Do Casinos Purposely Pay Less Than Minimum Payouts?

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97 percent payback slot machine

Sometimes players fail to trust the system that’s in place. We’ve received a few of these, and have certainly seen our share of it over time:

Are you aware that some states pay penalties so that their machines don’t have to pay out the state required amount? They just keep paying fines and then short the customer.

Tony L.

We’ve looked into this multiple times over the years, and never found evidence of this. We shared that with the player (the original comment came on social media). The player replied this before deleting their entire thread:

You’d better do your research. It happens in Minnesota and Wisconsin. There was a whole article about it. I’m not trying to be rude, but this is reality.

Tony L.

We selected Minnesota for this article just to have a concrete example to work against, and since the player specifically called it out. Minnesota happens to be a state with tribal gaming – we get a lot of players who are distrusting of tribal gaming because of the lack of payout transparency that tends to exist in these markets. But even without the benefit of public payback percentage reporting, we have things to work with.

Minnesota has payout ranges agreed to in its compacts with the tribes. These compacts are what let them offer Vegas-style slot machines, also known as Class III machines. 

The compacts we reviewed indicated a minimum payout percentage of 80 percent on games of chance, which slots fall under. That’s higher than the 75 percent minimum payout required in Nevada, albeit less than some other states with commercial gaming, such as New Jersey and Maryland.

Here’s the thing – most slot machines can’t even be set under 85 percent – the game makers don’t provide options that go below that number. So a casino would not even have the ability to set up a machine that low, unless they found a provider that sold machines like that. They wouldn’t be recognizable brands, though, because the main providers that make games for Vegas (and therefore for other markets like Minnesota) don’t offer those.

But since we’d better do our research, we decided to reach out directly to the Alcohol and Gaming Enforcement division of the Minnesota Department of Public Safety. It’s their department that houses the compacts with the tribal partners who offer gaming in the state, and are the ones who do the inspections.

Their website confirms that they conduct a lot of reviews of casinos and slots. Take a look at the statistics for 2020, a year which was messed up in a lot of ways, and led to months of closures for casinos across the country:

  • 131 criminal investigations. 
  • 1,344 Executive Order compliance visits.
  • Tribal State compact compliance inspections which resulted in:
    • 378 slot machines physically inspected. 
    • 44 blackjack table inspections. 
    • Eight Tribal audit reviews.
    • 14,367 slot management reviews.

So they would know if something was going wrong, and they’d be the ones issuing fines. Here’s a direct response on the question from a spokesperson for Alcohol and Gaming Enforcement:

AGE has no information or evidence to suggest machines at the tribal casinos in Minnesota have been set up to pay less than the minimum payout percentage as stipulated in the tribal/state compact.

Spokesperson for the Alcohol and Gaming Enforcement division of the Minnesota Department of Public Safety

So, Tony, we’re happy to share that your fears are unfounded – whatever article you read was simply wrong. Games aren’t being set below the payouts required by the agreements with the state, and based on game design as it stands today, are going to be a significant percentage higher than that minimum.

Tony is not the only player who has raised this, and Minnesota is not the only state that’s been mentioned for this. But we have never found a single example of this sort of situation happening. And often it’s believed by players who want to think casinos are purposefully trying to take their money. 

Here’s the thing – every game in a casino has an advantage for the casino. They don’t need to set the games that low to make a healthy profit. Players just want something or someone to blame to make them feel better about their losses. Unfortunately, it’s the wrong mindset, and isn’t a healthy one for gambling.

If you think the casinos are out to get you, we have a gentle suggestion: Consider another use of your entertainment budget. You don’t have to spend it there, and if you don’t trust them, we’re confident you can find another option you can feel better about.


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2 Replies to “Do Casinos Purposely Pay Less Than Minimum Payouts?”

  • Eileen says:

    Gaming in Florida has no regulation as far as payback rules I believe. I remember playing 98% Payback Slots at Flamingo in Vegas years ago. I kept returning to the cashier near that section of games to cash tickets. She was like “Wow, you keep winning. You’re supposed to lose. Ahhh, say what? I said “it’s my lucky day” and we left, LOL.

    • FlipTheSwitch.com says:

      Hey Eileen – you’re correct that many tribal gaming agreements don’t set a floor on payouts, but fortunately since they buy the same machines as other casinos, there still will be a floor built in to the games themselves. And there’s some anecdotal data that’s come out of Florida over the years that indicate they actually haven’t been all that bad!

      We love the casino anecdotes like this! Imagine finding 98 percent payback slots in Vegas today… haha

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