How slot machines work?

Preface
People that have visited a casino at least one in their life have definitely heard the sounds of slot machines paying out coins. In fact, every casino has a special hall dedicated to the one-armed bandits. These machines have also found their ways into bars, amusement centers and betting parlors. A slot machine provides the easiest gambling opportunity for betters. Even though slots offer negative payouts, the possibility of scoring a jackpot is what drives people to play. Many gamblers often try their luck with slots. One-armed bandits provide a perfect game of chance. A person either wins or loses. More often than not, slot players end up losing a lot of money and emptying their wallets. However there are gamblers that believe in winning streaks that can lead them to get a jackpot. Jackpots are very rare and it can take many spins to receive one. Overall slot machines are bought by casinos to get the most revenue out of the devices.
One of the most attractive aspects of slots is that they are games of pure luck. Thus there is no strategy behind playing slots or any expert advice that a person can take. Come to the machine and pull the lever. If luck is on the player’s side, they will win. Otherwise it is going to be a loss. Many players see slot machines as evening out the battlelines between seasoned gamblers and an average player. The possibility of winning an even small jackpot is what draws people to the one-armed bandits. Often players can forget how much money they have put into the machine. Casinos specifically dim the lights to make people wager more money on the games. Slots are actually extremely popular, with some casinos receiving a vast majority of their revenue from the slot machines. Machines’ simplicity and ease of use attracts a lot of people from around the world.
Card games such as baccarat or blackjack require skill and patience from the player. Further, the maximum winnings are not that large. A gambler has to be a professional blackjack player and game for many long nights to obtain large winnings from the activity. Slots, on the other hand, offer the possibility of an instantaneous large win to the player. Thus, to a person putting their money into the machine, the chance of getting a large jackpot is what draws them towards playing. People often read about others winning thousand or even million dollar jackpots from slots. The machines’ simplicity and randomness excite novice players that find table roulette or blackjack too difficult. Although it is important to remember that the odds in a slot machine are always against the player. Thus an individual will end up losing their money over the long term, if they keep on playing the game long enough.
The article presented will cover the following topics:
How do one-armed bandits work?
The mathematics behind slots.
How profitable are slot machines for the casinos?
The psychology behind playing slots.


How do one-armed bandits work?
In their basics, slot machines use random number generators. These programs generate a random number every time someone pushes the lever. There are reels on the machine that spin. Should a certain series of symbols come up on the reels, then the machine pays out the winnings. Otherwise, it is a loss. Most slots have either three, five or seven reels in the machine. Each reel spins at random to generate a certain pattern. Should the reels generate a particular combination, a payout occurs. Sometimes the reels align themselves to give the magic jackpot. In this case, the player walks away with solid winnings. Though most of the time this is not the case.
Previously, these reels were mechanical and pulling the lever activated the mechanism inside the machine. As the reels were spinning, players would wait in anticipation of the lucky combination. For example, if a slot machine had three reels with ten symbols each, then there would be 10 thousand possible combinations to generate. However modern casinos have done away with mechanical machines and computer technology has paved the way for microprocessors to take over. Almost all slots found today will feature a silicon chip inside determining the outcome of the game. This has allowed for a vast increase in the possible games that slots can offer gamblers.
A random number generator will pick a certain series of numbers once the player has issued the command to the machine. Since it is all done by computers, there are no patterns or any other structure that can be seen on the device. Slots are simply a game of pure luck. Whereas mechanical reels are somewhat limiting and can break, electronic slots are far more durable and are said to offer a better gaming experience. Many online bettings sites, such as the qataronlinecasino, offer video slots to their customers. People can play video slots online from their computers, trying their luck with a series of random numbers and virtual reels spinning in front of them.

The mathematics behind slots
A slot machine will have a silicon chip inside generating a series of random numbers. Each time a player pulls the lever or presses a button, the computer program is told to generate random numbers. One digit for each reel. Thus, a slot machine with five reels will have five random numbers generated by the program. For most modern machines, the number produced can be anywhere between one and a billion. Further, as each reel has ten symbols on it, the computer program will have a datatable matching each number generated with a particular symbol on the reel. For example, there will be a hundred million possible numbers attached to each of the ten symbols on every reel.
As certain symbols on the reels pay more than others, there will be fewer numbers attached to these symbols For example, out of one billion possible numbers, only ten million will be attached to a high paying symbol. On the contrary, three hundred million numbers will be attached to the lowest paying symbol on the reel. And there will be at least three reels on the machine. To get a high paying jackpot, the symbols have to match on each of the three slot reels. Needless to say, receiving high winnings from slots is extremely unlikely. In fact, the probability of scoring the Megabucks jackpot is one out of 50 million. An average player can easily expend all their earnings trying to get the jackpot.

How profitable are slot machines for the casinos?
As slots are a simple game of chance, it is interesting to see what odds are offered to the players. On average, one-armed bandits will have a 80-98% payment ratio. With the latter number being the maximum that casinos offer. To put this number in simpler terms, a slot machine will return from 80 to 98 cents on every dollar waged. So the odds here are stacked against the gambler and in favor of the house. Of course a person needs to play a lot for them to experience the losses. This is because the payment ratio manifests itself over the long run. Casinos tend to generate a lot of their revenues from slots. As the minimum bet can be as low as a dollar, many small time gamblers are attracted to the one-armed bandits to try their luck winning the jackpot.
According to the research done, casinos can receive as much as 65-80% of their gambling revenue from slot machines. Further, some casinos catering to small time and local players can get up to 88% of their income from the one-armed bandits. Of course, gaming houses that attract big players will focus more on card games or table roulette. Although jackpot winnings can be huge for slots, many seasoned and wealthy players will prefer to shun them. Table games can generate 50% of casino revenues for elite casinos that attract wealthy individuals. Rich people will tend to place large bets on table games, such as blackjack or roulette, and withhold their money from slots. Further, card games require a degree of skill to play them and can thus be more interesting for the seasoned and wealthy gamblers.
Even though slots are simply games of chance, or luck, there have been large jackpots paid out. The nearly $40 million dollar prize was paid out in 2003 to an unknown computer programmer. For now, this is the largest jackpot that has ever been won. However, machines which deliver massive jackpots have the odds skewed much more towards the casino. Whilst slots that offer low jackpots tend to benefit the player. The higher the reward, the higher the risk of losing money, and the more the house will make. Jackpot probabilities usually vary from 1 in 30 thousand for small jackpots, to 1 in 50 million for massive ones. Casinos profit by offering large jackpots as this lures players towards pricier slot machines. There gamblers will spend a lot more money trying to hit the prize.

The psychology behind playing slots
Slots have been called one-armed bandits because the machines can trick players into depositing all their cash into the device. As players expect big winnings, losing a hundred dollars does not seem too devastating. However there is an even greater problem with slots. Most know that when the price of a particular item increases, the demand for the product drops. However this is not always the case with the slot machines. The main difference is that players tend to have a short run view of the game, while the casino management will look into the long run. Thus the two parties will measure the price of the game differently.
For example, if a gambler places one dollar into the slot machine and loses, the price of the game for the player is one dollar. This is how most people analyze their gambles. Casinos, on the other hand, will look at the edge that the slot machine provides them with. For example, if a house has a 10% edge, the establishment will make a 10% profit on a particular machine over several years. Here the management of the house will take a long term view and look at how much profit on average slot machines will generate. Of course, this edge will take into account the large jackpots that have to be paid out. Overall, in order to pay out the jackpots, casinos will use the money that small time players have gambled away. This way the establishment can remain profitable.
What is more interesting, is that research has found that when the long term price of a slot machine increases, demand for the product does not fall. For example, should the house increase its edge on a machine from 10 to 15%, players will still be actively engaged gambling with their earnings. Although counterintuitive at first, the results can be explained by casinos hiding the odds from the participants. Thus, a gambler does not truly know what the odds are on a particular machine. Or how much the house makes from the slots the player is gambling with. So when the edge is increased in favor of the house, the player is unlikely to simply stand up and walk away. Although economics teaches that with an increase in the price of a product demand goes down, this is not always the case with the one-armed bandits.
The machines hide the expected earnings, or how much a player should make on average from each bet, from the gamblers. Casinos do not often disclose the odds on their games, hence the relative price of the slot machines remain hidden. As the managers of the gaming house want to generate as much revenue as possible, the odds in slot machines can be drastically reduced against the players. In other terms, the price of each gamble can massively go up with the players simply not understanding the change.



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By: Alex Volski

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