How Casinos Make Money By Using Math In Slot Machines

It may come at a surprise that slot machines are the main income stream for casinos, at least in the United States, accounting for up to 80% of their revenue. In Las Vegas, this rate ranges from 50% in casinos cater to high rollers, who bet thousands of dollars each time, and 88% in the places for locals.

Each day, what people put in slot machines can amount to millions of dollars, and casinos are making big from them, with the help of mathematics.

There is nothing complicated in a slot machine. Players put in money, pick a particular amount, press the button, and wait for the luck. Slot machines come in a wide range of variety nowadays, from the models with actual spinning reels to the ones with virtual reels displayed on the screen. But no matter which form they appear in, all of these machines are played in similar ways.

For most people, slot machines are the game of pure luck; this is why it is appealing to many people. If you are lucky, you may win more than someone who has been playing for twenty years. And all of us have had the feeling of luck sometimes in our lives.

Slot machines might never bring players any benefit, but they are a stable income stream for the casinos, as long as there are enough people play them. The key here is the game math.

When casinos check on slot machines, what they look for first is the drop, which is the amount of money players deposite in the machines. Another critical number is handle, which is the total amount a player put in. For example, if player deposits $100, win $50 jackpot, and keeps playing until she loses all of the money, the drop here is $100, and the handle is $150. The casino's revenue is what left after the jackpot is paid out.

The question here is how slot machines decide who loses and who wins? The answer here is that payouts are calculated statistically. Each slot machine has a random number generator, which is activated after the player presses the pin. The generator is essentially an algorithm deciding the current pin is a loss or a win, as well as how big player will win.

Every game has a paytable and a set hold percentage that determine how much the game pays back and how often players can expect a jackpot.

Video poker and other games with low volatility have a higher chance of winning, but they will pay back in smaller amounts. Games with high volatility like Megabucks are the exact opposite, players can win fewer times, but the jackpot can reach several million dollars.

If players come to a slot machine relying on pure luck, there is no chance for them at all as the casino is the one that holds the statistical advantage. The underlying math of the game makes sure that casinos have a consistent number of win.

However, casinos must give players one thing to keep them coming back, or these gambling houses may go out of business. It is required by law that slot machines return a set minimum amount to players. In Las Vegas, the rate is 85%, but most of them return more.

Those who have lost a lot may find relief in the 85% chance of return. Who knows, you might be in luck next time. That is the exactly why slot machines are so appealing.

While players do have the chance to win, and sometimes win big, in the long run, luck, or math, will always favor the casinos.

So in short, no matter how lucky you are, math will ensure that the casinos get luckier.