How Does Payback Percentage Work?

Casino Payback Percentage Explained

You hear about it a lot—payback percentage. But just what does it mean? We will try to explain this important concept as clearly as possible in this page.

Imagine a casino where no one ever wins. No matter what you play and how much you bet, you always lose. It doesn't sound like fun, does it? Not for long, everyone will leave that casino. People go to casinos to have fun gambling, and losing isn't fun.

That is why payback percentage exists. To keep their patrons happy and make sure they come back, casinos deliberately allow these players win a set amount the whole time. They cannot set how much each *individual* gambler will win, but through calculations and programming, the casinos can and do make sure that their players *as a whole* win a predetermined percentage of the money that goes around in the casino.

And what is this money? It is the total money wagered by the players themselves. All players wager; some win and others lose. Those who win earn their winnings from those who lose. Payback percentage is the amount paid out to winners on average when it is all totaled. If a video poker machine is configured to have a payback percentage of 94%, then over the course of time, it will give back to players $94 out of every $100 wagered into it.

Payback Percentage and Volatility

Now a word must be said about volatility and the short-term look of things. You cannot assume that just because a game has, say, a 90% payback percentage that you should get back $90 out of every $100 you wager in the game. It does not work that way especially if you play only for a short period. Anything can happen in a short time and the more volatile a game is, the more will individual playing sessions fail to reflect its long-term payback percentage. Volatile means there are prolonged winning and losing streaks experienced while playing a particular game.

So suppose you play a slot machine which the casino says has a 92% payback percentage. If you play $50 in one session and walk away with $40, the payback percentage for that session is 40 / 50 = 80%. If you play the $40 again and end up with a total of $49, then the payback percentage for both sessions is (40 + 49) / (50 + 40) or 89 / 90 = 98.8%. If you continue playing, the odds preset by the casino in the slot machine will start to become noticeable. Eventually you will get the 92% payback percentage.

That is how casino payback percentage works. If you want to play games with high payback percentage, the best place to look is the Internet. Play now in our favorite online casinos and get big bonuses when you sign up!