How Slot Machines Work
The slot machine has evolved from spinning drums and reels to sophisticated chips and touch screens, though the basic concept of the game remains the same - match certain symbols and win a certain prize. The following is a look at the inner workings of today's slot machines.
Random number generator
It is a common belief that the odds on a machine have something to do with the number of symbols on each reel, but in modern slot machines this is no longer the case. Modern slot machines are computerized, so that the odds are whatever they are programmed to be. In modern slot machines, the reels and lever are present for historical and entertainment reasons only. The positions the reels will come to rest on are chosen by a Random Number Generator (RNG) contained in the machine's software.
The RNG is constantly generating random numbers, at a rate of hundreds or maybe thousands per second. As soon as the lever is pulled or the "Play" button is pressed, the most recent random number is used to determine the result. This means that the result varies depending on exactly when the game is played. A fraction of a second earlier or later, and the result would be different.
Some professional gamblers observe that the RNG does not actually generate random numbers. Indeed, all RNG (also called Pseudorandom Number Generators or PRNGs) will eventually repeat their number sequence. This behavior is due to poor programming, as it is relatively easy to build PRNGs with periods so long no computer could complete a single period in the expected lifetime of the universe.
Having access to the PRNG code and seed values, Ronald Dale Harris, a former slot machine programmer, discovered equations for specific gambling games like Keno that allowed them to predict what the next set of selected numbers would be based on the previous games played.
Payout percentage
Slot machines are typically programmed to pay out as winnings between 82 to 98 percent of the money that is wagered by players. This is known as the "theoretical payout percentage".
The minimum theoretical payout percentage varies in every country or state and is typically established by law or regulation. For example, the minimum payout percentage in Nevada is 75 percent and in New Jersey is 78 percent.
The winning patterns on slot machines, the amounts they pay, and the frequency at which they appear are carefully selected to yield a certain percentage of the cost of play to the "house" (the operator of the slot machine), while returning the rest to the player during play.
Suppose that a certain slot machine costs $1 per spin. It can be calculated that over a sufficiently long period, such as 1,000,000 spins, that the machine will return an average of $950,000 to its players, who have inserted $1,000,000 during that time.
In this (simplified) example, the slot machine is said to pay out 95%. The operator keeps the remaining $50,000. Within some EGM-development organizations this concept is referred to simply as "par".
"Par" also manifests itself to gamblers as promotional techniques: "Our 'Loose Slots' have a 93% Pay-back! Play now!" As an aside, the "Loose Slots" actually may describe an anonymous machine in a particular bank of EGMS.
A slot machine's theoretical payout percentage is set at the factory when the software is written. Changing the payout percentages after a slot machine has been placed on the gaming floor requires a physical swap of the software, which is usually stored on an EPROM but may be downloaded to Non-Volatile Random Access Memory (NVRAM) or even stored on CD-ROM or DVD depending on the technological capabilities of the machine and the regulations of the jurisdiction.
Based on current technology, this is a time consuming process and as such is done infrequently. In certain jurisdictions, such as New Jersey, the EPROM is sealed with a tamper-evident seal and can only be changed in the presence of Gaming Control Board officials. Other jurisdictions, including Nevada, randomly audit slot machines to ensure that they contain only approved software.
In many markets where central monitoring and control systems are used to link machines for auditing and security purposes, usually in wide area networks of multiple venues and thousands of machines, player return must usually be changed from a central computer rather than at each individual machine. A range of percentages are preprogrammed into the game software and selected by configuring the machine remotely.
In 2006, the Nevada Gaming Commission began working with Las Vegas casinos on technology that would allow the casino's slot manager to change the game, the odds, and the payouts remotely via a computer. The change cannot be done instantaneously, but only after the selected machine has been idle for at least four minutes. After the change is made, the machine must be locked to new players for four minutes and display an on-screen message informing potential players that a change is being made.
Linked Slot Machines (Progressive Jackpot Slot Machines)
Often machines are linked together in a way that allows a group of machines to offer a particularly large prize, or "jackpot". Each slot machine in the group contributes a small amount to this progressive jackpot, which is awarded to a player who gets (for example) a royal flush on a video poker machine, or a specific combination of symbols on a regular or 9 line slot machine. The amount paid for the progressive jackpot is usually far higher than any single slot machine could pay on its own.
In some cases multiple machines are linked across multiple casinos. In these cases, the machines may be owned by the machine maker who is responsible for paying the jackpot.
The casinos lease the machines rather than owning them outright. Megabucks may be the best known example of this type of machine.
Megabucks Nevada starts at $10,000,000 after a jackpot. (Prior to September 2005, Megabucks Nevada reset to $7,000,000.) The new penny Megabucks video game also has a jackpot that starts at $10,000,000.
Slot machines that are not linked to a large regional jackpot such as Megabucks usually have higher payout percentages, as linked machines have to take into consideration the large jackpot amount into their payout percentage calculations.
Near-miss programming
Because the reel display of modern slot machines is controlled by computer software, it is possible to make the slot machine frequently display combinations that are close to winning combinations.
For instance, if the jackpot combination is "7-7-7", a slot machine could be programmed to frequently display "7-7-(non-7)". This can fool the player into thinking they "almost won", teasing them into playing more often.
This practice of showing combinations similar to winning combinations more frequently than would occur randomly is called "near-miss" programming. It has been ruled illegal in the U.S. states of Nevada and New Jersey. The Nevada Gaming Commission did review some machines with this type of programming and refused to authorize them.
Near-miss programming, where a near miss is inaccurately displayed (i.e. the player is shown something that is not an accurate representation of the reel strips) is not allowed in Australia either. Due to this, regulators use stop motion cameras to audit manufacturer's practices.
