Payout percentages

There is much player confusion about "payout percentage" figures. All casinos list them - on their sites, in their emails, everywhere. A typical figure is 97%. What does it mean, in practical terms? Say I deposit $200. A casino with a 97% payout percentage will on average return to me 97%, which is $194, for an overall loss of $6; correct?

Wrong. The payout percentage is the payout of the casino games and not the payout on the deposits the casino receives.

If I play a slot machine with a payout of 95%, I will lose at a rate of 5% of the money I wager and the casino will "pay out" 95%. That wagered money is in no way related to the deposited money in terms of casino payout. I can deposit $50 and wager $500, or I can deposit $1000 and wager $15. My losses are based on my wagering and not on my deposits.

Wagering $3000 on this 95% slot machine, the casino will hold $150 on average and "pay out" the remainder of my $200 deposit - $50. The casino is ultimately going to pay me just 25%, yet the game STILL had a "payout" of fully 95%!

In fact, to take this scenario to its ultimate conclusion: in order to lose my deposit entirely on this particular game, I'd simply need to wager an average of twenty times my deposit - $4000. This would guarantee that I would receive an average payout of...wait for it...$0! - still playing a machine with a 95% payout percentage.

To sum up: payout percentage figures relate exclusively to the money a player wagers; they do not relate in any shape or form to the money a player deposits. When a casino posts a payout percentage of 97% they're saying that of all the money their players have collectively wagered (millions of dollars), the games have collectively paid out 97% and held a 3% profit. If the casino has made a monthly profit of $100,000, from customers' wagering totalling $50,000,000, the casino games have "paid out" 99.8%! And that's still one heck of a great payout figure! Wager your deposits enough, and it doesn't matter how "good" the payout figure is - it could be 99.99%; you'll still lose all your money.

However, bear in mind the flip side: that if you DO successfully locate a game with a payout of 99.99%, you can wager a LOT, at very low cost. You could wager $100,000 at an average cost of only $10.

Then, if on top of that you factor in the subject of comp points (see the comp points article), you can find yourself with a very attractive proposition indeed.

In fact, you can turn the payout figures to over 100% and find yourself in a casino-beating position.

Next article: "Flexible" payout percentages