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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? A very common and incorrect assumption is that if, say, you deposit $200 at a casino with a 97% payout percentage, you will on average receive back $194, that being 97% of 200. Unfortunately, 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, and that still playing a machine with a fully 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, 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%, which is still 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: if you successfully locate a game with a payout of 99.99%, you can wager a lot at relatively 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 discussed in the comp points article, you can find yourself with a very attractive proposition indeed.

“Flexible” payouts

Are game payouts set by the casino, or can they be affected by other factors? There are two basic considerations here: The nature of the games and the nature of the software.

Out of the many casino games available, very few offer the possibility of player input affecting the result because most games do not allow the player to choose how he plays his cards. Out of the whole spectrum of games available there are basically two that extend to the player this option: the various forms of blackjack and video poker. All the other games are played automatically following set rules: in roulette and craps the player simply places his stakes on the board; in baccarat he bets on either player or banker; slot machines, he spins the reels. However, blackjack and video poker afford the player a very wide range of decision-making options that affect his overall return to a very great extent. Play the cards perfectly and you will get the best payout possible from these games - and that “best” is often very good indeed.

The second factor to take into consideration when considering an online casino game payout is the software itself, and it's very, very important to do your research thoroughly to ascertain whether the game is random or artificial in terms of the play of the cards, because there are some apparently excellent games that are set to return a very low amount to the player.

To give a specific example in the real world of land-based casinos: in the United Kingdom, all machine games - both slots and video poker - operate on the “slot” principle: the outcome of the spins is not natural, because the reels in effect do not spin freely but are “weighted” to guarantee a particular overall payout, somewhere between 70 and 80 percent - for more detailed information on the working of slots, have a read of the slots page. A few years ago - and unaware of this “slot” nature of UK video poker - I came across a video poker machine in a slot arcade with what looked like a very generous pay table that would pay back well over 100% in the long run. I examined the game closely, and ironically enough only ended up not playing it because the manager asked me to leave the building - I think he thought I was up to no good. If I had played that machine I would have lost heavily to a game with an 80% payout, unaware as I was that it wasn't a “real” game but a weighted slot machine.

Online, the same problems exist. For example: a well known casino runs a video poker game with a very large theoretical payout. However, read the small print and you'll discover that what looks everything like a normal video poker game is actually a slot machine with an average payout of about 95%. If it were a genuinely random game the payout would be around 112%. Again, careful research is needed to ascertain whether or not the game is claimed to be random or artificial in terms of the spinning of the reels or the dealing of the cards.

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