Definition
Payout percentage is the average amount of money a casino game pays out in winnings relative to the total amount of money wagered. It is a statistical measure used to evaluate the fairness and profitability of a game over the long term.
In context
When a casino advertises ‘Our slots have a 97% payout,’ they are claiming that for every $1,000,000 wagered across all their machines, $970,000 is returned to the collective pool of players in the form of wins.
Why it matters
For a player, the payout percentage is the single most important metric for determining their ‘Expected Value.’ It tells you how much ‘vig’ or ‘juice’ the casino is taking. A higher payout percentage directly correlates to more ‘play-time’ for your dollar.
Related terms
In detail
Payout percentage is often confused with ‘Payback Percentage’ or ‘RTP.’ While they all point to the same basic concept—how much money the players get back—there are subtle differences in how they are used in the industry. ‘Payout’ is often the term used by auditors and regulators when they look at the ‘Actual’ results of a casino over a month or a year.
Let’s break down the ‘Actual’ vs ‘Theoretical’ payout percentage.
- Theoretical Payout: This is what the math says should happen. A Blackjack game with standard Vegas rules has a theoretical payout percentage of about 99.5% for a perfect player.
- Actual Payout: This is what really happened on the floor last month. If the players at that Blackjack table were drunk, tired, or just bad at math, they might have only received an 88% payout. The casino ‘held’ the other 12%.
As a casino veteran, I can tell you that the difference between these two numbers is where the casino makes its real money. We design games with high theoretical payouts to attract players, knowing that the actual payout will be lower because humans make mistakes.
Payout percentages also vary wildly by game type.
- Slots: Range from 80% (airport slots) to 98% (high-limit rooms).
- Video Poker: Can reach 99.9% or even over 100% with the right paytable and perfect play.
- Keno: Often the worst payout in the building, sometimes as low as 70-75%.
Why does a casino offer a 99% payout on Blackjack but only 75% on Keno? It comes down to ‘Volume’ and ‘Overhead.’ A Blackjack table requires a dealer, a supervisor, cards, and physical space. To make it worth it, the casino needs people playing fast. Keno, on the other hand, is a slow game that can be played from the bar or a restaurant. Because the ‘Volume’ of bets is lower, the casino takes a bigger ‘Percentage’ of each bet to make the game profitable.
When you are looking at payout percentages, you also have to consider ‘Variance.’ A game like Baccarat has a very stable payout percentage. You win nearly half the time, and you lose nearly half the time. The payout is steady. A ‘Progressive Jackpot’ slot machine might have a high payout percentage, but it’s ‘top-heavy.’ This means the payout percentage is inflated by a massive jackpot that only one person will ever win. For everyone else, the ‘effective’ payout percentage is actually much lower.
The takeaway for a serious player? Don’t just look at the ‘97% Payout’ sign on the wall. Ask yourself: ‘What is the payout percentage for the specific game and the specific way I am playing?’ If you are playing ‘Side Bets’ in Blackjack or ‘Proposition Bets’ in Craps, you are voluntarily moving yourself from a 99% payout game to an 80% payout game. The casino won’t stop you—in fact, they’ll probably offer you a free drink for your trouble.