Slot Machines and How Casinos Make Money When Slot Machines Are Played 

Sarah Swanepoel

When I worked security in an Atlantic City casino, patrons frequently inquired about the slot machines by asking, “Which slot machine is going to hit?” My usual response was to say, “If I knew that, I wouldn’t be working here anymore,” followed by a smirk of amusement at my own ingenuity. This was my standard response. You could always count on the other person to crack at least a smile when you were around.

In casinos located all over the United States, the component that consistently contributes the most to the establishment’s financial success is the slot machines. The revenue generated by slot machines accounts for anywhere from 65 percent to 80 percent of the total revenue generated by casinos across multiple states.

In Las Vegas, the ratio ranges from 88 percent in casinos that cater solely to locals to fifty percent on the Las Vegas Strip, where high rollers who bet tens of thousands of dollars per hand skew the results in favor of table games. In casinos that serve only locals, the ratio is 88 percent. In other words, the ratio can range anywhere from 88 percent in casinos that are exclusive to locals to fifty percent on the Las Vegas Strip. Players place wagers totaling millions of dollars every single day on slot machines. Why?

Slot machines are so popular because they involve an element of chance, which is what draws in a large number of customers. You have the same chance of winning at a slot machine as someone who has been playing for twenty years as long as you know how to put money into the machine and press a button. Chance is ultimately what determines the outcome of everything. And who among us does not, on occasion, experience feelings of good fortune?

Slot machines are extremely common in casinos because they can generate a steady stream of income for the establishment so long as there are sufficient numbers of people using them. I had the opportunity to speak with Bob Ambrose, who began his career in the gaming industry in the early 1980s at the Tropicana Atlantic City.

Presently, he works as a gaming consultant and also teaches casino management at Fairleigh Dickinson University. He was kind enough to explain why these methods are so reliable for casinos, and I am grateful to him for doing so. He explains it by saying that “it’s all about the arithmetic in the game.” “The math game is the most important part of this.”

The “drop” is the single most important indicator that is taken into consideration when gambling establishments evaluate the performance of slot machines. This is the total amount of cash that the player has wagered across all of the available games. Another statistic that you might hear is referred to as the handle.

According to Ambrose, the total amount that a player wagers is referred to as their “handle.” How does it work that a player can win more money than she initially deposits? She will have generated a $100 drop and a $150 handle if she wagers $100, wins the jackpot for $50, and then continues to play until all of her money is gone (including the $50 she “earned” from the jackpot).

The amount of money that is still in the machine after the casino has paid out all of its prizes constitutes the casino’s win, which is also referred to as revenue.

How do the slot machines choose who gets a prize and who goes home empty-handed? Ambrose claims that the payouts for slot machines are determined by statistical analysis. When you press the button labeled “Spin,” a function is known as the Random Number Generator (RNG) is activated.

This algorithm determines whether or not a win occurs after each spin, as well as the amount of the win that occurs. According to Ambrose, each game possesses a predetermined hold percentage in addition to a pay table that specifies how frequently and how much players can anticipate the game to pay back.

Games with moderate volatility, such as video poker, pay out more frequently but in smaller amounts. Games with high volatility, such as the Megabucks progressive, have fewer but significantly larger hits. Video poker is an example of a game with moderate volatility. One example of a game that has a moderate amount of volatility is video poker (imagine hits of several million dollars at maximum).

Playing a game with a lower level of volatility will, as a result, typically buy you more time, even if the potential payout from a game with a higher level of volatility is greater. This is because lower levels of volatility are associated with lower levels of risk. This is because the level of volatility will determine the degree of uncertainty that is associated with the outcome.

When playing a game in which the outcome is dependent entirely on the whims of chance, is it even possible to emerge victorious? No, if I’m being completely honest with you. In situations involving gambling, Ambrose maintains that “the casinos have a statistical advantage over the players.” The game’s mathematical foundation ensures that casinos will make a consistent profit regardless of the amount of money that is wagered.

If slot machines never dispensed any rewards, patrons of casinos would stop gambling there, which would eventually result in the closing of those establishments. Slot machines are required by law in most countries to hand over at least a certain amount of money to the winners of those machines. The amount that must be given out varies from country to country.

The manager of the casino is in the same position as the slot player who is trying to win the jackpot. Both are competing for the same prize. Both are currently in the identical position. As a result of his investigation, Ambrose comes to the following conclusion: “The player must have an equal opportunity to win.” On the other hand, the advantage enjoyed by the house ensures that, in the long run, the gambling establishment will always emerge victorious.

It is essential to keep in mind that regardless of how fortunate you feel you are, the casino will almost always turn out to be luckier in the long run. This is true even if you believe you have a good chance of winning.

Sleeping comes so naturally to me that I can do it with both of my eyes closed.