Do you play slot machines?
What most people don’t know is that slot machines are big business.
Slot machines and other video gambling options are a big bulk of the dollars earned by casinos.
Did you know that most Midwestern Casinos make the majority of their revenue from these games?
Slot machines make up a little bit less than 90% of their annual profits.
The big question is this:
Should you play slot machines?
I don’t think so. Let me tell you why:
What is it that makes slot machines such big moneymakers?
Slot machines have the advantage of masking their true cost to the player than other gambling options.
When a player drops a 25 cent coin into a slot machine they think that is the cost of their game. The player couldn’t be more wrong. Let’s take a look at the real cost of playing slot machines:
The Real Cost of Slot Machines
There’s an economic theory known as, Law of Supply and Demand. This law says that the value of something is in higher need the consumer price falls. If you flood the market with something, the demand is going to fall.
This theory completely depends on a term called price transparency. This idea is for the everyday purchases we make on everyday purchases. This common type of spending is along the lines of grocery stores and Amazon purchases.
The types of items that fall under price transparency are food items, Amazon purchases, and other household and consumer goods.
What doesn’t fall under this category is services rendered that we don’t know the final cost of.
Think doctor’s appointments and car repair work. You just can’t know the final cost of the replacement of your radiator. There are too many factors involved like labor and wait time on the part(s).
Slot machines are an even iffier outcome than the final bill of your car’s repair. This is true because we don’t have a way to predict the true cost of our wagers at slot machines.
And this throws the idea of supply and demand out the window.
Casinos determine the price of the average or projected house edge on every wager placed by gamblers in their casino. This is also viewed by casinos as the long-term edge built into every game they offer.
For an average gambler, their small time frame playing the slot machine will bring a “price” that is a lot different than the original 25 cent coin dropped into the machine.
Let look at an example:
Let’s assume the slot machine has a 10% house edge. (This is pretty normal for slot machines.)
This 10% house edge, in the long run, will earn the casino % of all the money played on that machine.
Let’s say the machine has $100.00 played on it over 200 spins.
The payout would be $90.00 to the gambler and $10.00 to the house.
From the casino’s point of view, the price it charges to play the slot machine is 10% of what the long-term spending of the players.
From the player’s point of view, they see the cost of play by what they spend per s[end. If they put in a dollar to spin the slot machine once and it doesn’t payout, the slot machine costs $1.00 to play. Not the 0.10 to win (the casino’s win).
You’re asking yourself, so who’s right?
They both are correct.
The game has collected $1.00 from the player. The casino has factored in that 90 cents of that $1.00 will be paid out to other gamblers.
A person gambling on a slot machine could never realize this, The player will most likely only play that specific slot machine for a couple of hours. That time sent on that machine will give the player big hopes of a huge payout to balance their time spent playing.
At this approach to playing, the slot is almost fruitless. It could quite possibly take one person years of playing that exact slot machine to finally hit a big.
That’s not a good use of time.
Playing the Long Term
The cost that the gambler views when playing a slot machine is based on the view of their time spent playing the slot machine in the casino. The casino is looking at the long term payout of the slot machine to players while the player looks at the 1-2 hours they will commit to playing the machine.
The ability to see the long term approach casinos take to slot machines is an advantage most veteran players are able to see. Let’s take a look at an example to make this theory a bit more clear.
Joe, who just got paid, heads to the casino with 100.00 to play on slot machines over an hour on Saturday afternoon. Joe has three possible endings for the day:
- Joe loses all his money and goes home with less money he started the day with.
- Joe hits the big jackpot on a slot machine and goes home with A LOT more money than he started his day with.
- Joe breaks even and leaves with the 100.00 he started with.
Obviously Joe would like to come home with big winnings on his time spent playing slots.
But the second choice for Joe’s time at the casino is to come home breaking even.
He got to the casino with $100.00, played for an hour, won a little and left with his $100.00.
No harm, no foul.
Unfortunately, the first scenario is more likely than the other options.
More players lose than win.
This is essential for the casinos to be profitable businesses.
And they are more than profitable; they’re hugely profitable.
The big jackpots are paid by all the other gamblers that have lost money on those slot machines. Those losses = one big payout on almost all slot machines. That is the basics of the slot machine business
You’ve heard the saying “You win some and you lose some”?
In the case of slot machines, it’s more like “You win one and they lose a lot”.
It’s almost like the biological term symbiosis.
If there were no losers, there would be no big payouts on slot machines for the casino.
The casino would get a bad reputation for having no winners — which is a death sentence for casinos.
What most players don’t see is the long term payout on slot machines in casinos. Slot machine gamblers do not sit down with the mindset that I have to play this exact machine for X amount of spins to get that big jackpot. They want the immediate gratification of the big win.
If this was the mentality of most players the would be able to see what that first spin was worth. If slot machine players could see the cost of playing slot machines I think there would be a steep decline in the popularity of slot machines would see a steep decline in casinos.
No Slot Machines? What Should I Play?
I have given you plenty of incentive to stop playing slot machines.
But what should a regular slots gamblers play instead?
There are a plethora of games that have better odds of winning.
Here are my top 3 games to play at casinos instead of slot machines:
1. Blackjack- Blackjack has much better odds of winning than casino slot machines. Also known as 21, this traditional table game favorite is one of the most popular card games at casinos. Your odds than slot machines. There are plenty of how-to sites on the internet about how to play, and more importantly, how to win! Give it a try.
2. Poker- Poker is probably the most infamous game when people think of gambling games. The house doesn’t have much at stake because players are playing against each other with their own money. It’s a great game to play, only if you have a great poker face. Look it up, you’ll have a blast playing poker instead of wasting your money on slot machines.
3. Craps- Craps is a dice game where players bet on where their dice throw where they will land on the table. Its a lot of fun, better odds than slot machines, and there is usually a lot of excitement around the craps tables. It is a great way to get to know people.
I have gone over how slot machines work, how the casino odds work, and why that one winner is piggybacking off all the time other players have wasted their money.
In the short run, slots are fun, but you are rarely going to hit that big jackpot everyone dreams about.
You now have the information you need to know why you should stop play slot machines. Try some of the table games. They are fun, have better odds of winning and you will likely walk away with more of the casino’s money in your pockets.
I would love to hear your thoughts on playing slot machines in casinos. Please feel free to leave a comment or questions below.