How Casinos Use Math To Make Money When You Play The Slots | Forbes

My second piece for is a look at what the math of slot machines means for the casino and the player:

Slot machines remain the most important money-making part of casinos in the United States. In many states, casinos make between 65 and 80 percent of their gambling income from slots. In Las Vegas, the percentage varies from 88 percent in casinos that cater primarily to locals to 50 percent on the Las Vegas Strip, where high rollers betting tens of thousands a dollar a hand skews the results in favor of table games. Every day, players put millions of dollars into slot machines. Why?

Read it all: How Casinos Use Math To Make Money When You Play The Slots

So far the reaction to my new writing home has been very positive. Thanks to everyone who made the jump to Forbes with me, and to all my new readers. And a big thanks to Bob Ambrose, who answered my questions very well.

2 thoughts on “How Casinos Use Math To Make Money When You Play The Slots | Forbes”

  1. Darrin Pachman

    Hi Dave,
    Overall a good article, but I believe possibly something may have been incorrectly understood or stated and this is on the calculation of “handle”. Handle is the total amount wagered by the player which is correct. And if the player had $100 in drop and played the machine at an assumed 85% payout (reality most machines are 92%+, state laws say 85% is the lowest in NV) the handle generated theoretically at 85% would be $666.60. For $150, the theoretical handle at 85% would be $999.99 (rounded). At 92%, the theoretical handle on $150 is $1724.82.

    Drop in slot machines from the conception of Bill validators has little to no bearing on slot accounting. Drop can be manipulated simply by inserting a bill and cashing out the same amount without play. The cash out of inserted money does not subtract from drop, (but does from, and not to be confused with, calculated win) therefor drop has just been manipulated. Simply expressed: If a player inserts $100 into a machine than cashes it out without any play, the drop for the machine will show $100, but the handle will be $0.00 (zero).

    Thanks again for your article and looking forward to reading others…

    My background, 25 years in slot management and accounting. Was the youngest slot tech in Atlantic City in 1985 at the age of 19 working for AC coin on the gaming floor of the casinos. (Started actually in 1983 for Transatlantic Games) Experienced in technical, operations, analytics, game mathematics and designs, consultant and presenter to corporate clients understanding slot mathematics in class II and class III, for regions of US, Caribbean, South America, Europe and Middle East.

  2. Makes sense–drop and handle are key concepts.
    For the purposes of the article and people who aren’t as familiar with the concepts, I presented a simplified example, assuming that the player only hit a single $50 jackpot and nothing else. I know that isn’t very likely in the real world, but I think it demonstrated the basic concept.
    Thanks for the input, and for a very impressive career. I will be reaching out for your perspective for future slot articles.

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