Hey, slots enthusiast! Winning at slot machines starts with knowing who controls their odds. To help you win, I’ll explain who does what and why. That’s coming up! Hi, my name is Jon Friedl. Welcome to Professor Slots, a channel that’s all about learning casino slots so you can win your way to success. If you’ve ever walked into a casino, looked around, and wondered what’s going on, I can help. Let’s review, who controls slot machine odds of winning? To answer this question, I’ll need to delve into a bit of recent history to explain how odds are set in older-style standalone slot machines using a random number generator (RNG). This approach is how many people incorrectly believe the odds are currently set on ALL slot machines. However, starting around 2008, a lot changed with setting slot machine odds These changes were due to the emergence of new gaming technologies, not only in slot machines but also with the development of casino operating software. Both provide casinos with an increased operating efficiency and therefore lower operating costs. With so many more people visiting casinos in the last decade, and with casino profit margins getting smaller and smaller every year, casino operators find they cannot afford to ignore this savings opportunities of these new technologies. The second driver for this change is due to ongoing developments in statutory regulations for gaming jurisdictions. In the U.S., these gaming jurisdictions are the states, territories, or the federal district that legally allow gaming. In essence, casino operators have to follow the gaming regulations of the jurisdiction wherein they are located. These gaming jurisdictions often include laws which place an upper and lower limit on the payout return for slot machines. To not lose their gaming license, or to otherwise get in trouble with gaming control authorities, casino operators must comply with these legal gaming requirements. Note that American Indian tribal casinos must comply with their own set of gaming requirements, which are usually not based on state law. Rather, these rules were defined by negotiation between a federally-recognized tribe and the state within which they are located by carefully crafting a state tribal compact ultimately approved by the U.S. Department of the Interior. So, within this overall context, who controls slot machine odds? At a high level, gaming regulators determine the legal limits, if any, for theoretical payouts on slot machines. These gaming regulations implemented via state law or negotiated compacts are usually not changed for a decade, if that often. Casinos operators are, often but not always, required to provide weekly or monthly reports on actual returns to show their gaming authority they are compliant. Sometimes, depending on each gaming jurisdiction, these statistical reports are provided to the public through the state gaming commission. Going further, these regular reports break down actual return statistics by casino, table games, slot machines, gaming machines, by the denomination of slot machines within a specific casino, or even if the machine has a progressive jackpot. How many of these statistics are given to the state and then to the public is very specific to the gaming jurisdiction where the casino is located. Given all the variability within a U.S. gaming jurisdiction, I’ve created an online series of posts for my audience of slots enthusiasts. It’s meant to help them navigate this dynamic environment of state-specific gaming regulations. For more information on your specific state, territory, or federal district of interest, see my State-By-State Online Resource for slots players at ProfessorSlots.com/online-resource. So, at a high level, slot machines are controlled by gaming regulators by the placement of legal requirements for payout percentages. Sometimes, however, these state-specific gaming regulations do not set theoretical limits on payout returns. When this happens, somewhat obviously, casino operators do not have a legal requirement for setting payout returns. However, to remain open and not closed due to lack of customers, they must still be careful not set their payout returns too low. It’s worth noting that most gaming regulations set a far lower limit on theoretical payout returns than casino operators prefer. Usually, casino operators deliberately stay well above it. To do so is just good business. The random number generator (RNG) for slot machines was invented by Bally Technologies in 1984. About a decade later, most slot machines had this RNG, which allowed easily adjustable odds of winning. Beforehand, the odds of winning were set in an entirely mechanical manner This worked well for decades, until the lack of technical development of slot machines began to cause difficulties for casinos. Basically, as maximum credits bet and number of pay lines increased, the physical mechanisms for determining odds began to reach certain physical limits. Slots enthusiasts loved having a choice of how many credits to bet, as well as playing a slot machine with more than one pay line. Increased credits and paylines also led to much higher jackpots. All these developments led to odds of winning being needed for many more possible outcomes, which mechanical devices for determining the odds of winning began to not be able to handle. In fact, these mechanical devices began to fall behind and became less and less random in nature. The invention of the RNG solved for slot machine manufacturers this limitation of mechanical devices by determining randomness in slot machines. But it created another problem: With adjustable odds of winning via electronic RNGs, casinos would need a large workforce to do that adjusting. And so, that is what casinos did. They hired and trained a workforce of slot mechanics to adjust the odds of winning on their new slot machines to meet their desired financial performance metrics. However, that workforce size would need to increase depending on how often those odds of winning were adjusted. For older style slot machines, this is at least seven days and maybe as much as two weeks. Most recently, since 2012 or so, relatively newer casinos have been able to reduce this costly workforce thanks to new casino operating systems. These systems not only help casinos manage large promotional events with less overall issues, but also allow them to remotely adjust the odds of winning on slot machines connected to the casino’s central computer system. This connection to the casino’s central computer system is limited to a wired connection due to potential security concerns as well as WIFI bandwidth limits. As a result, using a central computer in this manner is only possible if all the slot machines are physically “wired up.” Doing so requires sufficient building infrastructure, such as clearance beneath floors and behind walls, to allow for these many, many cable connections. This is only possible in new casinos built to include this space or older casinos being heavily renovated. That is to say, renovated to have far more than simply new carpeting and wallpaper. With wired connections from slot machines to a central computer, the reduced cost of a smaller workforce of slot mechanics, much faster adjustment of casino performance metrics to daily or even hourly updates, and more satisfied customers due to efficiently run events, the question remains: Who controls slot machine odds? To get to the answer to this question, we’ll next have to discuss how the legal limits of theoretical payout returns are set on actual slots machines. Why? Because we want to categorize slot machines by how their odds are set. And, how those odds are physically set tells us who really controls them. Slot machines can be divided up by methods by which their odds of winning are set. These slot machine types include Standalone, Casino-Specific Progressives, Multi-Casino Progressives, State-Wide Progressives, Remotely Controlled Onsite by Casino, and Remotely Controlled Offsite by Gaming Regulators. Standalone slot machines are those most often found in older casinos. These slot machines include within their cabinets the ability to set and provide odds of winning with a random number generator. With them, a workforce of slot mechanics must adjust the odds of winning periodically as directed by the casino operator. In general, there is a limited number of settings available for these older slot machines. YouTube videos are available from individuals who have personally purchased an older-style, standalone slot machine showing exactly how these odds are set. For those videos I have viewed, there are six possible settings which could be programmed in after opening the slot machine door. These settings were based on codes from a booklet provided by the slot machine manufacturer. Keep in mind that videos such as these are the general source of knowledge most people have about the internal workings of slot machines. Employees of slot machine manufacturers and casinos with access to these payout settings simply aren’t sharing this information due to non-disclosure agreements and other legal restrictions. Besides which, accessing the control for changing the odds of a slot machine is quite problematic. The slot machine is alarmed, so any tampering without official access such as employee card key, entry code, and physical key are required to even open a slot machine door. Not to mention, the casino surveillance system sees all. Discussing the three types of Progressive Slot Machines mentioned will be the dedicated topic for another time. Now, I’ll focus on how the ownership of Progressive machines matters with regards to how the odds of winning are set. Briefly, the amount of the Progressive jackpot is primarily based on how many slot machines are connected in its network. For instance, there can be a carousel or row of progressive slot machines in a certain area of a casino, it can be a larger number of slot machines located throughout a casino, or it can be a large group of Progressive slot machines located at multiple casinos. These large group could be of two types: multiple properties of the same casino operator, or multiple casino operators, within a single gaming jurisdiction such as a state. Already discussed are slot machines remotely controlled onsite at a casino with a central computer operating system. Only new or heavily renovated casinos have the facility infrastructure to handle the sheer number of cables necessary. If they are controlled onsite, these slot machines have their odds of winning adjusted daily or hourly by remote access. How often these adjustments are made is, rather unfortunately at this time, a matter of debate. I’m trying to track down state legal requirements of which I’d heard rumors. The rumor I heard was that a slot machine must be idle for at least 15 minutes without a player’s card inserted before the casino is allowed to remotely adjust its odds of winning. Further, the rumor stated that this practice is typical and originally based on Nevada gaming regulations. However, this rumor doesn’t pass the so-called smell test. At this time, I’ve reviewed state gaming regulations for all U.S. states, territories, or the federal district twice or more. I’ve yet to find any substantiation for this rumor. Alternatively, it may well be an accepted business practice built-in to the advanced casino operating systems. Why do I feel strongly that slots players are protected from having heir odds of winnings reduced while playing? It’s simple – the state control board controls the odds of winning on slot machines, and everything I’ve seen, read, and studied tells me they work for you. I just can’t imagine state gaming commissions would allow something this untoward, this nefarious even, to occur. They have careful casino operating system approval processes in place to prevent it, they watch casino operations like hawks (often from within the casino), and any casino that decides not to be fully compliant is in for a world of hurt if (when!) they’re caught. Finally, there are slot machines having odds controlled off-site by state gaming regulators. These are most or all video lottery terminals (VLT) style slot machines. Video lottery terminals are, as their name explicitly states, lottery machines. They are controlled by the state lottery, which is set up to remotely handle many, many such terminals at any given moment. Who controls slot machine odds at a casino you are considering whether to visit? Who controls slot machine odds on the slot machine you’re sitting at? My video Assessing Casinos for Success is all about deciding which local casino you want to spend your time at and that’s an important decision for determining your baseline success at slots. You’ll likely want to know who controls slot machine odds when you’re choosing between, for instance, an older, pre-2012 casino with standalone slot machines or a racino with many new video slot machines. The top-level choice is really about understanding your gambling goals, as covered in my upcoming video Identifying Gambling Goals. But, whether your gambling goal is entertainment, earning maximum comps, or take-home money, having better odds of winning on a slot machine will accomplish that goal. So, ignoring other important considerations such as drive time, the spread at the buffet, players club, and more, the type of slot machine is definitely a serious consideration. Casinos with standalone slot machines where the actual machine in front of you has its own dedicated random number generator is relatively easily determined. Ask someone, how old is the casino? If you don’t want to ask someone or look it up online, just look at the slot machine in front of you. Specifically, look at the player card interface area. What does its display look like? Is it a touchscreen display? Or is it an LED display like those seen outside of a bank showing the time and temperature for a passerby to see? If it’s a touchscreen, the slot machine is most likely remotely controlled. If it’s an LED, it most likely is a standalone slot machine. Next up for discussion are non-video slot machines with touchscreens at the players card interface. These are slot machines centrally controlled by a computer onsite at the casino. Again, you can confirm this by learning the date of the casino’s original opening or when it was last heavily renovated. Keep in mind that very few casinos have both, assuming they have expanded their original structure not by renovating it but by building a new casino facility next to it. This is the case with Foxwoods Resort, which is itself an older-style casino. However, they recently build Fox Tower right next to it, which is a newer-style casino. Finally, there are video slot machines. It can be difficult, if not impossible, to tell the difference between a video slot machine and a video lottery terminal. The first type has its odds controlled onsite by the casino and the second offsite by the state lottery. The only sure way to tell the difference between these two slot machine types is to learn what the state gaming commission says they are at that casino. For instance, in Ohio, there are currently four commercial casino resorts and seven pari-mutual racinos. The four casinos have traditional reel and video slot machines all controlled by a central computer located onsite. However, Ohio’s seven racinos have a mix of traditional reel and video lottery terminals slot machines. The traditional reel slot machines are controlled onsite with a central computer while all the video lottery terminals, which externally look exactly like video slot machines, are controlled offsite by the state lottery’s central computer systems. With this improved understanding of how casinos work, let’s consider two facts. First, that there are types of slot machines, specifically standalone or remotely controlled by casino operator or state. Second, that there are the several ways slot machines can have their odds of winning set on an ongoing basis, depending on their specific type. So yes, it does matter who controls slot machine odds. Why? Because this is where we find patterns of winning. When slot machines are set up to be as random as possible, and that assigned level of randomness is unchanged over days and weeks, then long-term statistical principles apply. Meaning, on average over the long haul, people will always lose money playing slots. Put another way, profits are only possible in the short term. This specifically applies to slot machines controlled by the state, such as VLTs. However, when odds are changed hourly or set over 100% for promotional purposes, then there are better times to play a slot machine – and all slots enthusiasts need do is figure out when that better time is to win more and, potentially, make some level of profit. That’s what I did: I made a profit at slots by looking for and finding winning patterns, when I won 90 taxable jackpots in nine months at several casinos. Only casino operators change their odds hourly or deliberately adjust them for promotional purposes. The state has no need or desire to do so, getting their money no matter what, while the casino is a business. with stockholders and a board of directors, obligated to try to succeed financially. The casino puts in the time and energy to hit their financial performance metrics. The casinos hire the best general manager who, themselves, hire the best possible team to run the casino. Put another way, the casino has a business need to adjust the odds of winning on their slot machines to eke out a living while the state only needs to be patient. Businesses are not patient – they try things in their ongoing quest for success. And, really, that struggle is what drove the technology changes behind adjusting odds of slot machines. Casinos are always trying new things. And, when they have control over setting the odds of winning on slot machines, they adjust them as a tool to try to succeed. Before 2012, this amounted to increasing the odds of winning to be over 100% on a single slot machine near a busy area in their casino, as a hidden promotion with its own limited budget. With the new casino operating technologies, casinos have gotten a finer control over setting these odds. This has allowed them to try new things, like adjusting slot machine odds more often than ever before. In financial terms, they’re trying to tune their financial performance metrics on a daily or even hourly basis, something that was previously technically impossible. I’ve never worked for a casino, so a slot machine manufacturer’s sales team has never tried to sell me a new casino operating system. But, it’s obvious that this “tuning” is part of the pitch made to casino operators. Without having seen it, how can I believe this? Simple. I’ve won a lot at slots through pattern recognition. What’s happened is that casinos have obviously bought into the idea of finely tuning their financial performance metrics. It matters not at all how it came about. In the case of slot machines, which is the only game a casino offers that I’m interested in, they broke the long-term constant randomness of the odds of winning on a slot machine. Therefore, as all statisticians know, patterns emerge. So, again, yes it does matter who controls slot machine odds, because those controlled by the casino have their randomness broken. It matters because slots enthusiasts can look for emerging patterns on these casino-controlled machines, then use them to win more. In the future, I’ll talk more about winning patterns I’ve found using this basic understanding. In the meantime, I hope I’ve made it clear how and why they exist. Comment below with what kind of slot machine your casino offers. Be sure to share the name of the casino. I’ll see you next time. Stick around for assessing casinos for success and more. Have fun, be safe, and make good choices! Bye!