Slot Machine Payback Percentages: The Devil is in the Moment

Robert Farrow and Jackson Costa ()
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Jackson Costa: UMBC

No 13-07, UMBC Economics Department Working Papers from UMBC Department of Economics

Abstract: The average payback percentage from slot machines is important to gamblers, casinos, and governments. While apparently simple to define several complications can exist, among them which measure to average and potentially misleading formulas to calculate the average. Daily slot machine data from the state of Maryland for 19 months are analyzed for the expected value of the average payback ratio per machine and per dollar gambled. On a per dollar gambled basis, the payback percentage meets legislative requirements that the gaming floor payback at least 90 percent. On a per machine basis, that requirement is not met which can imply a significant shift of money from gamblers to casino operators and the state. Other payback measures are hypothesized to also be less than the per-dollar gambled measure but data are lacking.

Keywords: slot machine; risk measures; government revenue (search for similar items in EconPapers)
Pages: 13 pages
Date: 2013-11
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Related works:
Journal Article: Slot Machine Payback Percentages: The Devil is in the MomentS (2014)
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