What Does Payback Percentage Actually Mean?

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97 percent payback slot machine

We use all sorts of terms on the site that, if you’re new, may be like speaking Greek. We attempt to define many on the site, but this one’s one we get enough to bring to the You Asked! Section:

What does the payback percentage actually mean and what is the percent of?

Katie

Payback percentage generally refers to the amount a slot pays back relative to the amount it takes in. For example, if $100 is wagered on a slot machine, and $90 is paid out, the payout percentage for that example is 90 percent.

Payback percentage often is in reference to what a casino has paid out in a window of time, as opposed to Return to Player, which the industry uses as a term for the calculated and expected payout a slot will deliver over time.

It should be noted that some people use the terms payback percentage and Return to Player interchangeably, and they do more or less cover the same ground.

There’s also the term “hold,” which is the inverse of the payback percentage, as it’s the percentage the casino “won” off wagers. Effectively, payback percentage + hold = 100% of the amount wagered.

Payback percentages will shift a bit up and down, because actual performance of slots can vary on a few things:

  • What’s Played: Each slot is set up with its own settings, and so depending on what’s played, that can have an impact.
  • What Denominations Are Played: Traditionally, higher denomination slots pay at a higher payback percentage than lower denomination ones.
  • How Much They’re Played: If more people play lower denomination slots, it could pull the average down; a few whales playing high limit slots could conversely pull the average up.
  • The Window of Time: The longer the window of time, the more stable the numbers will be. Numbers can shift in bigger directions on a month to month basis, but often shift by smaller amounts on, say, an annual basis.

On rare occasions the payback percentage for a certain period of time can exceed 100 percent. There are writers on this topic out there who tell players to go to those casinos because that means those machines are set that way. Here’s a hint: Slots are not set to pay more than they take in.

What instead happens is some small amount of play yielded above average results – a couple of jackpots on machines in high limit that aren’t played as often can easily skew the numbers. 

That doesn’t mean the machine will always do this – the randomness of slots in terms of what outcome is offered at the time you press spin means there will be periods of time where it exceeds the expected Return to Player, and other times where it will underperform as well.

So that’s what Payback Percentage is in relation to our wagers on slots. Next time you see it referenced here on Flip The Switch, we hope it’ll help you get even more out of the conversation!

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