Slot machines are designed to deliver random results, or at least results that can be designed as randomly as possible by humans. Slot machines also have a fixed payout ratio (usually 94% – 96% in Germany) to give the house an advantage. Players sometimes have difficulty reconciling these two statements. How can a slot machine be random when it has a pre-programmed payout ratio?
Of course, there are further questions. Doesn’t a pre-programmed payout ratio mean slots pay out less to make up for big wins or jackpots ? How else can slots achieve their pre-programmed percentage?
And what about the bonus rounds? K can nominate the latter really be completely random when they need to be part of the pre-programmed payout? Don’t your results need to be set in advance so that they can be included in the payout percentage calculation?
The short answer is that slots can be random despite the pre-programmed payout ratio. Even after big wins, there does not have to be a “cold phase” for the machine to get the fixed payout ratio. Bonus events such as free spins or jackpots are of course part of the calculation, but this does not exclude their randomness.
Now let’s take a look at each of these problems below.
Slots are random and have a pre-programmed payout ratio
The outcome of every spin on a slot machine is completely random, but over a period of hundreds of thousands or millions of spins, the slot approaches the pre-programmed payout ratio.
In this regard, slots are similar to almost every other casino game . All ensure that the house has an advantage by paying out less than the actual chance of winning.
Craps, for example, is random in that any amount of dice can come with every roll, but the house edge ensures the predetermined payout ratio. The situation is similar with roulette. Again, every number can come with every spin, but in the long term the results will align with the previously determined payout ratio.
Take the one roll bet on the 12 in craps. There are 36 possible combinations for two six-figure dice, but only one of them gives a total of 12 – two sixes on both dice.
A craps player rolls an average of 12 once every 36 throws, so the real chance of winning is 35 to 1. If you bet on the 12 and win, you will only receive a 30 to 1 payout.
If you bet € 1 per roll, you risk € 36 with an average of 36 dice. With one win, you can keep your $ 1 bet and make a $ 30 win. That would bring you a total of 31 euros from your original 36 euros, and the house would have made a profit of 5 euros.
This five euro win, or 13.89% of your stake, is the house edge. You can also flip that over, subtract 13.89 from 100 and you’ll get a payout ratio of 86.11%.
This way you also get the payout ratio for slot machines . Slots can have a lot more random numbers per reel than the six per dice, and the total combinations can go into tens of thousands or hundreds of thousands or even millions, but the principle is the same.
The chances of winning in the respective games mean that the combinations on the reels adapt to the predetermined payout ratio over a very long period of time. The house still pays out the winning combinations less than the actual chances of winning. Accordingly, this is the house edge.
Each result can be displayed at any time. It is completely random. The house can still rely on the fact that it has an advantage because the payout ratio is not 100%, but a bit below.
Doesn’t there have to be a so-called “cold phase” so that the predetermined payout ratio is reached?
The house does not panic if a player runs hot at a table or slot machine. It is known that the variety of results below will bring the overall results towards the expected house edge.
Now let’s say you are playing on a machine with a payout ratio of 96%, with one euro per spin. There are some slots that pay a little more and then there are some that pay less. We stay at 96% in our example.
Next, imagine you win a € 5,000 jackpot the first time you spin.
Doesn’t that throw the percentages out of hand? Doesn’t the slot have to stay cold for a while until it reaches the expected 96 percent again?
No, that’s not necessary. You can leave the machine as a winner – if you are smart, you will. And that’s perfectly fine for the house. Casinos need winners to tell their families and friends about it so they can play.
There is always another player after you and then another player and so on.
All that is required is that the machine pays at its normal rates and your jackpot disappears in the statistical meaninglessness.
Imagine that your € 5,000 win is followed by a million spins in which the game pays out its normal 96 percent. There are other jackpots on these spins – they are part of the game’s normal chance of winning.
There will be cold and hot phases. None will come at a predictable time. The results will be completely random.
With these million spins for a total of one million euros, the 96 percent repayment rate means that the players receive € 960,000.
If you add up your spin to the total stakes, you will receive an amount of € 1,000,001 and the total return for the players is € 965,000. The payout ratio is therefore 96.5%.
Normal results after the jackpot increased the payout ratio by half a percent without the need for a “cold period”.
You can win big in a short session. You can lose a lot in a short session. However, the house has the advantage on its side and knows that big wins or unusual series with random results become statistically meaningless, the more turns are made.
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