Slots

All slot machines in modern casinos use a random number generator (an “RNG) to determine the
results of each spin. An RNG is a tiny computer that does nothing but constantly generate numbers.
When you push the spin button, that microcomputer selects a number which determines the outcome.
In fact, this happens before the reels have even stopped spinning.

On modern slot machines, the reels are just there for show. From a practical standpoint, you could put
a quarter in a machine, push a button, and have the screen flash: “You lose!” or “You win $10”. The
mechanism that determined the outcome would be the same, but who would want to play a game like
that, especially if you know that the house has a mathematical edge over the player.

The spinning reels, the sound effects, and the bonus games are all there to make the game more
interesting to play. The chance of getting lucky and winning a jackpot is a real reward, too, but do not
ignore the other aspects of the game. The random number generator is programmed to pay back a
certain percentage of the money paid into it over a period. This percentage that is programmed into
these machines is always less than 100%. If a slots game were programmed to pay back more than 100%
of the money put into it, it would lose money for the casino.

Early slot machines were mechanical devices. They had three metal reels that had ten stops each. To
calculate the odds of a single symbol appearing on a reel, you just divide the one symbol by the total
number of potential outcomes. So, if you had one cherry on a reel, your odds of hitting that cherry were
1/10, or 10%.

To calculate the odds of getting three cherries, you multiple 1/10 X 1/10 X 1/10 and get 1/1000, or
0.1%. If the odds of hitting that symbol are the same as all the others, then you have 10 jackpots you can
win, which means that your chances of winning SOMETHING are 10/1000, which is 1%.

Most people would not play a slot machine that lost 99 times out of 100, though, so slot machine
designers added additional, smaller prizes for getting two symbols out of three for certain symbols. And
if they paid out less in prizes than the odds of hitting those jackpots, then those slots are guaranteed to
make a profit overall.

For example, if a prize for hitting three cherries was $1000, you would be playing a break-even game,
but if the prize were $750, it is easy to see how the casino would be guaranteed a profit. The difference
between the odds of winning and the payout odds is where the casino makes its money.

Modern slot machines use a computer program called a random number generator to determine the
outcomes of the various spins of the reels. This creates an imaginary reel with several symbols limited
only by the program.

A mechanical slot machine with 256 symbols per reel would be huge, too large to play, much less to
build. But a computer can create an imaginary reel with 256 symbols per reel and take up no more space
than an iPod Shuffle.

To make things even more interesting and entertaining, slot machine designers can program different
probabilities for each symbol to come up. Most symbols might come up once every 256 spins, but others
might come up twice as often, while still others might only come up half as often.
 This enables slot machine designers and casinos to offer slot machine games with far larger jackpots
than they were able to when they were limited by mechanical reels. And they can offer these large
jackpots and still generate a healthy profit.

The payback percentage is the amount of money that the slot machine is designed to pay out over an
enormous number of spins. This number is always less than 100%. The difference between 100% and
the payback percentage is the house edge, and that is where the casino makes its profits.

A simple example can help illustrate how this works. Suppose you have a slot machine with three reels
with ten symbols on each, and it only pays out when three cherries hit. The odds of winning that
jackpot, as we determined earlier, is 1/1000.

If we set the jackpot as $900, and charge $1 per bet, the payout percentage for that game will be 90%,
or $900/$1000. Of course, no one would play a slots game which only paid out once in every 1000 spins,
which is why there are various smaller payouts programmed in.

The house edge is a statistical measure of how much the house expects to win (on average, over the
long run) from every bet you make on a game. The house edge is a theoretical number that accounts for
the probability of winning versus the probability of losing AND the payout if you win. All casino games
carry a house edge.

If I say a game has a house edge of 4%, this means that over time, you should average a loss of $4 for
every $100 you bet on the game. This is a long run statistical average, though. In the short run, you are
unlikely to see results that mirror the house edge. The return to player and the payback percentage are
the same thing. The payback percentage added to the house edge always equals 100%. The payback
percentage is the amount of each bet that you get back, and the house edge is the amount of each bet
that the casino wins. Again, these numbers are on average over the long run. A game with a 4% house
edge has a 96% payback percentage.

I was playing a $1 machine, and my max bet was three coins, I was risking $3 per spin. 33 cents are 11%
of $3, which means my actual loss was 11%. The machine paid back 89% for the session. Does this mean
that the payback percentage for the machine is 89%? In the scheme of things, 450 spins are a small
sample size. To have any confidence in your statistics, you really need to have at least 5,000 spins under
your belt. Even then, depending on how volatile the game is, your actual results might be wildly
different from the mathematically expected payback percentage.

Theoretical payout percentages (or return to the player) for slots are the percentages of money the
players get back as winnings. Respectively, hold percentage is the remaining amounts money the house
keeps for itself. Usually, payout percentages for slots make from 82% to 98% and are set according to
the gambling laws.

The payout percentages for each machine are set within computer chips installed when the machines
are manufactured. Certain machines are set to hit more often than others and are called "loose". In fact,
the probabilities for hitting a winning combination still depend on the use of the slots Random Number
Generator, or RNG pre-programmed for every slot machine. Most players misunderstand the principles
according to which the RNG works, which leads to the establishment of a complete set of myths.
The RNG, which is seen as the "brain" of the slot machine, is a program generating millions of numbers
that will correspond to certain symbols on the reels. The RNG selects values later translated into sets of
numbers defining the winning combinations. These combinations will be pre-set the very moment the
player pushes the "Spin Reels" button or even inserts the coins.

The slot machines odds are different for classic mechanical reel slots and modern video slot machines.
The odds for traditional reel slots are defined by certain mechanical devices. Each reel accommodates a
certain number of symbols, and the chances for hitting a symbol are counted through dividing it by the
total number of symbols on each reel. For example, the chances of hitting one symbol on a 3-reel slot
with 10 symbols on each reel are 9 to 1 (1/10), for two symbols it is 99 to 1, and 999 to 1 for three
symbols in a row.

If every slot machine game in the world had a payback percentage posted on the machine somewhere,
it would be easy to determine which slots pay back the most money. You could limit your play to
machines with a payback percentage of over 95% for example.