While we’ve tackled this question specifically before, it keeps coming up: Would casinos would rather pay fines than pay players the minimum required percentage as required by state law or agreement (depending on whether they’re a commercial casinos or tribal gaming facility)?
Here’s a couple of recent examples we’ve seen on our social media pages:
I heard of some casinos changing and lowering the payback percentage somehow and they received rather large fines for that.
Brian L.
Casinos get fined if they don’t pay out….BUT they would rather pay the fine then pay out big money. I used to work at a casino.
Rose D.
There are multiple problems with this logic, and ultimately casinos couldn’t operate in this fashion. As we’ve mentioned previously, we’ve spent a substantial amount of time over the years researching this topic, and have never found a single article touting a casino was fined for this issue.
Newspapers love to write about the big bad casinos getting fined for bad money laundering policies, underage individuals being able to gamble, violations of alcohol policy, taking bets on a sports event that they shouldn’t have – the list goes on. Regulators love to tout these fines as it shows that the system works – they were caught and penalized. The casinos even confirm these scenarios and acknowledge the changes they’re making.
We’ve never found an article that discusses a casino getting fined for setting a machine lower than the minimum allow payouts. Here’s a few reasons why this wouldn’t work.
Most Slot Machines Can’t Be Set Below the Minimum
The slot machine payback minimums in many states are pretty comically low. In Nevada, the floor is 75 percent. In New Jersey, it’s 83 percent. Maryland’s a bit more generous at 87 percent.
Most modern slot machines are not even designed to pay below 85 percent. The data out there from the major manufacturers are consistent in this.
But think about that 85 percent. That means, on average, a casino will make $15 on every $100 wagered on a slot. On Roulette, that’s closer to $5. On Blackjack, it’s generally between 50 cents and $2 for every dollar wagered.
Slots are very, very profitable for the casino – they don’t require much labor, and can just be set up and for the most part print money. Players believe the rumors of fines because they think the casino is out to get them and their money, so why wouldn’t they do these sorts of things? But every single game in the casino has a house edge – they don’t need to do anything more than open their doors and take bets. Over time, they’re going to do just fine without having to resort to anything untoward.
Regulators Would Revoke a License of a Constant Violator
We’re not sure why players think casinos can just consistently pay fines around a repeated issue and that’s all they have to do. Like other violations of the law, the consequences would increase. Would a casino be willing to risk a multi-million dollar operation because of a couple of percent on slots, to lose the ability to offer gaming in a location permanently? That doesn’t seem like it makes much sense.
And again, we can’t find a single article confirming these supposed fines. We even reached out to a regulator in one market where this happened, and shared the response we got from them.
Lower Payback Can’t Stop Big Wins
Another aspect players struggle to wrap their heads around is that lower payback doesn’t mean a machine can’t pay out a jackpot. A slot machine with an 85 percent payback setting can absolutely still pay out big progressive prizes and other jackpots – those outcomes are still in the stack. And a higher payback setting can still yield punishing runs without anything to write home about.
Lowering payback is a long-term change – players can still walk away a winner in a single session, get a jackpot, etc. It would be an awfully boring experience to play a slot where if it’s set at 85 percent, you just got $85 back every time you played $100. Most players wouldn’t find that all that exciting and walk away.
Instead, it’s the fact that any outcome is possible at any time that makes slots so exciting for many. Changing the payback doesn’t change the fact that those could happen – maybe not as frequently, but they’d still happen.
Takeaway
Casinos aren’t paying fines to screw players. Players who think that’s what they can or are doing probably shouldn’t gamble, because the unhealthy mindset (they’re purposefully hurting us!) isn’t worth fueling. Instead, we recommend finding other forms of entertainment that may allow for a happier and healthier mindset.
Have a question? Submit yours here!
