Are Slot Machine Payouts Declining

Whether you have noticed or not, the answer to the question, are slot machine payouts declining, is yes. Reports suggest that payouts in the industry have declined. Known as slot hold, the percentage has increased to 6.4% on average. Average amounts wagered by gamblers declined. Yet revenue from slot players has increased as a result because the slot hold increased at the same time.  Many gamblers are staying away because of the perceived tightening of the slot payout.

Are Slot Machine Payouts Declining

Applied Analysis examined the casino markets of 16 states, including Nevada. The report they prepared found that the amount gamblers wagered and the revenue casinos earned from slots declined by double-digit percentages between 2007 and 2014. Slot hold is the amount that casinos keep from every dollar wagered. At the same time, slot hold percentage increased 6.2 percent.

Some states diverged from the overall trend. Most notably, Florida’s hold percentage declined from 9.5 percent in 2006 — when slot machines began operating in the state — to 6.41 percent in 2014, according to the report.

Nevada has much more competition and the results suggest better payouts overall. Nevada’s 6.4 percent slot hold last year was higher than it was when slot revenue peaked in 2007, but it was still the lowest of any state examined in the report.

Generally speaking, casinos that are in highly competitive locations such as Vegas have better payouts. Reports suggest that old Las Vegas or downtown, typically will pay out better returns, sometimes as much as 3% more than the strip. Averages suggest the strip pays out around 90% to 91%, while downtown is more competitive with approximately a 94% payout rate.

For more thoughts and ideas about slot machine payout ratios, click here.