Many gamblers consider slot machines to be the most expensive games in the casino. In fact, the old lever-operated slots are commonly referred to as “one-armed bandits.”
It’s true that slots drain gamblers’ money faster than the average casino game. However, you might be surprised to know that return to player (RTP) could be even worse.
Research shows that casinos could actually offer lower slots payback and still draw plenty of players. How in the world would casinos get away with lowering RTP even more and still haul in a fortune?
Keep reading as I cover more on this study and what it means for the slots industry. But first, I’m going to discuss why casinos don’t currently offer lower payback.
The gaming industry becomes more competitive every year. Both online and land-based gaming see plenty of new market entrants on an annual basis.
Some refer to this trend as casino saturation, given that there are so many gambling options these days. The casinos themselves realize how competitive the industry is becoming, which is why they offer decent RTP.
No operator wants to be known as the place that has extremely tight slot machines. After all, gamblers aren’t going to play where they have no hope of winning.
Therefore, most casinos stay competitive with each other in terms of slots RTP. While they could legally offer the state minimum payout percentage, they commonly deliver RTP that’s 15% to 20% higher than the minimum.
Yet a 2018 report from the University of Nevada, Las Vegas (UNLV) Center for Gambling Research shows that Nevada’s nickel slots deliver 94.39% RTP (5.61% house edge) on average.
Anthony Lucas, a professor of hospitality at UNLV, explained casinos’ thought process when it comes to higher payout percentages.
“There becomes this issue of, ‘if I put a higher house-edge game in, I might make more revenue in the short run but in the long run, I might damage my brand and chase off all my players if they can tell I’m sort of price gouging.’”
Interesting enough, RTP for individual land-based slot machines isn’t public information. Megabucks, a famous Vegas slot machine, is the only land-based game that has its payback published in gaming reports.
The numerous other slots throughout the land-based gaming world don’t have publicly available RTP. Players only have their state’s respective gambling reports to go off of when looking for payout percentages.
Even at this, they can only see what each coin denomination pays back. Therefore, casinos could likely get away with featuring lower payout percentages.
But many casinos are still scared to gouge players. They feel that gamblers could possibly tell that they’re winning less if RTP is lowered.
Lucas led the study in question to find out if players could truly tell lower payout percentages apart from higher ones.
Here are the main variables from his study:
Strangely enough, researchers found that the regular customers chose the lower-paying slot more often than the higher-paying game.
“And what we find is that the high-house edge games actually win quite a bit more than the low-house edge games,” said Lucas. “There is no reason for players to play that game and yet — they still do.”
The fact that regular slots players would choose low-paying games is baffling. After all, it seems like they would eventually develop a sixth sense for how often they win or lose.
But Lucas said that slot machines are designed in a way where it’s difficult to tell payout percentages.
“So the problem is players don’t have enough money, or time or interest to play the game long enough to ever tell,” he explained.
The results make perfect sense when considering that slots are among the most volatile casino games. Short-term results can vary wildly from one session to the next.
Gamblers have a difficult time figuring out how often they’re supposed to be winning with these games. Add in the fact that most slots don’t reach their stated RTP for countless spins, and players have very little way of judging payback by feel.
Lucas believes that his study proves casinos could be making even bigger profits from slot machines.
“At the end of the day, you have to ask yourself if operators are leaving money on the table,” said the professor.
Whether or not casinos pay attention to these findings remains to be seen. After all, the industry is still leery of turning gamblers off with low payout percentages.
“There is a strong, well-established fear that they’ll be brand damage or push back from players because they think they can detect these changes,” he said.
Lucas doesn’t feel that the average gambler can determine payout percentages without the facts. If any casino asks him about the matter, Lucas is likely to tell them to lower RTP and capitalize on a higher house edge.
One key takeaway from the UNLV study is that players have a tough time figuring out payback on their own. These games’ volatility makes it hard to get a feel for proper win frequency.
Of course, there’s really no such thing as proper win frequency anyway. Each slot machine can differ from the next in terms of how often it pays out.
A slot with a huge jackpot and several bonuses will pay less frequently than a game with lots of small payouts and just one bonus.
The slot with a big jackpot and multiple bonuses must make up for the extra money that it’s offering through the jackpot and features. Therefore, it can’t pay out as frequently.
On the same token, though, this slot can offer high RTP. But a gambler may mistakenly assume that it has lower-than-average payback due to its low hit frequency.
The speed at which slot machines are played also makes judging RTP difficult. Most gamblers play at a rapid pace that sees them spin reels 500-600 times per hour.
It’s hard to fully comprehend wins and losses at this pace. Therefore, most people don’t have any idea if one slot pays better than another at this speed.
Slots are also designed to put gamblers into a trance-like state, which is sometimes referred to as the “slot machine zone.” These games use a mix of flashing lights, loud sound effects, and immersive features to keep players glued to the reels.
Falling into the slot machine zone makes it less likely that one will have any idea of the payout percentage. They’ll simply continue spinning the reels until they finally get bored or run out of money.
Online slots are different than their land-based counterparts when it comes to the availability of RTP. You can easily find payout percentages for most internet slots.
A big reason why is because games feature the same RTP at each casino. For example, NetEnt’s Blood Suckers slot always offers 98% payback no matter where it’s found.
Online game developers feature uniform payout percentages for their games across the industry. Contrast this to land-based slots suppliers, which give casinos options on RTP. Two casinos located side by side could be offering the same slot machine with much different payback.
Many online slots providers publicly release RTP for their games. You merely have to Google “[slot name] RTP” to find out its payout percentage in most cases.
Some slots developers even put the RTP in the info section. Therefore, you can simply visit the info screen to see the payback.
Given the nature of internet slots, game developers must be more competitive with each other in terms of RTP. They can’t feature a bunch of slots with 90% payback and expect to draw numerous customers when competitors are offering 95% RTP.
Gamblers should theoretically care about slots RTP. After all, payback determines their long-term chances of winning.
Of course, if everything were about payout percentages, then each game would need to offer high payback to remain competitive. But RTP isn’t everything, which is why some operators can get away with tighter slots.
The truth is that the average gambler doesn’t fixate on payout percentages. They’re instead interested in a variety of factors, including graphics, animations, themes, and bonuses.
Many players will disregard lower payback if a slot has an entertaining theme and the right features. Who cares if a game only offers 91% RTP when it has stellar 3D graphics and two second-screen bonus rounds?
Some players are more concerned with how often they win versus their long-term chances of making money. These same gamblers would rather be on a 50-line slot that delivers frequent wins versus a game with 98% RTP.
Speaking of which, slot machines with lots of paylines can often mask low payback. A 50-line game can deliver multiple tiny wins that don’t even equal the bet size (a.k.a. losses disguised as wins). A gambler is unlikely to notice, though, and rather focus on how they’re picking up small wins.
Here’s an example of losses disguised as wins:
Players often feel good about slots wins, no matter how small. This is why losses disguised as wins are so effective at keeping people on the reels.
Of course, some gamblers do care about payout percentages. Otherwise, online game developers wouldn’t bother making RTP figures available to the public.
These players will do research in order to find the best-paying games. To them, a slot that offers 97% payback is a big deal.
Many casinos and game developers try to satisfy this breed of gamblers. They don’t want to offend such players with low RTP.
On the other hand, Lucas’ study shows that the average gambler is oblivious to payout percentages. Taking this into account, it’s likely that casinos are leaving some money on the table regarding RTP.
Most states have low minimum slots RTP figures compared to what we’re used to. Nevada’s minimum requirement is just 75%, which would equate to a 25% house edge.
Luckily, no casino in the Silver State offers such horrendous payback. But Lucas’ UNLV study shows that gambling venues could likely get away with lowering RTP.
His research reveals that gamblers can’t get a good sense for how payback differs between games. They don’t have the time nor money to play at a slot machine long enough to notice that one game offers 5% higher RTP than the next.
Payout percentages for land-based slot machines aren’t available to the public. Therefore, gamblers would be in the dark if every casino lowered payback by 5%.
On the other hand, savvy players could look at state gaming reports and see that slots are paying less than in previous years. The industry as a whole might take a hit if such news circulated throughout the media.
As it stands now, though, casinos may not be truly maximizing their profits with current payout percentages. Some gambling establishments might even review Lucas’ research and look to increase their earnings by decreasing RTP.
Hopefully this scenario doesn’t come into play. After all, slot machines can already be costly enough due to their fast play rate and addictive design.
Online slots are always an option if you’re ever scared that land-based casinos will lower payback. You can easily find RTP for most internet slots through simple Google searches.
Chances are, though, that you won’t have to avoid land-based casinos anytime soon. Lucas’ research is exactly that — research.
His study doesn’t guarantee that casinos will decrease payback. It just shows that they could lower it without players realizing.
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