, is more than fair.
That’s not to say I don’t like the new penny games. They’re definitely a lot of fun, but the price is getting a little out of hand. Fun shouldn’t cost this much.
