calculating probability for slot machines

'With real slots, the price isn't marked anywhere.' Advertisement

(If it's 90%, the casino's take-and the player's loss-is 10% of the coin in, for example.) But how can casino operators determine the best house advantage for their bottom line within that range? 'It's really a pricing issue, because it's a unique product,' said Lucas. The house edge for slot machines typically falls between 5% and 10%, with most machines delivering a payback percentage in the 90% to 97% range. 'We never had time to solve them, because the decision horizon is so short in business, and you don't have the chance to do that longer-term academic thinking.' The price is right 'Most of the research questions I've pursued came out of the problems we faced in the industry,' he said. He has been conducting research at UNLV for the last 20 years. Lucas worked in Lake Tahoe as an operations and financial analyst in gaming right out of college for some 34 years, so he has a longstanding interest in the types of challenges facing the industry. This is where our work becomes helpful, as most operators do not know which par will optimize revenues.' 'After a casino operator decides to buy the game, they must then decide which of the five licensed pars (aka pay tables) to install. 'When slot machines are made, the manufacturer will license multiple pay tables (usually around five),' said co-author Anthony Lucas, a professor at the University of Nevada, Las Vegas.

It's all about manipulating the payback percentage: the percentage of the 'coin in' that a player gets back when they're done with the game. Slot machines are the source of most of a casino's revenue. But the math says otherwise, according to a recent paper in the International Journal of Contemporary Hospitality Management. There's a corresponding long-held belief among casino operators that experienced players can actually sense shifts in how much and how often a particular machine pays out-that is, they can detect subtle differences in the house edge between machines. Some gamblers think they can get around this by jumping from slot machine to slot machine, for instance, in hopes of hitting one at just the right time to win a big payout. That's because casinos maintain a small house 'edge'-not enough to scare gamblers away, but sufficient to ensure that the house ultimately comes out ahead. It's a well-worn mantra that when it comes to casinos, the house always wins, at least in the long term. Arterra/Universal Images Group/Getty Images reader comments 167 with

Calculating probability for slot machines