How Does Slot Machines Pay Out

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Sep 02, 2016  I'm VegasLowRoller and this is my PREDICTING THE HUGE WIN, SOMETIMES YOU JUST KNOW - Buffalo Slot Machine Mega Big Win Bonus video. MAXIMIZING SLOT PAYOUTS. Slot machines are not games of strategy. Live casinos and online casinos offer them as games of pure chance. Only rarely does skill come into play, although skill-based slots loom as a coming attraction.On most slot games, there’s nothing you can do to change the outcome. Slot machines, enjoyed by novices and experienced gamblers alike, are generally available 24 hours, seven days a week in establishments across the United States. Some gamblers think that certain days will yield a better payoff than others, but the majority of experts say that it does not matter which day of the week the machines are played. When a slot machine has a 95% payout it would mean that the machine would give 95% out of the total amount which it takes in. For every million dollars that goes inside that slot machine, it will pay out $950,000. Slot machines are not really played for profits but mainly for entertainment and fun.

  1. How Does Slot Machines Payout
  2. Online Slots That Pay Out

Introduction to Taxable Jackpots

One of the most popular slot machine questions on Google searches is: How do slot machines pay out taxable jackpots? I’ve assumed this question is about the mechanics of the payout process. A different upcoming post deals with explaining when slot machines pay out.

Slot machines are special-purpose computers, like a lot of equipment found in our lives. Specifically, standard tools are televisions, electronic watches, gas station pumps, cash registers, bank ATMs, automobiles, baby monitors, and the list goes on and on.

Each of these devices has one or more computer microprocessors, visual display, audio speaker, and some may also have a way to accept and/or dispense money either physically or virtually online.

Beyond controlling the multiple interfaces to and from the player, the computer within a slot machine also manages the odds of a player winning.

At its core, a pseudo-random number generator (PRNG) is a calculation. This PRNG is an element of the computer programming algorithm used by slot machines.

PRNGs (or more commonly RNGs) determine the outcome of a player’s bet based on the pre-determined odds of winning as set by the casino operator within the limited options provided by the slot machine manufacturer.

As previously mentioned elsewhere, winning a jackpot involves using the PRNG twice:

  1. To determine if a jackpot is won
  2. To determine how much was won

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The Slot Machine Gambling Process

Once a player selects a specific slot machine, that machine operates to accept or reject the inserted cash, ticket voucher, and reward card.

Next, it accepts the player’s selection for denomination amount and amount of credits to be bet, although it will merely reject one or both settings if insufficient funds are available to make such a bet.

When the bet is placed, the machine immediately selects the latest random number generated by its RNG to determine the outcome of the bet and well as updating the players club card with the points earned for placing the bet.

At the end of this process, the machine turns the reels to show the outcome of the bet. See below for this player-machine sequence of events.

During slot machine gambling, a sequence of actions and reactions take place between the player and machine. The player:

  • selects a specific machine, inserts money in the form of cash or ticket voucher
  • chooses from the denominations available
  • chooses the number of credits to bet
  • places a bet
  • observes the results of the bet including any bonus round
  • receives winnings from the bet (if any)
  • then, either:
    • leaves the machine empty handed
    • cashes out any remaining funds and leaves with a ticket voucher
    • continues playing the machine.

The player may choose to insert a player card at any time before or during play, then later remove it before leaving the machine.

Jackpot!

Between determining the outcome of the bet and turning the reels, the machine executes programming code that sets the reels.

The reels turn in a way the machine’s game designers consider most entertaining to the player – such as stopping on reel symbols for non-wins which are next to the symbols for sizable jackpots.

As mentioned, the bet’s outcome is determined when the bet is placed, not when the reels stop moving, despite the entertainment value derived by the player when observing the “action” of the slot machine.

In the event of a win, the machine executes further programming to activate sequences of lights and sounds while updating the information display for the player, which is referred to as a roll-up.

Now What? – The Jackpot Pay Out Process

If a jackpot less than the taxable limit is won, slot players can simply proceed with continuing to play or cash out from that slot machine. The current taxable jackpot limit is $1,200 in the United States.

Meaning, if you have a win of $1,200.00 or more at a slot machine, there is an immediate tax bill resulting in an IRS Form W-2G. If you have a win of $1,199.99 or less, there is no immediate tax bill.

Jackpots that require immediate payment of taxes results in the slot machine locking up.

Many, many slot players have been surprised by their slot machine locking up when a taxable jackpot is won. It can only be unlocked by a casino employee, a slot attendant.

Whether a casino is old or new, a slot attendant will arrive shortly to administer a hand payout. During a hand payout, a slot attendant

  • collects personal identification sufficient to both complete a tax form as well as any other state-required documentation
  • performs the hand payout (if they have adequate cash on hand)
  • unlocks the machine to allow the player to continue.

If the attendant is not carrying enough cash with them, or if the player wishes to have a cashier’s check instead of a cash payout, the slot attendant leaves the player with a receipt and returns a short while later with the check or cash.

How Does Slot Machines Payout

If the attendant leaves, they typically unlock the slot machine beforehand to allow the player to continue betting while waiting for the slot attendant to return.

Summary of Taxable Jackpots

The most important thing to remember about winning a jackpot is to make sure you’ve brought your government-issued I.D. If you don’t have it, then you cannot receive a taxable jackpot.

And, no, your friend sitting next to you cannot claim the jackpot for you – the eye in the sky knows it’s your winnings and not someone else.

How Does Slot Machines Pay Out

The second thing to be aware of is what is or is not a taxable jackpot, a single win of $1,200 or higher. Many people have never won a taxable jackpot, so it can be challenging to get useful information on this unless you’ve done it more than a few times. But I have.

If the machine locks up, it’s either had an error or you’ve won a taxable jackpot. Being out of paper is a machine error, for example. Either way, a slot attendant will show up shortly to help. For goodness sake, don’t walk away until you know which!

As a final note, as of this writing, a decade ago, casinos moved away from using coins. Nowadays, they use cash, checks, and vouchers redeemable at cash machines and cages.

Related Articles from Professor Slots

Other Articles from Professor Slots

  • Previous: Why Do Slot Machines Use Fruit Reel Symbols?
  • Next: Who Builds Slot Machines Throughout the World?

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Online Slots That Pay Out

There are dozens of different payout systems used in slot machines. In one of the simplest designs, a jackpot is detected by measuring the depth of notches in the discs that drive the reels. For simplicity's sake, we'll look at this sort of payout system in a bare-bones slot machine. The machine only accepts one kind of coin, and there is only one winning combination of images.

When you put a coin in this machine, it falls into a transparent case. The bottom of the case is a movable shutter that is connected to a metal linkage, as you can see in the diagram. Normally, the linkage holds the shutter closed. But when the machine hits the jackpot, the third stopper shifts the linkage up, opening the shutter so the coins fall out of the machine.

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Each of the three discs has notches for each stop position of the reel. The notch for the jackpot stop is deeper than the other stops. Consequently, when the first reel lands on the jackpot stop, the first stopper moves farther to the left than it would for any other stopper. If the second reel stops on the jackpot as well, the second stopper also moves farther left. Same goes for the third reel and stopper.

But if only the second reel stops on the jackpot, the second stopper will not move all the way into the notch. The first stopper has a catch that keeps the second stopper from moving past it. The second stopper, in turn, has a catch that holds the third stopper back. For the third stopper to lock all the way into the jackpot notch, then, the first and second reels would have to have landed on the jackpot image. When this happens, the shutter opens to dump all of the coins that have been played since the last jackpot.

Typically, slot machines will have more elaborate versions of this design in order to pay out partially on certain combinations of images and pay out completely on the jackpot combination.

In another popular system used in some electrical machines, the discs have a series of metal contacts attached to them. When the reels stop, one of the contacts engages a stationary contact wired to a circuit board. In this way, every stop on each reel will close a different switch in the electrical system. Certain combinations of closed switches (jackpot winners) will configure the machine's electrical circuit to operate the payout mechanism.

A more advanced system uses photoelectric cells (also known as photo diodes), devices that generate a current when exposed to light, to detect the position. In this system, a series of holes are drilled through the rotating discs, all around their outer edges. The photo diode is positioned on one side of the disc, and a light source is positioned on the other side. As the disc turns, the light shines through the holes onto the photo diode. The pattern of holes in the disc causes the photo diode to generate a similar pattern of pulses of electricity. Based on this pattern, an electronic circuit can determine the position of the reel.

Newer slot machines use computers instead of gears. We'll take a look at those next.