We like to think we’re pretty thorough here, and so when someone challenges us on a topic, we will circle back and “do our research,” as one player said to us once on this topic. We recently wrote about why casinos aren’t just looking to pay the fines and intentionally break the rules. Here’s a reply we got on the topic on Facebook:
Well in Indiana Shelbyville Casino was on news about fines years ago. The slots were not paying what they should. So I totally disagree on this.
Twyla C.
Whenever we get a post like this, we’ll often search the news articles about casinos. We did find articles about this casino getting fined for other instances (most interestingly for promoting a Justin Timberlake appearance that never happened), but not for slot payouts.
So we reached out to the Indiana Gaming Commission and asked a few questions. For one, does Indiana have a minimum payout requirement for slots? They do. They kindly sent over the relevant regulations, which require:
- The electronic gaming device must pay out at least eighty percent (80%) and not more than one hundred percent (100%) of the amount wagered unless otherwise approved by the executive director.
- The theoretical payout percentage must be determined using standard methods of the probability theory. The percentage must be calculated using the highest level of skill where player skill impacts the payback percentage.
- An electronic gaming device must have a probability of obtaining the maximum payout greater than one (1) in fifty million (50,000,000).
For those who sometimes wonder why a random number generator is employed, the second bullet here is a great reason why. You’ll also notice the reference to player skill – for games like Video Poker, you could be paid below the minimum payback percentage if you’re making mistakes in strategy, so the payback percentage is calculated presuming the player knows the proper strategy.
So, with that baseline in mind, we then asked if the Shelbyville casino has ever been fined for violating these rules? The answer: No.
In fact, we asked have they ever sanctioned a casino for violating these rules, and they provided a single instance from 2017 for the Hollywood Casino, relating to a secondary mystery progressive on six machines being misconfigured to be below the minimum payout requirement.
Does this prove Twyla’s point? No – in fact, it proves the opposite.
If casinos were willfully and purposefully setting up machines to break the rules, these scenarios would be regularly caught and documented. In the case of the 2017 settlement, the casino found an issue on one machine where they shut it off. The gaming commission then looked over two banks of machines, all of which had the same feature, a mystery progressive that was an add-on to a slot machine. They found that within those two banks of machines totaling eight machines, that six of them were set up below the minimum payout requirement. Two of them had only been on the floor a few days.
The fact that only one instance has been documented (which led to a $78,000 settlement) should be another good indication this isn’t a practice casinos do as a matter of course.
There’s one other element to this that players sometimes forget. Both Hollywood Casino, the one where the issue was found, and the casino in Shelbyville that Twyla referenced, are both owned by larger corporations that own casinos across the country.
If casino ownership was known, even if only in certain markets, to be systematically ignoring regulations, it would have an impact on their ability to operate in gaming markets across the country.
Take the Shelbyville casino – today it’s a Horseshoe branded casino, and is owned by Caesars. It was acquired by Caesars in 2018. One year later, Eldorado announced it would acquire Caesars. For that acquisition to go through, not only would the two companies need to have their merger approved by the federal government, but they needed sign off in every gaming market where they had a casino.
The fear that a single gaming market could get in the way of their doing business, let alone dozens of them, is pretty good incentive to stay on the straight and narrow path. And there were questions and pushback in some markets.
Atlantic City mandated $400 million in investments as a stipulation of the merger, which has led to pretty significant investments in recent years, including room upgrades and new venues such as a theater at Caesars. Other regulators scrutinized how much the owners had been investing locally to ensure they wouldn’t be left behind in a larger corporation.
And that’s just in terms of operating the casinos – if a casino company was purposefully breaking the law, you can be assured this would come up in gaming markets all over the country. And casino licenses to operate, whether it be a commercial license or a tribal compack, come up for renewal on a regular basis, so it doesn’t have to take a merger for a company to be scrutinized
It’s fine to be diligent and watch what’s happening, but as always, we advise against presuming casinos are just out to get everyone – they do just fine with games that are designed to favor the house without any sort of extra hanky panky.
And if that’s your opinion, we sincerely hope that you’re not spending your entertainment money there, and instead investing it in activities you can feel more positive about.
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