How Do Slot Machine Payouts Work

Pick the Highest Paying Slot Machine for Maximum Payback Potential

Many players know all too well about the concept of high-paying slots and low-paying slots. These are not misnomers or fallacies; they are real-life realities. For example, there are slot machine games that are notorious for low payout rates, while there are other slots games that have significantly higher overall payout rates, usually owing to higher coin denominations required to play those slot games. You often hear the terms house advantage or house edge being used interchangeably when it comes to odds in casino games. However, when we are discussing slot machine games the term that is used by operators is payout percentage. It is essentially the same concept, but it is viewed from a different angle. If you want to know what the basic definition of a payout percentage is, it is simply the house edge subtracted from 100%.

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You may be playing a slot machine game with a payout percentage of 96.75%. What this means is that for every $1 that you wager in that slot machine game, the house will win $0.0325 in the long-term. While this does not sound like a substantial sum of money for a casino to be winning, it is enough to keep the casino functional and providing you with fantastic slot machine games, casino table games and card games. If you're playing a card game like VIP blackjack, you may notice that the game has a house edge of 0.5%. What does this mean? Simply put, the casino or online casino that you are playing at will win back 0.5% of every wager that you place while you're playing blackjack. If you wager $10, the casino will win $0.05, and if you wager $100, the casino will win $0.50 over the long-term. Everything that we discuss with payback potential, payout percentages and the like is viewed over the long-term. In the short-term however, anything is possible and players can win substantial sums of money over multiple sessions of gaming. We all know however that finding a slot game with a payback percentage upwards of 98% is highly unlikely, given that these games are simply not designed that way. The skill-based element inherent in games like blackjack, video poker and Texas Hold'em poker naturally lends itself to a much higher payback percentage.

RNGs and Slots Payouts are linked

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The concept of a random number generator is one that needs further illumination in order to understand how slots payouts work. For the purposes of discussion, a random number generator simply randomizes the outcomes of slot machine games. The random number generator (RNG for short) is a computer program that has been designed and independently tested by third-party authorities affiliated with regulatory bodies to ensure the fairness and randomness of all outcomes. It is important not to confuse the purpose of an RNG and that of the casino’s payout percentage rate. These are two completely different aspects and they are for the most part unrelated to one another.

The casino is responsible for establishing its payout combinations to ensure that it remains profitable. The RNGs feature stops for every combination and every reel, but the payout for any combination hitting is determined by the casino. If you have for example 20 stops which each have an equal possibility of hitting over 3 reels, the calculation would be as follows: 1/20 X 1/20 X 1/20 equals 1/8,000 of all 3 spinning reels to land on a specific stop. Now the actual casino may have a payout for that combination of just 75:1 or 100:1 for example. This brings us to one of the most important aspects of slot machines and casinos: the payout is always less than the odds of winning. Can you imagine if the casino paid out 8,000 times if you hit 3 stops on 3 reels?  The number of times that a slot machine will result in stops will vary from one machine to the next. On one game you may find that it comes up once every 12 spins and on another every 64 spins. And a particular set of symbols may offer you a payout rate of 65 to 1 but on another you may get a payout rate of 2,500 to 1 – it really depends on the individual slot machine game in question.

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When you're playing slot machine games at an online casino, perhaps even at a land-based casino you should bear in mind that the proximity of games has nothing to do with their payout percentages. One game may pay out at a rate of 85% while the other game may pay out at a rate of 95%. The only way that you will know which machine offers the better payout is by actually navigating to the paytable, or clicking through the information button associated with that particular slot machine game. This information is typically found at the bottom of a detailed set of data where it will reveal something like RTP and then the payout percentage. All slot machine games have negative expectations, meaning that over the long-term you will lose money playing them. However as a player your objective is to have fun over the short-term with bursts of play over several gaming sessions. The allocation of a budget ensures that you only play for a set period of time with a specific bankroll in mind. The pace at which you win or lose money is determined by the RTP.

The lower the return to player percentage, the quicker your bankroll will be depleted and vice versa. This brings us to the short-term versus the long-term in slot machine games. The short run or the short-term is not quite a short as you think it is. It could be a single session or it could be multiple sessions spanning weeks or even months. The fact of the matter is that the payout percentages on slots games are calculated over millions and millions of spins – and you're probably unlikely to ever play that many slot machine spins in your lifetime. So, anything is possible when you are playing slot machine games. You may find that you win a substantial sum of money and defy the RTP and payout percentages over the short-term or even the medium term. Or, it is entirely possible that in the short-term you will lose a substantial sum of money – that is the beauty of randomness when it comes to slot games. You could win a fortune on your very first spin.

What is typical when it comes to payouts and payout percentages?

There is no hard and fast rule when it comes to determining a standard in payouts and payout percentages with slot machine games. However, if we look at individual states across the United States there are certain rules that slot machine operators abide by. In Nevada for example, the minimum payout that a slot machine operator has to employ in its games is 75%. This means that for every $1 that you wager, $0.75 must be returned in the long-term. Again, the long-term is a theoretical concept which nobody is likely to ever reach anyway. However the higher the number, the better it is for the player.  In states like New Jersey for example, the payout percentage – the RTP – is significantly higher at 83%. But things get a whole lot more interesting when we consider the overall percentage payout at online casinos such as Casino Cruise.

A standard online casino will have slot machine payout rates in the region of 95% – 98%. And the reason why these payout rates are so much higher than land-based casinos is a result of lower fixed costs of operations. Since everything is online, there is no need to maintain slot machines, no need to employ scores of personnel, no need to rent facilities other than servers, etc. Another important thing to bear in mind is PARS. This is essentially a payout probabilities table known as Paytable & Reel Strips Sheet. Slot machine players will typically not have access to things like this, but it is something that is important in the industry and is known to the casinos themselves. Many players believe that slot machine games which offer higher payout percentages will pay out more, but this is once again also open to interpretation. Since the actions of random number generators are divorced from the payout percentage rates, it really comes down to good fortune when you win and when you lose.

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Licensing and regulation

Genesis Global Limited is incorporated under the laws of Malta (C65325) at registered address 28, GB Buildings, Level 3, Watar Street, Ta’ Xbiex, XBX 1301, Malta. Genesis Global Limited is licensed and regulated by the Malta Gaming Authority with licence number MGA/B2C/314/2015 issued on the 5th August 2016 and also by the British Gambling Commission with account 45235. Gambling can be harmful; our Responsible Gaming page helps you to stay in control.




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