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Slot Machines Explained – How They Work and What Are the Odds of Winning

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Slot machines are the most popular gambling game in the casino. The casinos must love this because slot machines also provide the worst odds to the players. This post looks at how slot machines work.

I go into a lot of detail about how slot machines work, but I focus mostly on the nuts and bolts behind the game. Why are the odds of winning at slot machines so low? How did they become so popular? Why are these games more addictive than any other gambling game?

You’ll find the answers to all those questions and more in the post below.

1. What Is a Slot Machine?

A slot machine is a gambling game with spinning reels. Most slot machine games have 3 spinning reels or 5 spinning reels. Each reel has multiple symbols on it.

The spinning reels stop at random, and if matching symbols line up across a pay line, the gambler wins prize money. Early slot machines had a single payline across the center of the reels. Newer slot machines have multiple pay lines of different shapes.

Slot machines come in various denominations. When you put your money into the machine, the game converts that money into credits. For example, if you’re playing a $1 slot machine and insert $100 into the machine, you get 100 credits. Payouts are handled in terms of credits.

These are deceptively simple games that provide the potential for larger prizes than most other gambling games on the casino floor. Gamblers pay for that large prize potential, though.

2. Spinning Reels and Random Number Generators

Understanding how slot machines work requires an understanding of some basic math.

But first, let’s talk about how the results are determined.

Early slot machines were mechanical. They used springs to spin the reels, which were huge metal hoops inside the machine. They stopped at random. The odds of getting any specific symbol on a stop on such a machine were the same regardless of which symbol it was.

But over the last three or four decades, slot machines have become more complicated. The spinning reels are just for show. In fact, on most slot machine games, you don’t even really have spinning reels. You’re just watching an animation of what looks like spinning reels.

These machines use a different method of determining results. They’re run by a computer program called a random number generator (RNG). This computer program cycles through numbers at a rate of thousands of numbers per second. When you pull the lever (or press the spin button), the computer stops at whatever number it’s thinking about at that moment.

That number determines the combination of symbols you see on the screen and the amount of your prize money.

You’ll see some so-called slot machine experts claim that you can predict what’s going to happen next on a slot machine because a random number generator, by nature, runs in cycles. That might be true if the cycles were slower. But when a random number generator is running through thousands of numbers per second, cycles no longer matter.

These random number generators also allow slot machine manufacturers to attach different probabilities to different symbols. By doing so, they can afford to offer much larger payouts.

To understand why that’s so, you need to understand some facts about pay tables and payback percentages.

3. Pay Tables, Payback Percentages, and the House Edge

The pay table on a slot machine is a list of the potential prizes and which combinations of symbols trigger those prizes.

Here’s a simple example of a slot machine pay table:

The payback percentage is a theoretical amount that the casino expects to pay back to the player on every bet. It’s expressed as a percentage, and it’s a long-term mathematical expectation.

Here’s an example:

A slot machine game is said to have a payback percentage of 94%. This means the casino expects to pay out an average of 94 cents every time you wager a dollar.

In the short run, this is practically impossible. In fact, if that’s how it worked in the short term, no one would every play slot machines at all.

But in the long run, if you average all the wins and all the losses and look at the average loss per dollar wagered, this game will come close to its theoretical return.

Most players spin the reels 600 times per hour or more. If you’re betting $3 per spin, that’s $1800 per hour in action. After a single hour, you might be up a few hundred dollars or down a few hundred dollars.

But over thousands of hours, you’ll usually see results that come close to the expectation. The casino works in the long run automatically, because they’re running hundreds of games 24/7.

The casino doesn’t mind if you walk away a winner now and then. They know you’ll eventually lose all your money back if you keep playing.

Here’s how the math works:

Suppose each symbol as a 1/10 chance of showing up. To get 3 of them on the same payline, you have a 1/10 X 1/10 X 1/10 = 1/1000 chance of hitting that combination.

In the pay table above, the expected value of each of those combinations can be calculated by multiplying the payoff by the probability of winning.

Add all those expected values together, and you have the payback percentage for the machine.

Here’s what that looks like:

Modern slot machines rarely have the same probability for each symbol, though. With computers and random number generators, slot machine designers can adjust the probability for each symbol. Obviously, this makes larger jackpots possible.

Here’s an example:

Suppose you set the probability of getting the game logo on our example game to 1/20 instead of 1/10.

The probability of getting that jackpot is now 1/20 X 1/20 X 1/20 = 1/8000.

You could offer a jackpot of 2880 coins and have the same 94% payback percentage for the game. (I multiplied the 360 jackpot by 8 since that’s how much less likely it is to hit that jackpot.)

This accomplishes a couple of things for the casinos and the game manufacturers:

  1. It allows them to offer larger jackpots.
  2. It allows them to obscure the actual payback percentage for the game.

Point #2 is important.

Slot machines are the only games in the casino where a mathematician can’t calculate the house edge for the game. They just don’t have enough data to work the math problem.

You must know both the probability of winning and the payout when you win to make this calculation.

4. How Progressive Jackpots Work

You’ve probably seen slot machine games with huge jackpots that seem to constantly be growing. These are progressive jackpot games, and they work slightly differently than a standard slot machine game.

The first way they’re different is because of their constantly growing jackpot. Standard slot machine games have a flat amount for their top prize. These are called flat top machines.

But a progressive slot machine takes a tiny percentage of each of your bets and adds it to the jackpot. This has the effect of reducing the payback percentage for the machine while also growing it.

You lose the amount that’s being added to the jackpot.

But you also gain a higher expected value based on the possibility of winning that jackpot.

If you think this couldn’t possibly be an equitable trade, you’d be right.

Let’s assume that the game takes a penny from each dollar you wager and adds it to the jackpot. That costs you 1%.

But the odds of hitting that jackpot are at least 1 in 1000. It would take 2 hours of playing before the increase in the jackpot amounted to a higher payback percentage for the machine.

And most progressive jackpots are far larger than this and have much lower odds of winning. Some of these games have jackpots over $10 million. The probability of winning such a jackpot resembles the probability of winning the lottery.

In other words, you’re more likely to be struck by lightning.

Literally.

My advice is to skip progressive slots games unless you enjoy dreaming about that life-changing jackpot. Even if you ignore my advice and play progressives anyway, try to limit the amount of time you spend on them. They will cause you to lose money at an absurd rate.

You’ll see 3 kinds of progressive slot machine games, by the way:

The first kind is a standalone progressive. Only the bets made on that machine increase the size of its jackpot.

The second kind is a local area network. Only bets made in the networked machines in that casino increase the size of the jackpot. If the jackpot is won on any of those machines, the jackpot on all those machines resets to its starting number.

The third kind is a wide area progressive. These games are networked through multiple casinos. Megabucks is the most famous example of this kind of game. The top prize for this game starts at $10 million and grows until it’s hit. Some players have won over $50 million on Megabucks.

5. Bonus Games and Fancy Slot Machine Features

Modern slot machines have lots of fancy features besides progressive jackpots. I explain a few of these features below:

Bonus games are games that offer bonus prizes and are activated by certain combinations of symbols. The most famous example of a bonus game on a slot machine is the Wheel of Fortune spin on Wheel of Fortune slots.

Wild symbols work just like wild cards in a poker game. They stand in for a symbol you might need to make a winning combination.

Scatter symbols are symbols which can appear anywhere on the screen and trigger payouts, even when they’re not on the pay line.

Here’s the thing to remember about all these fancy features:

The game pays for them by reducing the payback percentage for the player.

If you want to maximize your odds of winning, your best bet is to find the most boring slot machine in the casino—the one with the fewest features.

6. The Skinner Box and Randomized Rewards

Slot machines are probably the most addictive form of gambling in any casino. This is by design.

The behavioral scientist BF Skinner did an experiment with rats and cheese. He created a box with a lever on it. If the rats pulled the lever, they got cheese. Naturally, the rats were motivated to pull the lever.

Skinner went on to create a new box which only provided cheese some of the time when the rats pulled the lever. He discovered that when he added the random possibility of a reward, the rats were MORE motivated to pull the lever than they were when they had a 100% chance of getting a reward.

That’s exactly how slot machines work.

Sometimes you win, sometimes you lose, and—if you play long enough—you’ll always be a net loser in the long run.

But the brain triggers endorphins every time you win—even if the amount you win is less than the amount you bet.

And slot machines don’t return your original bet with your winnings like table games do. That’s why we say a blackjack bet pays off at 3 to 2 instead of saying it pays off at 3 for 2.

If you bet $1 on a slot machine game and win 95 cents, you’ve lost 5 cents on that bet.

But your brain doesn’t recognize the net loss.

It triggers the same endorphins as a win of $2 would.

For people with impulse control problems, playing slots is a bad idea.

7. How Online Slot Machines Work

Online slot machines work essentially the same as slot machines in a casino. Since all casino slot machines are now powered by random number generator software, the slots in online casinos are almost identical to the slots in a traditional casino.

The big difference is that online casinos have much lower overhead. As a result, most online casinos offer higher payback percentages than their land-based cousins. This isn’t 100% true across the board—some online casinos have lousy payback percentages.

But if I had to choose between playing an online slot machine game at an online casino or playing a traditional slot machine at the Las Vegas airport, I’d go with the online game almost every time.

You’ll also find many unique slots games at online casinos that aren’t available in traditional casinos. Some of these games are fun and cute. Others are evocative of games you’re used to in Vegas.

Either way, the math and technology behind online slot machines are basically the same as in Las Vegas.

Conclusion

How slot machines work isn’t a big mystery. They’ve been around for over 100 years, and the technology has changed.

But they’re still the same game our grandmothers played. Like all gambling games in the casino, they have an unassailable mathematical edge.

The difference is that you win bigger jackpots on a slot machine than you can on any other game. The best you can do at the blackjack table is 3 to 2. At a roulette table, the biggest prize is 35 to 1.

It’s easy to find slots where you can win 100 for 1 or 1000 for 1 or more.

If you like playing for big jackpots, slot machines are the game to play.