Who Sets Payouts: The Casino or Manufacturer?

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97 percent payback slot machine

Slot makers design the slots, and casinos put them on the floor. Who exactly is in charge here?

Who decides the percentage payouts? The casino or manufacturer?

Cindy D.

In a way, they both have some hand in it. Let’s start with the slot manufacturer.

The manufacturer designs the various games that they sell. One of the things that they design when building a game is how a game pays out. They’ll actually do this multiple times, giving casinos some number of choices that they can choose from. A fairly simple example might be:

  • 85 percent
  • 87 percent
  • 89 percent
  • 91 percent
  • 93 percent
  • 95 percent

They’ll decide these options based on what people are interested in seeing on their casino floor. Sometimes, they’ll decide the game needs to start at a higher number – maybe it’s faster, so a casino will make it up with a player making more wagers. Maybe it’s a higher denomination game and so the floor will be set higher because of how much will be wagered per spin. But that’s just an example.

Then, a casino will look at a game, decide to buy it, and they have the choice of which version they wish on their casino floor. They will commonly choose a number that’s closest to what they want their entire casino floor to pay out for that denomination.

Let’s say their casino floor is aiming for 90 percent payback on penny denomination. Here they have an 89 and a 91 percent option. They might lean 89 percent for a leased game vs. 91 percent for a core game they own and don’t have any further costs to offer.

This is just an example – increasingly more data-driven approaches will also guide casinos on certain games and what payback percentage yields the best performance. 

We’ve been heartened to see some data-driven examples nowadays that indicate that sometimes casinos set machines to be too stingy, as borne out by how much the machines get played, and what the sweet spot for a particular game will be in terms of payback. In this way, players feel they get good value for money, and casinos maximize their earnings with busy machines.

There’s a third piece not mentioned here that factor into payouts, and that’s a particular region or state’s regulations. Many states have a minimum payback percentage which can factor in. If it’s high enough, like Maryland, which has an 87 percent minimum, casinos are not even able to opt for the 85 percent option. So that can also have an impact, although the casino/slot maker combo is the most involved in what casinos offer.

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