Do Slot Machines Have to Pay Out?

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Regulations guide the general principles that slot machine design follows, and as such this is an easy question to answer: Yes. Games must be designed to pay out, over time, a payback percentage based on a set of outcomes that the game is designed to offer.

What does this mean for a player? If a game shows a payout, like a line hit or a progressive jackpot, the game has to be able to provide those payouts on any particular spin. What the game doesn’t have to do is do it within a certain number of spins, or within a certain period of time, unless the rules require it (such as a Must Hit By progressive).

Many jurisdictions, particularly in commercial markets like Nevada and New Jersey, have minimum payback requirements that must be honored by games on the casino floor. Manufacturers offer payback options that exceed these minimums. Those same regulations are the ones that govern that prizes listed must be available, that any outcome must be possible on a given spin through the random number generator, and so on.

Manufacturers also have their games certified by third parties, such as Gaming Labs International, which reviews what the games are supposed to pay, puts them through their paces, and certifies that the actual data is within the range expected for that test, as well as the games meeting a variety of regulatory requirements.

That said, games can be designed with different payout rates over time, and that becomes part of the calculus for players. Higher volatility games will be more difficult to hit on, but provide more upside potential when you do, while lower volatility games will tend to give you more payouts, but on average smaller than the higher volatility ones.

In the most extreme example of a game with a low hit frequency, meaning it doesn’t offer a payout often, there is a slot called Hundred or Nothing that floated around some Vegas casinos for a long time. For a $1 spin, there were two outcomes – it paid $100 or it paid nothing. As you can imagine, it was a rare outcome (less than 1 in 100 spins, on average, given the house edge on the game) to get those three 7s for the $100, but when you did it was 100x your bet! So while it didn’t pay out that often, when it did, it was meaningful.

So yes, machines have to pay out, but they don’t have to pay out when a certain player is in the seat, or within a certain number of spins, which means the game’s design will have a lot to do with the short term potential. 

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