A fundamental aspect of slot machine games is that there is a precisely defined house ‘edge’. The games are designed to provide a guaranteed winning margin to the venue over time. The amount of the margin depends on the game, the venue and whether the machine is linked to a progressive or other jackpot system.

The game margin is expressed as a percentage. If a game has a payout rate of 90.50% for example, it means that 9.5 cents of every dollar per spin you play, on average, will be lost.

The payout rates vary quite substantially. In Australia casinos generally have the highest payout rates – 90% or more. Pubs and clubs may have the lowest – as low as 85% in some areas. Bear in mind that the game may look identical in either venue, but you’ll lose as much as 50% more quickly playing in a pub than a casino. Unfortunately there is no way of telling what payout rate a machine has been set at.

Progressive jackpot games will often pay out less than other games. A percentage of every bet – say 4 cents in every dollar you invest – is being put towards the jackpot amounts. Unless you win a jackpot your overall payout rate on a progressive machine is going to be less than any other machine you might play. In other words, you might lose more quickly playing a linked jackpot machine.

None of the above considers the impact of doubling up. In many jurisdictions doubling a win using the standard red/black doubleup has no house edge – it’s perfectly even odds. If you’re a lucky person you can actually win quite large amounts using double up – as we’ve personally experienced.

A final aspect of payout rates to consider is their cumulative impact. A common misconception is that the percentage payback applies per session. For example – that if you take $100 to a casino for a night of fun on the pokies, that you’ll have $90 left by the end of the night if you play a machine with a 90% payout rate. The payout rate actually applies per spin over time.

Lets show some examples:

Times may be rounded up to nearest minute. Assumes 4 seconds per spin. All
figures are highly theoretical and are not to be considered mathematically
perfect.

The best advice remains to budget your gaming – take a pre-set amount and be prepared to lose it! Increasing your bets will generally only make your wallet empty more quickly (though it may also increase your likelihood of winning a progressive jackpot).

In a public appearance the Opposition Leader chose to wield a pokie as a prop:

“Victorian Opposition Leader Ted Baillieu is being investigated by the state’s gaming authority after he campaigned to remove pokies, armed with a pokie machine “

Sydney Morning Herald

The pokie being used may have been an empty shell, either way the investigation will be interesting to watch.

Legislation in Victoria provides for a significant penalty for possession of a gaming machine:

“(1) A person must not manufacture, sell, supply, obtain or be in possession of a gaming machine or a restricted component except in accordance with this Act. Penalty: 1000 penalty units or imprisonment for 2 years or both.

(b) the person controls access, either solely or jointly with other persons, to the machine.

A penalty unit is $100. There is a handy exclusion to the above section:

(4) A person may manufacture, sell, supply, obtain or be in possession of a gaming machine or restricted component if-

(b) the person has the written authority of the Commission.”

Lets hope for the Opposition Leader that he sought the written permission.

There is a nice warning here for ordinary folk – don’t possess a gaming machine for private use in Victoria. From time to time they come up for sale on Ebay – always check before purchasing that you are allowed to own such goods in your state.

“Work begins today to connect more than 20,000 poker machines in about 1600 pubs and clubs to an electronic monitoring system.”

New Zealand Herald

Strong oversight of pokies turnover, collection and cash is the only way to ensure fair pays and plays for both patrons and venues. On a trip to New Zealand a few years ago, payouts outside of the casino were noted to be very casually controlled.

As noted in a previous posting, perhaps the best reason for the government of New Zealand to tighten regulation is to ensure its tax cut is properly audited.

“A Liberal Government will cut the number of gaming machines in hotels and clubs by 20% when the current licences expire in 2012 … a reduction of 5,500″

Victorian Liberals

The end of the current pokies regime in 2012 in Victoria is a long way away. If the party is elected, it might opt to change its mind in any case.

Other policy announcements include:

“introduce a maximum cash payout of $1000 for a gaming machine win, the balance as a cheque.”

This is interesting, but of dubious value. Most gaming machine wins are below this level.

“Maintain the ban on ATMs on the gaming floor and ensure daily limits apply.”

In Queensland at least, ATMs are often found just outside the gaming floor area – hardly a disincentive to withdraw cash. Applying daily limits could have an impact.

“Maintain the ban on 24 hour poker machine venues.”

Unfortunately we are unable to locate any research on whether this actually has a positive impact.

The stigma attached to gaming machines will remain in place for as long as the various governments choose to regulate them in the way they do. As mentioned previously, the gaming machines themselves are merely advanced tax collectors in their current setup. By changing the payout levels to 98%+ and reducing maximum bets you could have any number of gaming machines – with considerably less social imact.

“with punters losing almost $2.5 billion in the past financial year”

Mercury News

A startling insight into the demographic of gamblers was revealed in the article, based on prior research:

” 43 per cent of the losses came from 2-3 per cent of players who were problem gamblers”