We’ve talked about a lot of different types of gaming machines on the site, whether it be traditional Vegas-style slots, Bingo Machines or Historic Horse Racing machines.
In some states, another class of machines exist called Video Lottery Terminals. Do they work or pay differently?
Do video lottery terminals have the same payouts as a traditional slot machine? We have video lottery terminals in New York by state run casinos and I think the payouts seem to be less.
Randy S.
The blanket term Video Lottery Terminals generally indicate they’re machines licensed by a lottery for play in certain facilities. Some of these VLTs can basically be a Vegas-style slot in function, just with oversight by the lottery, but in the case of New York, they’re a different animal altogether.
New York’s lottery-licensed machines work more akin to pull tabs or scratch tickets. A set number of winners and losers are established, and every time you spin, you are buying one of those outcomes. The reels of a slot machine are there to illustrate the outcome of that wager “for entertainment purposes only,” but the purchase and outcome is determined outside the VLT by a central server.
Now, as to that question of payouts, there is one key difference in how they’re regulated, and that’s the minimum payback percentage:
The specifications for video lottery franchise gaming to be designed so that prizes will average no less than 90 percent of sales.
New York State
So that means any of the games on the casino floor in those regulated properties have to pay at least 90 percent.
How does that compare? Well, New Jersey has a floor of 83 percent for slots, and Nevada has a floor of 75 percent. Slots aren’t generally designed with paybacks that low; modern slots will tend to start at about 85 percent, with a half dozen choices for a casino to select from.
This means casinos can, and often will, select options higher than 85 percent, but that doesn’t necessarily have to be the case. And a look at historic data of, for instance, penny denomination slot machine data in New Jersey didn’t indicate a single casino that paid above 90 percent on penny slots. So in that case, New York lottery-licensed games would have a better payout potential!
Given the minimum is higher in New York, it’s probably safe to assume, particularly for lower denomination games, that it’s about as close to 90 percent as it can get mathematically. Higher denomination games may be more generous, just as they are in other types of casinos. Whether that makes New York lottery casinos a better gamble for the dollar will depend on what the other casinos are doing, but based on the publicly available information, it’s probably a better gamble.
That would explain why the two big lottery-licensed casinos in the New York City area are pursuing casino licenses that would let them switch to Vegas-style slots and live table games – it likely means a healthier house edge, and bigger profits, for the casino companies who run them.
Have a question? Submit yours here!
