During the late 1980s, a new term began to circulate amid people who play slot machines: “payback percentage.” The term was pushed by experts in the casino industry, as well as the then-new consumer magazine Casino Player, for which many of those experts wrote.
That magazine had taken the “hold percentages” required to be reported publicly by casinos—the portion of all wagers held by casinos as revenue, or “won” from players by the casino—and flip-flopped them to show the casinos that gave the highest percentage of all bets returned to players as wins. The casinos giving back the most to players were identified, and advertised the fact they had “loose slots.”
Over the ensuing decades, avid slot players have sought out the highest payback percentages available. What they did not know was that casinos, when purchasing slot machines, chose a game program from perhaps five for any given game, partly based on a theoretical payback percentage—a surprisingly accurate figure arrived at through millions of computer-generated simulated spins.
These theoretical payback percentage numbers were solely for the casinos’ slot officials, who would choose a theoretical payback number according to their own policy. As far as players were concerned, no one could go into a casino and know which games had the top theoretical payback. Unless it was for the sake of marketing, there was secrecy surrounding the theoretical payback of any given game.
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Players Do Your Research
The still-nascent online casino industry has thrown that policy on its ear. Players can find out the theoretical payback percentage of any given game either directly on the internet casino site or through a simple Google search on a game. Instead of payback percentage, it’s now called “return to player,” or RTP.
Players can now pick the games with the highest theoretical RTP, and only play the highest-returning games. However, how many actually understand what the RTP is? Many misconceptions still surround the RTP, so here’s a primer on what it is, and what it isn’t.
As noted, the RTP is determined by the game’s programmer, and it’s all about the numbers. A programmer will assign a number to each reel result on a map of a slot’s reels. He or she then will assign duplicate numbers to the symbols. High-paying symbols will be assigned only a few numbers; low-paying symbols and blanks will be assigned many more. Once the program is complete, those simulated spins test the math, and a theoretical RTP is calculated. That’s the number displayed on the online games and on internet descriptions of those games.
Some people believe that the RTP applies to every spin. It does not. It applies to the expected life of a game—years of spins by thousands of different players. A 96% RTP does not mean you will win 96% of the time you play a game. It means that the game will pay out 96% of the total wagers placed on it, over time.
In fact, a 100% RTP—actually available on a few video poker games—means only that players will win 50% of the time. On any given isolated play session, you can still lose big on that game. It can be compared to a coin flip. A coin flip can be said to have an RTP of 100%. That doesn’t mean you’re going to flip tails every time.
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RTP Explained
A better way to view the RTP is in terms of the house advantage, or house edge. A 96% RTP means a game has a house edge of 4%. In terms of the slot business, that’s a 4% “house hold,” or “casino win.”
The good news is that the house edge is much lower online than in a physical casino. Take a game offered in the penny denomination. Online, most of them have a house edge somewhere around 4% or 5% —an RTP of 95% or 96%. On a casino slot floor, that edge is 10% or more on penny games. (The hold numbers have grown—casinos “tightened” their slots after the 2008 recession, and again after the Covid-19 casino closures.)
So, from strictly an RTP perspective, you can’t beat online slot games. But there’s no way they’re going to put the brick-and-mortar casinos out of business, for reasons of ambiance, the resort experience, and the entertainment of a night out in a casino.
Just remember the proviso: Even with a 100% RTP, half the players will lose over time.
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