Can Casinos Control Slot Machines?

Do you wonder if casinos can control slot machines and rig the games so that nobody ever really wins? That’s among the most common gambling myths. Like any good myth, this one has a real-world origin. Casinos can and do manipulate the rules and other features to ensure that the house always profits. This isn’t quite the same as “rigging slots,” at least not in the eyes of most gamblers.

It IS technically possible for a casino to run a gambling machine rigged to only pay out small wins. But it doesn’t make any sense for casinos to do so.

This post lays out the reasons why casinos don’t need to rig games to consistently make money. Here’s your answer to “can casinos control slot machines?”.

Here’s Why Casinos Can’t Control Slot Machines

Some people imagine it like this:

Rows of casino employees sitting in a dark room in the bowels of the casino controlling every slot machine. They’re ensuring that no customer makes too much money.

That’s unrealistic.

Heavy Regulations Apply

For one thing, slot machine gambling is heavily regulated. Almost every state that’s legalized gambling has a gambling commission controlling slot machine payouts. These are powerful law enforcement organizations, like the New Jersey Casino Control Commission that oversees gambling in Atlantic City, or the Nevada Gaming Commission that controls slot play in Vegas. American casinos must follow strict  rules regarding their gambling machines. These rules apply to other games they run, too. Or they run afoul of these commissions.

These state gaming commissions require statements on each machine’s data. These include updated return-to-player expectations and the games’ variance. These commissions also insist on the use of random number generator technology to produce unpredictable game results.

I can only think of one large-scale gambling operation that isn’t heavily regulated by a commission like this – New Mexico. Tribal casinos in New Mexico aren’t required to host games within a specific house edge range. And they aren’t required to report any game statistics or anything like that.

New Mexico and Lack of Regulation

In rare cases, US slot machine play isn’t regulated by a state commission. New Mexico is a good example. You’d have to think the market would limit how much a game could rip off its customers.

What would happen in this situation?

What if I opened a casino in New Mexico and set all the slot machines to have a 99% house edge?

It wouldn’t take long for word to get out about my awful slot machines.

Eventually, I wouldn’t have any customers.

I think the reason some people feel like slots are controlled by casinos is that they don’t win big prizes very often. This is strange to me since people are perfectly willing to accept variance in other contexts. Any baseball fan would drool over a batter who earned a hit on 40% of his at-bats, and every four years we accept the results of a nationwide presidential election that hinges on just a few tenths of a percent difference in vote tallies.

Here’s Why Casinos Don’t Need to Control Slot Machines

If you think about it, a slot machine’s house edge is just a statement of how badly that game is rigged against you. If I choose to play a penny slot that’s set to an 88% RTP, I’m choosing to play a game that’s going to take 12% of each of my bets from me.

You could do this with other casino games. If I place a single number bet on roulette, that bet is rigged against me to the tune of 37:1. The casino is 37 times more likely to win that bet than I am.

This isn’t what most people mean when they talk about a game being rigged. But this argument is exactly why it makes no sense for casinos to control slot machine payouts and rip off their paying customers.

Slot machines are profitable. Operated completely within the boundaries of gambling law, and without any need for intervention on the part of the operators, a slot machine will return a profit to the person running the game.

The Nevada Gaming Control Board’s Gaming Revenue Reports regularly show profits from slot machines are double what casinos make from every other game on the floor combined. This isn’t because slot machines are all crooked, rigged games designed to separate people from their money. It’s because slot players accept a certain amount of risk and variance in exchange for entertainment and (occasionally) a decent cash prize.

At last count, Las Vegas was home to about 47,680 penny slot machines. Each of these machines produced an average profit of $76,479 for its operator. These games are by no means controlled to produce that result – at least not beyond the usual means of control that a game’s designer has over that game’s outcomes.

What Casinos CAN Control about Slots

Let’s say you’re a casino operator and you want to add a slot machine to your gaming floor. You have control over certain aspects of that game, including:

• manufacturer
• style/design
• denomination range
• payback percentage range

Beyond that, you don’t have a lot of control. Rarely is a slot machine designed in a bespoke fashion for a specific casino or gaming customer. Instead, casino operators look for new games, games that are successful in other casinos, popular licensed games, etc.

A casino operator can indeed order a slot machine that’s set to a specific payback percentage, or a machine that can be set in a wide range of payback percentages so that the game can be modified to fit into the casino’s ever-shifting strategy. Again, that’s not quite the same thing as offering a game that’s been rigged to steal money from gamblers.

Casinos are way more likely to request a game in a specific color so that it matches the other games in a part of the casino floor where they want to put it than they are to try to request an illegal game that will help them steal a few more pennies from their customers.

What Casinos CAN’T Control about Slots

Most people who ask me about casinos rigging slot machines think that casinos control payouts based on a customer’s recent history. Their logic goes something like this, “If I just won a $20 payout, the casino is going to make sure I spend at least another $20 before they pay me out another meaningful prize.”

While I understand the logic behind this theory, it implies way too much control and active monitoring on the part of the casino and doesn’t reflect the reality of a gaming floor. But, again, like any good myth, it borrows from the real world.

Casinos do track your play, to your benefit. Loyalty club members earn rewards in exchange for their level of play. This form of tracking is beneficial to slots players, as slots club freebies chip away at the casino’s edge, one free cocktail or hot dog buffet at a time.

Here’s what casinos don’t do:

Casinos don’t track every slot player live and manipulate machines to control outcomes.

Honestly, this is way too much work, especially considering that the legal and regulated rules of slot machines allow casinos to host games designed to win money over the long haul. Why rig games when the legal versions are, technically, rigged in the house’s favor to begin with?

Casinos don’t change machine payouts in the middle of player sessions.

Even if this is technically possible, it doesn’t make any sense to assign this task to an employee whose time could be better spent dealing with customer service issues. I’m not at all convinced that an individual player’s short-term profits would be worth the investment of time and technology this would require.

Casinos don’t like to do anything that would push customers to a competitor.

Slot machine players are a rowdy lot. We talk to each other, we post videos on YouTube, and we leave lots of reviews. Don’t mess with us. If a casino started ripping off players, not only would we all know about it within minutes, but we’d blacklist the casino and send our cash to their nearest competitor. Why risk that when slot machines win in the end anyway?

Conclusion

Slot machines produce numbers that gaming commissions check in on from time to time. These numbers must line up with whatever audit is being run. Otherwise the operator gets in big trouble with a state-level authority. That authority will investigate and arrest wrongdoers.

Besides, casinos make money operating games within legal boundaries. Should a rogue machine make it onto a casino floor, the fines and investigative headaches wouldn’t be worth the tiny increase in profit. Not only is it unlikely that you’ll come across a rigged game in a modern casino, but it also just doesn’t make good business sense.