Casino slot machine payback rates can vary a great deal however they are governed by three main requirements. The first is that local governments set the payback rate. This is done at usually the state level in the US and the provincial level in Canada. In some locations, it is as high as 88%. The lowest rate is 85%! What does this really mean? For every $100 you gamble, patrons can expect on average to see a return of only $85. While some may appear to pay out much more than this amount at times. The average will always be 85%.
Slot machine technicians set the payout rate. It cannot be varied without written approval from the gaming authority in the state. Random number generators determine the payout rates. Further programming limits the payout to 85% or higher. Depending on other factors which we will discuss in the next section. Rest assured that the casino will always get its share of the bet on average every time. There are two other pressure points that will govern the average payout actual rate. Profit, politics and local programs that may benefit from transfers of retained earnings to the city or county.
Every casino is in the business to make a profit. The amount they can get away with in terms of payout really depends on the local competition in the areas. If the same owner owns them all, there is really no competition. They like to pretend that there is a competition between the several casinos, but there really isn’t. A casino will gauge the market and set the payback rate accordingly usually in the range of 88% to 92%.
The other factor that will influence the slot machine payback rate is the agreement that casinos have with local government. Many cities will receive a portion of the proceeds. This puts a lot of pressure on casino operators to generate revenues to pay this additional tax.
An additional layer of expense is added when a casino is sold. The new owners must pay the additional interest charges. It subtracts directly from the number of funds held back from payouts. Casinos can lower the payout or push volume or both to generate sufficient slot machine payback. Recently there has been a lot of pressure on casinos to increase profits. Paybacks have been declining, much to the distress of gamblers.
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