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Best of John Grochowski

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How can quarter slots have a higher long-term payback percentage than five-dollar slots?

19 June 2007

It's no secret among slot players that higher-denomination machines pay back more than lower-denomination games. Nickel machines have higher paybacks than pennies, quarters higher than nickels, dollars higher than quarters and so on.

The high rollers who take a spin on the $25 or $100 slots are getting the highest paybacks at all --- though they're still not getting as good a deal as a blackjack player who learns basic strategy or a craps player who bets pass plus free odds.

Nonetheless, not every high-limit game is a high-payer, and not every low-denomination machine is a coin gobbler. And sometimes the math of the games, along with a statistical illusion or two, will yield some odd-looking payback figures.

That's pointed out by a Hawaiian reader, who e-mailed me to ask about some strange-looking statistics.

He wrote, "I've read countless times that (in general) the higher the denomination, the higher the payback percentage. One explanation is that it costs the same amount of money to have a nickel slot occupy floor space vs. a dollar slot, so the casinos have to hold a higher percentage from the nickel slot to make the same amount of money as the dollar slot.

"This makes sense to me. What doesn't make sense is that I've seen payback percentages for $5 slots LOWER than quarter slots in the latest 'Loosest Slots' section of Strictly Slots magazine as well as some of their monthly payback percentages for the same areas. How can that be? Even www.americancasinoguide.com (which pulls their info from the Nevada Gaming Control Board) lists $5 slots on the Boulder Strip (in Las Vegas) at 95.4 percent while quarters return 96.31 percent."

Quarter slots paying a better percentage than $5 slots? Certainly a cause for wonder, but really it's just a matter of interpreting statistics.

If we were dealing with reports from individual casinos, the cause could be sample size. Payback percentages on $5 machines in a short time period can vary wildly just because they're played less than quarter games. The effect of one big jackpot beyond average, or the shortfall of one jackpot, can move the percentages. Over a longer period with more play, the machines will come nearer their programmed percentages.

But my Hawaiian reader wasn't talking about one casino. He was talking about an area with a couple of dozen casinos, Las Vegas' Boulder Strip. For those of you not familiar with that area, the Boulder Strip centers on Boulder Highway in Las Vegas, with casinos that mainly appeal to local customers. Among the Boulder Strip mainstays are Sam's Town, Boulder Station and Arizona Charlie's East.

The key here is that the casinos appeal to Las Vegas locals. What's the most popular game among Las Vegas locals? Video poker. And the most-played denomination for video poker remains quarters.

If you've never checked out a Las Vegas locals casino, the composition of the slot floor might surprise you. Typically, more than half the electronic gaming devices are video poker machines, compared with 15 percent or so on the tourist-oriented Las Vegas Strip. There's plenty of competition for the locals' gambling dollar, so pay tables on video poker games on the Boulder Strip tend to be higher than those on the Strip tourists know and love, the stretch of Las Vegas Boulevard that includes MGM Grand, Bellagio, Caesars Palace, the Venetian and other glamour spots.

Even on the touristy Strip, video poker usually yields a higher payback percentage than slot machines. And video poker is not separated out from the reel-spinning and video slots when it comes time to report payback percentages. They're all just lumped together under the catch-all term "electronic gaming devices."

So in the Boulder Strip, you have an area where more than half of electronic gaming devices are video poker games, and the video poker games are relatively high payers. That has an enormous impact on the reported payback percentages.

If you were to play Double Diamonds slots on the Boulder Strip, would you get a higher payback percentage playing for quarters than if you were playing for dollars? Not likely. The rule of thumb applies --- higher-denomination games pay more than lower-denomination games.

Reported payback percentages make it look like quarter games pay more than $5 games on the Boulder Strip, but normal rules apply. If you're a video poker player, compare pay tables for the best deal, as usual. If you're playing reel-spinners or video slots, don't count on getting a higher payback on a lower denomination. It's an illusion, a statistic skewed by all that quarter video poker.

** ** **

While we're talking payback percentages, a note of caution: Even though a higher-denomination slot usually pays a higher percentage, it also keeps more of your money. Understand that 4 percent of $5 is more money than 8 percent of a quarter. A quarter machine paying 92 percent will keep an average of 2 cents per credit wagered, and a $5 machine paying 96 percent will keep an average of 20 cents per credit wagered. Let the player beware.

Listen to John Grochowski's "Beat the Odds" tips Saturdays at 6:20 a.m., 2:50 p.m. and 7:41 p.m. and Sundays at 8:20 a.m., 2:50 p.m. and 10:42 p.m. on WBBM-AM, News Radio 780 in Chicago, streaming online at www.wbbm780.com, and to his casino talk show from 7 to 8 p.m. Saturday on WCKG-FM (105.9), streaming at http://1059freefm.com.

Recent Articles
Best of John Grochowski
John Grochowski

John Grochowski is the best-selling author of The Craps Answer Book, The Slot Machine Answer Book and The Video Poker Answer Book. His weekly column is syndicated to newspapers and Web sites, and he contributes to many of the major magazines and newspapers in the gaming field, including Midwest Gaming and Travel, Slot Manager, Casino Journal, Strictly Slots and Casino Player.

Listen to John Grochowski's "Casino Answer Man" tips Tuesday through Friday at 5:18 p.m. on WLS-AM (890) in Chicago. Look for John Grochowski on Facebook and Twitter @GrochowskiJ.

John Grochowski Websites:

www.casinoanswerman.com

Books by John Grochowski:

> More Books By John Grochowski

John Grochowski
John Grochowski is the best-selling author of The Craps Answer Book, The Slot Machine Answer Book and The Video Poker Answer Book. His weekly column is syndicated to newspapers and Web sites, and he contributes to many of the major magazines and newspapers in the gaming field, including Midwest Gaming and Travel, Slot Manager, Casino Journal, Strictly Slots and Casino Player.

Listen to John Grochowski's "Casino Answer Man" tips Tuesday through Friday at 5:18 p.m. on WLS-AM (890) in Chicago. Look for John Grochowski on Facebook and Twitter @GrochowskiJ.

John Grochowski Websites:

www.casinoanswerman.com

Books by John Grochowski:

> More Books By John Grochowski