About minumum slot paybacks

Hey John, your loyal reader here from SLC who plays in Wendover and Las Vegas. Hope this finds you well and happy.

In an attempt, yet again, to nudge the odds slightly in my favor, can you give a bit more detail on the statutory slot minimums imposed on casinos (I presume) by gaming commissions, state regulation, tribal oversight, etc. Does this mean a machine cannot pay less than/more than a predetermined legal percentage? Is there a constant throughout the industry, or does this vary from state to state, reservation to reservation etc., and is the minimum published for the average player to see? (Sorry if this is yet again a repeat question.)

I realize that playing in an area with a higher statutory payback does not guarantee more wins but it seems it could influence long-term play. Also, if a guaranteed payback percentage is posted like "99% payback" on a dollar carousel, for example, is that a quantified statement by legal oversight in all instances? Is a reservation casino, for example, held to the same legal standard as a Nevada casino when these types of "guarantees" are posted? It seems bad business that a casino would set their average payback percentage so low that the return is consistently poor, but it may be good business for them to strategically place some real low payback "duds" to maximize overall profit.

I am grateful for you as a resource, John. Based on my nature, I will no doubt inquire again as questions arise. You are certainly appreciated by your readers, even if we don't always like what we read. Thanks for your objectivity.

Respectfully,
Duaned

Dear Duaned,

Thanks for the kind words about my columns.

As for state regulations, slot-enabling statutes specify a minimum long-term payback and sometimes also specify that no machine's long-term payback should exceed 100%. If a machine's long-term payback does not fall in the approved range, the machine is illegal for operation in that state.

Turning to Class III gaming in tribal casinos, the minimum is specified in the tribe's compact with the state. If the tribal casino offers only Class II gaming, I don't think they are subject to any minimums. I could not find a minimum specified in the copy of the Indian Gaming Regulatory Act I found online (http://www.nigc.gov/LawsRegulations/IndianGamingRegulatoryAct/tabid/605/Default.aspx).

There is no constant value for the minimum. It varies state by state, compact by compact. The minimums are published; the statutes and compacts are part of the public record.

Now, about those payback signs over banks or carousels. They may be covered by statute or compact. But if the statutes or compacts don't address the signs, I think Truth in Advertising laws will cover them and ensure that what the signs say is indeed true.

I don't recall having seen any payback signs over the Class II games I've seen, but my experience with Class II gaming is extremely limited. I can't say whether federal and state Truth in Advertising laws would apply on a reservation.

For the most part, you don't have to worry about statutory minimums. Competition keeps slot paybacks well above the minimums. A casino could order a few really low long-term payback machines and attempt to strategically place them on its slot floor, but the slot directors I've had contact with order roughly the same long-term payback for all of their machines in a particular denomination. They're concerned with trying to create niches in which players feel comfortable playing, either with a theme or a mix of games, on their slot floors. They try to drive profit by increasing play, not by increasing hold. A new slot's sell sheet frequently cites manufacturer studies showing that the slot outperforms the average slot. The new slot accomplishes that feat not by paying less than the average, but by encouraging more play.

Best of luck in and out of the casinos,
John

Send your slot and video poker questions to John Robison, Slot Expert, at slotexpert@comcast.net. Because of the volume of mail I receive, I regret that I can't reply to every question.

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