Higher Slots Payout Percentages aren't always Better

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If there's one golden rule of playing online slots, it's to look for games with the highest payout percentage. After all, a payout percentage determines how much money you can expect to earn back from slots over the long-term. So a game with 97% payback is definitely preferable to one that features 92%.

But while higher payout percentages have been ingrained into many slots players' minds, higher payback isn't always better. And this might sound like a strange thought, so keep reading to find out why bigger payout percentages aren't right for some players.

Keeping up with the Industry

As we all know, online casinos want to make a profit. And in order to accomplish this goal, they need to have a long-term edge on games while still remaining competitive with the industry in terms of payback. For example, a casino could make a lot of money off players by offering 75% payback. However, once word gets out about the measly 75%, players are going to flock to other casinos.

So most gaming establishments shoot for a standard profit with slots games based on coin denominations. This being the case, payback usually increases as players bet higher coin denominations. Here's a rough sample of how this might play out at an online casino:

Nickel Slots = 92% payback
Quarter Slots = 94% payback
Dollar Slots = 95% payback
$5 Slots = 98% payback

Doing the Math

To illustrate how this all plays out on the reels, let's say that you make 100 wagers with each of the aforementioned games. After doing this, your expected losses would go as follows:

Nickel Slots = $0.40 expected losses [$0.05 x 100 bets - ($5 total bet x 0.92)]
Quarter Slots = $1.50 losses
Dollar Slots =$5 losses
$5 Slots = $10 losses

We should reiterate that this is just a rough figure used to represent a generic casino. However, it adequately shows how - in many cases - players' expected losses increase with higher payback games due to bigger spins costs. So while 98% payback might look pretty on paper, the $5 coin denomination is going to lead to more long-term losses.

Now we're not saying that you should avoid higher denomination slots games - after all, they normally offer huge jackpots. But if your bankroll is pretty small and you're just viewing slots as entertainment, you might be better off with lower payback/lower coin denomination games.

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