John Grochowski

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Changing the expected payback percentage on any one slot machine remains a time-consuming process for the most part.

Yet overall payback percentages on slot floors evolve, and in some cases change dramatically in a short time.

A reader emailed recently to say the returns at the casino where he plays most, paybacks had dropped from 92.5 percent to 90 percent within a few months.

If it’s such an arduous process to change each machine, how could such a large change come about so fast?

It can happen without tinkering with return on any one game.

Examine the possibilities:

**The casino may have had a change in marketing goals and decided to emphasize penny slots or other low denominations.

Higher denomination slots such as quarter and dollar games usually have higher payback percentages than lower denominations.

Let’s try a simple example. Imagine a casino with 1,000 slot machines, where 50 percent of dollars wagered was on penny slots returning an average of 88 percent and 50 percent was on dollar slots returning 95 percent. The average payback on that slot floor would be 91.5 percent.

Now let’s say casino execs decided the area most likely to grow business was penny slots, so they removed a large share of dollar slots and added more 1-cent games. In doing so, they created a slot floor in which 90 percent of dollars wagered were on penny games and 10 percent on dollars.

The paybacks on pennies were still 88 percent and remained 95 percent on dollars, but the overall floor average decreased to 88.7 percent.

Real casinos have more slot denominations attracting their own player niches, but the basics are the same: Increasing the percentage of low-denomination slots will decrease the overall floor average.

Casinos have to know their clientele and not create an unplayed glut of low-denomination games while failing to meet the demand of bigger players. But the balance of high and low-denom games is a major factor in the overall payback percentage in any casino.

**Less likely, but possible nonetheless, is that the casino could be replacing older games with new ones of the same denomination but lower payback percentages.

Dozens of new games come out every month, and casinos cycle low-performing games off their floors. It could replace old 88-percent penny games with 86-percenters, 90-percent nickels with 88s, and so on.

The process would be spread out over months and wouldn’t have as immediate an impact as quickly turning high-denomination space over low denominations. It also creates the risk of ill will among regulars who notice with repeated play that they don’t win as much as they used to.

**Random fluctuation can play a role.

No slot machine pays exactly the same percentage every month. Over hundreds of thousands or millions of plays, the odds of the games will lead toward a target percentage, but in the short term results will vary.

On a slot floor with hundreds or thousands of games, the payback variation on one machine will be buried in an avalanche of data, so random fluctuation should’t have a large overall effect.

However, a month with a larger than usual number of huge, lifestyle-changing jackpots can show up in an increased overall casino average payback, while a month where the big ones don’t hit at all can bring an reduced floor average.

All these factors can be contributors, but greater emphasis on lower denominations games usually is the largest factor. When you see a sustained drop in a casino’s average payback, that’s the first place to look.

Look for John Grochowski on Facebook (http://tinyurl.com/7lzdt44) and Twitter (@GrochowskiJ).

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