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Introduction to Slot Machine Payout Returns

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So, imagine you’re playing a slot machine. How good is it? Are you winning anything? Losing? Do you know how well your slot machine performed last month or last year? What about the casino: How well did slots enthusiasts perform there last month or last year? Each of these questions is centered around a single concept I’ll be discussing in this post: slot machine payout returns.

As I’ve been discussing in other blogs and podcast episodes, one way to improve slot machine gambling performance is to better understand:

  • Slots History;
  • Existing and Emerging Gaming Technology; and
  • Ongoing Development of State Gaming Regulations.

To provide a better understanding of slot machines for each of these slot-related areas of knowledge, this post highlights slot machine payout returns. This post has the following sub-sections:

  • Introduction
  • The Importance of Slot Machine Payout Returns
  • Slot Machine Payout Returns and Bankroll Cycling
  • Theoretical Slot Machine Payout Returns
  • Actual Slot Machine Payout Returns
  • Extremes of State Gaming Requirements
  • Summary

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The Importance of Slot Machine Payout Returns

Let’s examine the importance of slot machine payout returns. Note that returns is plural. This is due to there being two types of payout returns: theoretical and actual.

Theoretical return is an electronic setting for the slot machine. Actual return is what was recorded once the machine had been played for some period of time. I’ll be describing both of these returns in the next few sections.

Beforehand, let’s focus on the importance of slot machine payout returns. A lot of slots enthusiasts use the term “loose” and “tight.” These popular terms are entirely about slot machine payout returns. Loose slot machines means it has higher payout returns, while tight slot machines have lower payout returns.

“Our slots are the loosest in the state!”, some casinos advertise. But, what does that really mean? If they are being truthful in their marketing, which is possible, then they are saying that their slot machines have either the highest theoretical and/or actual payout return percentages of any other casino in the state.

It is possible that such marketing is truthful due to the constant oversight of all casino activities by the state gaming commission. Loss of the casino’s gambling license might well result from untruthful marketing.

However, despite this protection, that doesn’t mean you can’t be tricked. For instance, perhaps it’s the only casino in the state. Or, perhaps it said “#1 in jackpots in Cincinnati”, when it’s Cincinnati’s ONLY casino!

The importance of slot machine payout returns comes down to an understanding for slots enthusiasts of both what is possible, determining the highest baseline returns of any available casinos, and comparing their gambling performance to others.

A later section will be about both what is possible due to state gaming regulations as well as how some states require public reporting of payout returns. In the next section, I’ll be covering how to use payout returns to provide insight into your own slots gambling performance.

Slot Machine Payout Returns and Bankroll Cycling

Each slot machine has both a theoretical as well as an actual payout return, usually given in percentages. A term similar to slot machine payout returns is hold percentages. Hold and Return can be related as follows: Hold% equals 100% minus Return%.

In essence, payout return is the amount of money won divided by the amount of money lost during a gambling period. These gambling periods might be for a single session of play at a casino, over the course of a month of gambling, or even for a full year.

As you might imagine, an electronic record is kept for each slot machine’s performance. This record can be used by the casino operator to understand actual performance versus planned performance of the slot machine. Other statistical information can also be gleaned, if desired, such as the performance of groups of slots machines as well as the overall casino property.

Typically, payout returns are only discussed in terms of slot machines. It isn’t practical to have this information in terms of a player. Why? Because this statistical information is only useful if there is a lot of data, and even the most ardent slots enthusiasts doesn’t play much when compared to groups of slot machines at a casino.

Besides not having data lakes of statistical information, slots enthusiasts have no practical way in which to collect the amount of each individual bet along with its outcome. Doing so would require using some kind of electronic “gaming tool” device, which is typically strictly illegal in most U.S. states.

What is important for a slots players is to record their overall performance, including date, gambling establishment, bankroll, and any winnings. As previously mentioned, I’ll be detailing gambling recordkeeping in an upcoming post. But, for now, a player’s actual payout return can’t, in general, be accurately calculated by winnings divided by bankroll due to bankroll cycling.

In the busy casino environment, and adhering to the restriction on using an electronic gaming tools, there is a simple way to keep track of a player’s payout return. I use it all the time, in part to keep track of when I’ve spent my original bankroll amount. Knowing when this happens, when the first cycle of a bankroll ends and the second begins, can be difficult to guess. So, don’t guess. Count!

When you put some or all of your bankroll into a slot machine, note how many credits that is. You’ll need to remember that number of bankroll credits for later. Then, as you play, keep track of how many credits you’ve bet. When credits bet equals the original bankroll, you’ve completed your first bankroll cycle.

Next, how many credits remain in the machine? Divide this by the original bankroll credits to get the player’s return. If you’ve won more than your bankroll, this return will be over 100%. If less, than the return is under 100%.

Time for a couple of caveats. First, don’t spend your bankroll on that slot machine if you’re not winning anything. I usually try to let the machine run for 15-20 bets before making a decision about whether or not to continue of that slot machine, but sometimes stop earlier if I’m seeing absolutely no wins.

Second, you may not win back your entire bankroll. For most slots players, this is highly typical. This is where the tough decision lies. If you’re winning a little, are you winning enough? This entirely depends on your own gambling goals.

For entertainment gamblers, the bankroll brought to the casino is essentially meant to be spent on entertainment. For those trying to earn maximum comps, bankroll cycling is the best way to earn comps. But, will it cycle as many times as needed if the bankroll at the beginning of each cycle significantly diminishes?

For maximizing take-home, is enough bankroll cycling occurring to give the slot machine enough time to play such that a bigger jackpot becomes more likely?

Theoretical Slot Machine Payout Returns

Each slot machine has a theoretical hold percentage or, when subtracted from 100%, a theoretical return percentage for the casino. The expression payout return is often used, but those two words is redundant. A return from a casino is actual the same as a payout.

Slot machine manufacturers design the electronics of slot machines to have a range of possible or theoretical payout percentages, from which casino operators can select as needed.

In general, slot machine manufacturers don’t share how this is accomplished, not specifically. But, they don’t really have to. It’s done in the usual ways. As the saying goes, and with all due respect to slots manufacturers, it’s not rocket science.

One enterprising individual has created a YouTube video about how theoretical odds are selected after opening a slot machine. How was he able to do this? He personally bought a slot machine, then created a video of how to do it using the equipment manual from the slots manufacturer.

While I have most recently been unable to re-locate that specific YouTube video, so will have to explain it here. If anyone locates it, please comment with a link on this post. In it, he showed that there were 6 theoretical hold settings possible to encode into the machine.

Further, he explained that the highest setting made almost every bet a win. And, for the lowest setting, any winnings at all were quite rare.

If the hold percentage is high, meaning that the casino retains a relatively high amount of the players cash-in over time, then the player considers the slot machine to be “tight”. If the hold percentage is relatively low, so less of the player’s cash-in is lost to the casino, it is considered a “loose” slot machine.

Slot machine manufacturers and casino operators do not make hold or payout percentages of specific slot machines available to the public, naturally enough. And, with technology marching forward as it tends to do, the number of settings has likely increased somewhat alongside adding remote access to adjusting the odds electronically.

This assumes any such changes in technology have been approved, as required, by the gaming jurisdictions into which they will be installed. This tends to not be a fast process, and has slowed down the advancement of new gaming technologies to something which, in my opinion, is almost manageable.

So, a set of theoretical slot machine payout returns is provided by slots manufacturers to their customers. At any given time, a casino operator selects one specific theoretical return setting.

This setting, however, must first be determined by the casino operator, who evaluates it for both desired casino performance metrics as well as for complying with their gaming jurisdiction requirements.

What I think is interesting about theoretical slot machine payout returns is how they are different from any other game available at a casino. Roulette, craps, and any card game is based on rules. These rules, which are provided to any player of the game, very specifically define the odds of winning.

Therefore, websites like Michael Shackleford’s The Wizard of Odds can exist to provide those various odds of winning to a fair degree of accuracy by simply calculating them. They are not perfectly accurate, but they are certainly, as usual for these sorts of calculations, “good enough” for this application. Again, it isn’t rocket science, folks.

My point here is that most games in casinos have known odds of winning, to a high degree of accuracy, and slot machines do not. For slot machines, the odds of winning are never known outside of a very few employees at casinos, and they’re not sharing due to serious legal ramifications if they were to do so.

So, without theoretical slot machine payout returns being available to slots enthusiasts, what are we to do? What we do is take a close look at any available actual slot machine payout returns that might be available to us.

Actual Slot Machine Payout Returns

Actual slot machine payout returns are the results obtained from playing slot machines. The theoretical payout return is just that: theoretical. Statistical variation around that setting is expected, which is why actuals are important.

I’ll put this another way: First you plan (theoretical), then you see what happens (actual).

Some level of actual slot machine payout returns can be gotten in 5 different ways. I’ll go over each of these sources of information. They are:

  1. Looking at one’s own performance;
  2. Historical performance as noted on a specific slot machine;
  3. Analyzing the performance of many slot machines;
  4. Public posting of payout returns in various online forums and groups; and
  5. Public posting of actual payout returns by a gaming jurisdiction such as a U.S. state government.

A strictly limited amount of actual slot machine payout returns can be known based on your own performance, as mentioned in the prior section on bankroll cycling.

This set of data is what is known to statisticians as a relatively small sample size, which is of limited usefulness. Yet, it’s not completely useless!

Another way actual slot machine payout returns can be known is if they are provided by the casino to the player. At some casinos, the amount and times of taxable jackpots from within the last week may be posted on the side of slot machines.

I’ve seen this done at Horseshoe Casino Southern Indiana. However, this practice of posting a machine’s jackpots on the side of that machine is very casino specific and is not typically available.

A player will need investigate if doing so occurs at any casinos they visit. Also, these posted jackpots are for only taxable jackpots, jackpots over $1,200.

With an extraordinary amount of time along with a huge financial investment, it would be indeed possible to fully map out the payout percentages of a single slot machine.

Keep in mind that each slot machine has several possible payout percentage settings available to it, which complicates both performing this procedure as well as successfully using that extensive information afterwards in an advantageous manner.

Simply put, it is a highly impractical strategy given vast amount of money required as well as the lengthy time involved betting, recording each result, and post-processing the results.

Further, doing so provides only an understanding of a machine’s settings at that time, and ignores potential changes to those settings that may be instituted by the casino immediately following that data collection period.

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Online forums and gaming magazines publish payout percentages for players interested in finding supposedly “loose” slot machines. If reviewing such sites, be careful to ask and look for the source of this information.

As usual, a player needs to trust their instincts. I’m certainly not the first person to say this, but… if it seems too good to be true, then it probably is.

From a high level perspective, let us consider that there are only four possible sources for payout percentages of specific game themes. These four sources are:

  1. employees of game manufacturers;
  2. employees of casino operators
  3. extensive player statistics; and
  4. outright guesswork with no real value.

While three of these could potentially provide accurate information, two of those would have to have been obtained illegally. So, be wary of public forums and groups trying to provide you with slot machine payout returns, especially if a payment is required. I’d be very, very cautious unless you can confirm that the information has been obtained directly from a gaming jurisdiction such as a U.S. state gaming commission.

Finally, there are actual slot machine payout returns obtained from a gaming jurisdiction, which they have because of their legally established gaming regulations. Put another way, casinos provide these statistics when gaming jurisdictions require them to do so.

At the time of this writing, I’ve published 40 posts on slots-specific gaming regulations for the 56 U.S states, territories, and federal district. I’m writing them weekly, and proceeding through them alphabetically. I’ve currently at Oklahoma, with both Oregon and Pennsylvania to be published within the next two weeks.

These state-by-state reviews of slot machine casino gambling are available on my website as an online resource for slots enthusiasts. A summary article, Slot Machine Gambling, State-By-State: A Weekly Blog, has weekly updated links to each U.S. state, territory, and federal district as the next blog article is posted.

Myths of Slot Machine Payout Returns

As previously mentioned, theoretical slot machine payout returns are not known except to a few employees at casinos. This lack of knowledge has, as is often the case, generated quite a few myths. I talk about a few of these myths next, and provide a few reasons why some of them may or may not be true.

One myth often said is that it is a good rule of thumb for players that slots with higher denominations tend to have a higher payout percentage. The best way to analyze this myth is to look at the six state gaming commissions that provide actual payout statistics for slot machines with different denominations.

  • Colorado: The highest slot machine payout returns appear mostly centered on $1 slots, with the lowest returns entirely on penny slots;
  • Connecticut: Slot machine payout returns mostly increase with denomination all the way up to $100 at Foxwoods, but peak at $25 before decreasing at higher denominations for Mohegan Sun’s slot machines;
  • Louisiana: The lowest slot machine payout returns across all four of Louisiana’s gaming regions are for penny slots. Otherwise, two regions peak at 5-cents and two regions peak at the maximum $5 denomination;
  • Mississippi: Two of Mississippi’s three gaming regions have slot machine payout returns that peak at the 5-cent denomination, while the third peaks at the maximum $5 denomination;
  • Nevada (listed separately for multiple locations), and
    • Lake Tahoe, North Shore: Peaks at the maximum $1 denomination, but penny slots have the second highest;
    • Lake Tahoe, South Shore: Steadily increases to peak at the maximum $1 denomination;
    • Las Vegas, Boulder Strip: The highest return is for the 25-cent denomination;
    • Las Vegas, Downtown: The highest return is for the $1 denomination non-Megabucks slot machines, with the lowest being the $1 denomination Megabucks slot machines;
    • Las Vegas, North Las Vegas: The highest return is for the 25-cent denomination
    • Las Vegas, The Strip: The highest return is for the $1 denomination, with the second highest for the 5-cent denomination;
    • Laughlin: The highest return is for the 25-cent denomination;
    • Reno: The highest return is for the 5-cent denomination;
    • Sparks: The highest return is for the maximum $5 denomination; and
    • Wendover: The highest return is for the maximum $5 denomination.
  • South Dakota: The highest return is for the 5-cent denomination.

As shown, almost exactly half of the locations that provide denomination-specific slot machine payout returns show maximum denomination machines have the highest return. However, the other half do not show this. However this is interpreted, it is safe to say that maximum denominations having the best payout return is not a very good rule of thumb.

Another myth also considered to be a good rule of thumb is that the more active a bank of slot machines are, the higher the payouts tend to be. I know of no way to prove or disprove this rule of thumb with state-provided statistical data. However, I will point out that the actual saying doesn’t make logical sense or, more specifically, doesn’t provide a lot of value.

Why? Because of the two slot machine odds of winning, which again are: 1) if you win, and 2) how much you win. Based on this understanding of the odds of winning, a bank of slot machines that is actively providing wins is separate from how much is being won.

As is starting to become apparent to me, this myth is a slight misunderstanding of what is actually occurring. Whoever created the myth is on the right track, but hasn’t quite clarified it well enough.

The winning strategy this relates to, detailed above, is to try to continue to play slot machines which cycle bankrolls in the hopes of letting the slot machine run long enough to more likely generate a higher amount jackpot.

Players should keep in mind that these “good rules of thumb” are general trends, at best, and may not have much grounding in actual practices. In other words, be careful if planning to make extensive use of them.

Alternatively, send me your slot machines rules of thumb, and I’ll evaluate them for you. I’ll be your very own slots Myths Buster!

State Gaming Requirements for Actual Slot Machine Payout Returns

Some gaming jurisdictions such as U.S. states, territories, and federal district have made it a gaming regulation that casinos within their borders provide them with weekly or monthly actual slot machine payout returns. A few of them then provide this statistical data to the public.

To see if your state provides these statistics, or legal limits on slot machine payout returns, check with your state’s gaming control board. Alternatively, you can check the free online resource I’m building: A weekly state-by-state review of slot machine casino gambling for each U.S. state, territory, and federal district available at Slot Machine Gambling, State-By-State: A Weekly Blog.

In terms of slots history, I’ve compared the annual return statistics for states with casinos in both 2007 and 2017. While most states show actual return percentages to have dropped by as much as 1.5%, some states showed no changes while a very few states showed only slight increases.

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In addition, gaming jurisdictions can choose to set higher and lower legal limits on slot machine payout returns. The lower legal limits on slot machine payout returns are of the greatest interest, of course. However, this isn’t quite as easy as it seems.

Casino properties don’t often set these limits as low as they are legally allowed to, in part because it’s not good for business. Casino properties are very much aware that their business depends on having a good reputation.

If it becomes known as a place to lose money, whether or not this is actually true, such a blow to their hard-won reputation may have dire financial consequences.

Another reason is due to the nature of a theoretical setting versus an actual result. Casinos have to be careful their actual returns stay above the lower legal limit. Otherwise, their gambling license could be put at risk.

If they attempt to carefully keep their theoretical slot machines payout returns only slightly above the legal requirements, a short-term drop in actual slot machine payout returns near the end of the reporting period could potentially result in being non-compliant to state gaming regulations. That wouldn’t be good. That wouldn’t be good, at all.

Summary to Benefits of Slot Machine Payout Returns

In summary, how well slots enthusiasts perform is primarily centered around both the theoretical and actual aspects of slot machine payout returns. Slot machine payout returns are how much a player wins divided by how much is bet. It is how much a casino returns to a player as a percentage of the total amount a player bets.

These slot machine payout return percentages determine what is possible for a slot machine player to achieve over long-term play. This is typically calculated for a single slot machine.

Hold percentages, which is how much the casino keeps of the total amount bet by the player, are simply 100% minus return percentages.

Personal returns can also be calculated, but is practically difficult as well as problematic for individual players to either record or calculated based on their own play on every slot machine which they gamble on.

Slot Machine Payout Chart

Using the concept of payout returns, I provided a simple way to count bankroll cycles as a way to gain insight into individual slots gambling performance.

Theoretical returns are relatively unknown to anyone except for the slots manufacturers who design a set of possible settings to the casino that chooses one precise setting at a time. Actual returns are the financial results of slot machines from being played.

Further, using actual payout return statistics of state gaming control boards, I broke the myth that higher denomination slot machines have higher payout returns. Using 2017 actual payout returns, I showed that this phenomenon only occurred 50% of the time.

Another potentially mythical rule of thumb, that an active bank of slot machines have a higher payout return, was shown to be nonsensical from a logic point-of-view. This was done by explaining how slot machines have to independent calculations for determine the odds of winning:

  1. If there is a win; and
  2. The amount of that win.

Also, I’ve reviewed several different state gaming requirements for actual slot machine payout returns, so-called slot machine performance statistics. A 2007 to 2017 historic comparison was provided of actual payout returns between the same casinos 2007, where:

  • Most states showed a 1.5% drop in actual slot machine payout returns;
  • Some states showed no change in actual slot machine payout returns; and
  • Very few states showed slight increases in actual slot machine payout returns.

Finally, I went over some of the dangers to casino for non-compliance towards legal limits on slot machine payout returns. The danger lies in the fact that actual payout returns statistically vary from set theoretical values.

Casinos have to make sure their actual slot machine payout returns ALWAYS stay about the legal limits, but can only attempt this by carefully controlling theoretical payout returns for their slot machines.

Related Articles from Professor Slots

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By Jon H. Friedl, Jr. Ph.D., President
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