In a previous article, we shared that the state of Nevada regulations allow slot paybacks as low as 75%. But we also noted new slots traditionally have a slot payback floor of 85%. A reader questioned the difference between those numbers:
You said Nevada state payout is 75%. New machines are set at 85%. Are you saying that the state of Nevada is not adjusting those machines (either themselves or the manufacturer) to pay 75%. It seems like if you can pay 75%, why pay 85%?
Patricia M.
There are a few important points here. The floors are just that – floors. Many casinos can and will pay higher than 85%. Slots can be set to pay out well into the 90s, and those settings wouldn’t exist if at least some casinos weren’t using them – it would certainly be simpler and faster to have less payback options.
There is a perception by some players that casinos will pay the least they can get away with (even if they were breaking the law). But as it turns out, games that don’t pay as well tend to also often be less fun for players, who struggle to get significant wins that might encourage them to keep going.
The 85% floor on new slots is a pretty traditional industry standard today. But some slots start higher – the game maker may opt out of an 85% option because it’s a faster game, or it doesn’t play well at a specific number. We’ve had casino makers tell us their sales people will discourage casinos from putting certain games on their floor at lower paybacks for performance reasons.
And that leads to the second key point. There are now third-party data companies that look at the various slots, and the various ways they can be configured, and will tell casinos the right balance of bet options and payback settings.
That’s because sometimes, going too low can lead players to give up on the machines faster, simply because they’re tougher. There’s a balance between payback and something known as time on device. We’ve talked about this from the direction of players and hosts in the past, but it also comes into play in determining how well a machine is doing for a casino.
Generally, time on device, and the amount a machine is winning relative to others on the casino floor, both offer important indicators to the casinos. And oftentimes, a payback above the minimum is the magic formula to getting the most performance out of slots, including the most popular ones.
And indeed, if you look at casino reporting data around payback, you won’t often see an 85% overall payback, even on low denominations, in the reporting. It usually starts higher.
We spoke with someone familiar with the data who once said they would test banks with different paybacks, and within 90 days the higher paying back would generally become the busier bank. So the scenario of a race to the bottom is often avoided by these data points.
There are definitely casinos out there who have no qualms about putting slots, especially low denomination ones, at an 85% payback. But there are also casinos that purposefully don’t, because they either believe in a more generous structure that will get them more consistent customer visits, or because the data simply says that a better payback will lead to better performance.
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