Gambling Machines and How They Work

In a modern casino, you’ll see more gambling machines than anything else. The slot machines (or one-armed bandits) are the most profitable game in any casino, and I’ll explore the reasons for that in this post.

But slot machines aren’t the only gambling machines on the casino floor.

You’ll also find video poker machines, which are far superior to slot machines for a number of reasons.

I’ll explore those reasons in this post, too.

Here’s an explanation of how gambling machines work:

How Slot Machines Work

What makes a slot machine a slot machine?

It’s the presence of the spinning reels.

All slot machines are gambling machines, but not all gambling machines are slot machines. The spinning reels are what make the difference.

Traditional real money slots work like this:

You have 3 spinning reels with multiple symbols on them. When you activate the machine by inputting a coin and pulling a lever, the reels spin and land on those symbols at random.

If the same symbols line up across the center of the front of the machine, you win a prize. The amount of the prize is determined by the symbol.

Originally, slot machines were powered by big metal hoops (the reels), springs, and levers. They were entirely mechanical.

Modern slot machines, though, use physical reels that land based on a computer program.

Or they don’t use physical reels at all. This is more common than ever. These video slot machines just have animation on a screen, like in a video game, and the results are also powered by a computer program.

This computer program is called a “random number generator.”

The payouts for the various combinations are determined by the probability of hitting those combinations, but they’re almost always lower than the odds of hitting.

For example, if you have a 500 to 1 probability of getting a specific combination, it might only pay off at 400 for 1.

The difference between the actual odds and the payout odds gives the casino a profit in the long run.

This is called “the house edge,” but most people don’t use the expression “house edge” when discussing gambling machines.

Instead, people talk about the “payback percentage,” which is the other side of the house edge coin.

Instead of representing the average amount of each bet that’s lost over the long run, the payback percentage represents the average amount of each bet that’s won over the long run.

A slot machine with a 5% house edge has a 95% payback percentage.

Over the long run, though, it’s impossible to win at slot machines. The math behind the game ensures that.

Most slot machines have a payback percentage of 75% to 95%, but there’s no real way to know what a payback percentage is for a modern slot machine game.

You don’t know what the odds are for getting specific symbols in any given game—that’s determined by the random number generator which determines the results.

How Video Poker Works

Video poker looks a lot like a slot machine, but it doesn’t have spinning reels. Instead, you’re dealt a 5-card hand on a video screen.

Almost all video poker games are based on 5-card draw, so you get to choose between 1 and 5 cards to discard and replace.

You get paid off on the poker value of the final hand based on the pay table for the game. The jackpot hand is always the royal flush—the 10, jack, queen, king, and ace of the same suit. That only comes up about once every 40,000 hands.

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The royal flush pays off at 200 for 1 unless you wager the max bet—5 coins—in which case it pays off at 800 for 1. This is remarkably consistent from one video poker machine to another.

Other game-play elements, like payouts and wild cards, vary wildly from one video poker game to another, but the top hand is almost always the royal flush, and the payoff is almost always 800 for 1 on a 5-coin bet, but less if you bet fewer coins.

This makes the first aspect of video poker strategy easy—you always place the max bet of 5 coins.

There are no advantages to wagering fewer coins, and the lower payout for the top hand changes your expected results more than you probably think.

The Difference Between Video Poker and Slot Machines

The major difference between video poker and slot machines is the difference between reels with arbitrary symbols and arbitrary symbols and a deck of playing cards.

There’s no way to calculate the payback percentage of a slot machine, because you have no way of knowing what the probability of getting any of the symbols is.

For example, you might be playing on a slot machine where cherries are programmed to come up 1/8 of the time, but apples might only be programmed to come up 1/16 of the time.

An identical slot machine next to this example machine might have entirely different probabilities programmed in. The cherries might be programmed to come up 1/10 of the time, and the apples to come up 1/32 of the time.

The payback percentage for the game is based on the payouts for the combinations AND the probability of getting each combination.

Without the probability, you can’t solve for the payback percentage, which is the “unknown” in the equation.

But video poker games are different.

The symbols on a video poker machine are based on a deck of playing cards.

And if it’s a legitimate video poker game, the probabilities for getting each card are identical to the probabilities you’d have in a real card game.

Since you know that a deck of cards consists of 4 suits with 13 ranked cards in each suit, you can calculate any probability you need to related to your results.

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This also affects your strategy for the game. Deciding which cards to hold and which ones to discard is a critical aspect of video poker strategy.

With slot machines, there is NO strategy, ever.

The payback percentage on a video poker game is something that can be calculate, and it usually ranges from 95% to 99%.

Keys to Success with Gambling Machines

If you’ve been paying attention so far, you’ve probably already figured out the first key to success with gambling machines:

Play video poker instead of slot machines.

Remember how I pointed out that the payback percentage for a slot machine ranges from 75% to 95%?

And the payback percentage for a video poker machine ranges from 95% to 99%?

That was your clue to the first aspect of gambling machine strategy.

Always go for the game with the highest payback percentage and the lowest house edge.

You’ll still go broke in the long run if you play long enough, but you’ll take longer doing so.

And since the point of casino gambling is entertainment, your goal should be to get the maximum amount of entertainment for your gambling dollar.

The other key to success with gambling machines is to always join the slots club and always play with your casino players club card inserted. As weird as it sounds, casinos want you to use your players card.

The card is meant to track how much money you’re gambling so that the casino can reward you (incentivize you) with rebates.

They calculate these rebates based on a percentage of the action you’re bringing the casino. This usually amounts to between 0.1% and 0.3% of your action.

That doesn’t sound like much until you start doing some of the fancy math that casino experts like to do.

The first thing to do is calculate how much you can expect to lose in the long run on a gambling machine.

Let’s take, for example, a Jacks or Better video poker machine with a 99.54% payback percentage. The house edge for that game is 0.46%, which is the amount you’re expected to lose in the long run on that game.

If you play a \$1 video poker game and make the max bet each hand, you’re gambling \$5 per hand. If you’re an average video poker player, you’re playing 600 hands per hour. (It’s a fast game.)

That’s \$3000 per hour you’re putting into action, and your expected loss is \$3000 X 0.46%, or \$13.80.

If you’re getting 0.3% of your hourly wagers back in rebates and comps from the casino, you’re looking at getting \$9/hour back from that \$13.80.

How can you turn that down?

Conclusion

Those are the basics of gambling machines and how they work. If you’re already a casino customer, you probably already have a preference when it comes to gambling machines.

Do you think your preference might change now?

In other words, if you’re a slot machine fanatic, do you think you might be willing to try video poker now?