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- All casino games, including slots, offered by licensed online casinos, also work on the same principle as class 3 slot machines. When it comes to class II slot machines, these can be mostly found on Indian gaming reservations and illegal gambling establishments as well as unlicensed online casinos, where state regulations don't apply.
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The gaming industry is big business in the US, contributing an estimated $240 billion to the economy each year while generating $38 billion in tax revenues and supporting 17 million jobs.
What people may not realize is that slot machines, video poker machines, and other electronic gaming devices make up the bulk of all that economic activity. At casinos in Iowa and South Dakota, for example, such devices have contributed up to 89 percent of annual gaming revenue.
Gambling authorities are there to ensure that the gaming industry is operating correctly.
Spinning-reel slots, in particular, are profit juggernauts for most casinos, outperforming table games like blackjack, video poker machines, and other forms of gambling.
What about slot machines makes them such reliable money makers? In part, it has something to do with casinos’ ability to hide their true price from even the savviest of gamblers.
The Price of a Slot
An important economic theory holds that when the price of something goes up, demand for it tends to fall.
But that depends on price transparency, which exists for most of the day-to-day purchases we make. That is, other than visits to the doctor’s office and possibly the auto mechanic, we know the price of most products and services before we decide to pay for them.
Slots may be even worse than the doctor’s office, in that most of us will never know the true price of our wagers. Which means the law of supply and demand breaks down.
Casino operators usually think of price in terms of what is known as the average or expected house advantage on each bet placed by players. Basically, it’s the long-term edge that is built into the game. For an individual player, his or her limited interaction with the game will result in a “price” that looks a lot different.
For example, consider a game with a 10-percent house advantage — which is fairly typical. This means that over the long run, the game will return 10 percent of all wagers it accepts to the casino that owns it. So if it accepts $1 million in wagers over 2 million spins, it would be expected to pay out $900,000, resulting in a casino gain of $100,000. Thus, from the management’s perspective, the “price” it charges is the 10 percent it expects to collect from gamblers over time.
Individual players, however, will likely define price as the cost of the spin. For example, if a player bets $1, spins the reels, and receives no payout, that’ll be the price — not 10 cents.
So who is correct? Both, in a way. While the game has certainly collected $1 from the player, management knows that eventually 90 cents of that will be dispensed to other players.
A player could never know this, however, given he will only be playing for an hour or two, during which he may hope a large payout will make up for his many losses and then some. And at this rate of play, it could take years of playing a single slot machine for the casino’s long-term advantage to become evident.
Short-Term vs. Long-Term
This difference in price perspective is rooted in the gap between the short-term view of the players and the long-term view of management. This is one of the lessons I’ve learned in my more than three decades in the gambling industry analyzing the performance of casino games and as a researcher studying them.
Let’s consider George, who just got his paycheck and heads to the casino with $80 to spend over an hour on a Tuesday night. There are basically three outcomes: He loses everything, hits a considerable jackpot and wins big, or makes or loses a little but manages to walk away before the odds turn decidedly against him.
Of course, the first outcome is far more common than the other two — it has to be for the casino to maintain its house advantage. The funds to pay big jackpots come from frequent losers (who get wiped out). Without all these losers, there can be no big winners — which is why so many people play in the first place.
Specifically, the sum of all the individual losses is used to fund the big jackpots. Therefore, to provide enticing jackpots, many players must lose all of their Tuesday night bankroll.
What is less obvious to many is that the long-term experience rarely occurs at the player level. That is, players rarely lose their $80 in a uniform manner (that is, a rate of 10 percent per spin). If this were the typical slot experience, it would be predictably disappointing. But it would make it very easy for a player to identify the price he’s paying.
Raising the Price
Ultimately, the casino is selling excitement, which is comprised of hope and variance. Even though a slot may have a modest house advantage from management’s perspective, such as four percent, it can and often does win all of George’s Tuesday night bankroll in short order.
This is primarily due to the variance in the slot machine’s pay table — which lists all the winning symbol combinations and the number of credits awarded for each one. While the pay table is visible to the player, the probability of producing each winning symbol combination remains hidden. Of course, these probabilities are a critical determinant of the house advantage — that is, the long-term price of the wager.
This rare ability to hide the price of a good or service offers an opportunity for casino management to raise the price without notifying the players — if they can get away with it.
Casino managers are under tremendous pressure to maximize their all-important slot revenue, but they do not want to kill the golden goose by raising the “price” too much. If players are able to detect these concealed price increases simply by playing the games, then they may choose to play at another casino.
This terrifies casino operators, as it is difficult and expensive to recover from perceptions of a high-priced slot product.
Getting Away With It
Consequently, many operators resist increasing the house advantages of their slot machines, believing that players can detect these price shocks.
Our new research, however, has found that increases in the casino advantage have produced significant gains in revenue with no signs of detection even by savvy players. In multiple comparisons of two otherwise identical reel games, the high-priced games produced significantly greater revenue for the casino. These findings were confirmed in a second study.
Further analysis revealed no evidence of play migration from the high-priced games, despite the fact their low-priced counterparts were located a mere three feet away.
Importantly, these results occurred in spite of the egregious economic disincentive to play the high-priced games. That is, the visible pay tables were identical on both the high- and low-priced games, within each of the two-game pairings. The only difference was the concealed probabilities of each payout.
Armed with this knowledge, management may be more willing to increase prices. And for price-sensitive gamblers, reel slot machines may become something to avoid.
This article was originally published on The Conversation by Anthony Frederick Lucas. Read the original article here.
Understanding the inner workings of slot machines need not be a tiring experience for online casino newcomers. In this article, we are going to shed some light on what slot machine paylines and paytables are and how they work.
Slot Machine Paylines and Paytables
Due to their steady popularity and ease of use, slot machines have become a common sight in most casinos and entertainment venues. Traditional slot machines are programmed to give a payout when reels line up to match symbols on a single payline. Paytables contain information about payline structures and how the game works.
Mechanical vs Modern Slots
The issue with older mechanical slots is that they tend to be less creative when offering ways to win because of their limited paylines. Winning combinations are also somewhat restricted on these early slot machines.
The modern slot machines are now run by computer software and random number generators. This means that more can be packed into a game and a lot can happen at a much faster pace. Not only that, but technology has improved and given us far more engaging and enhanced gameplay in the new slot machine games.
Nowadays, we even have story-based video slot games, which are increasingly becoming more popular.
Paylines
Paylines, betting lines or winning lines are connected rows of matching symbols that result in a win. The payline is like an umpire or a referee. It tells you if you have won that particular round or not.
Modern slots are more captivating in that they offer more paylines for starters. Multi-directional and varying combinations of paylines are other huge improvements. Paylines numbering into double digits have also become quite common. These numbers can go even higher in video slots, although at increased wagers.
Payline Formations
Another exciting benefit of a computer system controlling the slot machine is the different payline formation. They can be matched vertically, diagonally, horizontally and even in zigzag patterns.
Besides the above, several other distinct ways in which paylines can match up are:
- Left to right. The matching symbols start from the reel on the left and continue to the rightmost reel. This is the most common and prevalent configuration.
- Right to left. In this instance, symbols line up from right to left. This is a rare payline as it is usually paired to form the below payline.
- Pay both ways (or both ways slots). Instead of a win in either direction, matches are made in both directions. This instantly makes for a more entertaining play. Chi slot is an example of a both ways slot.
- All ways. In this case, hundreds of rows of paylines are commonplace. Therefore, matching symbols are likely to be present on every reel. This configuration can be found in such branded games as Playboy slot and Battlestar Galactica slot.
- Cluster pay. This payline system is set up in such a way that it groups symbols together. Symbols land horizontally and vertically forming a connected cluster. This payline formation is featured in such titles as Wild Worlds, Aloha Cluster Pays, and The Legend of Shangri La slot.
Paytables
A critical and integral part of every slot machine is the paytable. It provides important information about the paylines, symbols and bonuses.
Paytables can be accessed before the start of the game and should always be consulted. A paytable is an instructional guide of sorts on how to play the game and what to expect. Familiarising yourself with a game’s paytable will allow you to be up to speed with the different components of the game. Things like game rules, bonus features, symbols and their values are explained in the paytable.
Placing Bets and Payouts
Adding to the overall variety of slot games are the adjustable payline slots and fixed payline slot machines. On the adjustable payline machines, a player can choose the number of paylines to play (or activate). On the contrary, it’s all or nothing on the fixed payline slots.
There is a catch with all slot machines. To be able to win as much as possible, you have to play as many lines as possible. However, it’s generally not advisable to continuously play all the paylines if you want your bankroll to last. Nevertheless, there are other ways to increase the odds in your favor. For instance, wild symbols, scatter symbols, bonus symbols and progressive jackpots. All of them are referenced in the paytable.
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Things to keep in mind
In essence, all slot machines have the same basic functionality. This is regardless of their charming lights, melodic tunes.
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The payline structures is the essential difference between slot machines.
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That and additional helpful information — hence the importance of consulting the paytables. As a side note, it is worth noting that lower denomination slots usually have lower payouts in contrast to higher denomination ones.
Hopefully, this article would help you better understand several things. First and foremost, the way how slot machine paylines really work. Secondly, you should now know how to play online casino slot games better.
Don’t forget that payline technologies and game development changes frequently. In order to be caught up with all the latest additions, make sure to tune to the new slot reviews on Bob Casino!