Machine ‘payback’ highly overrated

Jun 19, 2005 10:06 PM

I’ve been watching with interest the debate between our video poker columnist Rob Singer, and radio show host Fezzik and his sidekick, Hizzle (together, they must be "Fizzle").

I won’t rehash their arguments, but the Fizzle side seems to condemn Singer for advocating playing on machines that don’t return the highest payback on the floor.

Singer contends that payback percentage isn’t as important as other factors, such as the actual odds to hit the desired hands.

Singer is absolutely right. Long-term payback percentage — manufacturers and regulators will both attest to this fact — is a theoretical number based on millions of games. The actual payoff that any player receives can vary dramatically.

I’ve seen this first-hand with video keno machines. Many of my favorite machines only return 92 percent to 94 percent at the most.

Under the Fizzle approach, you don’t both feeding a Benjamin into one of these machines. But we all know better.

There’s another factor that comes into play when evaluating machines. In my book, Cluster Keno (available at the Gamblers Book Shop in Las Vegas), and in previous articles, I’ve never endeavored to explain how the keno program actually works. It was only important to chronicle what I did and what, if any, result I obtained (hopefully, hitting a jackpot was one of them!).

But a recent note from Denny in Henderson prompted me to take the time to devote some energy to the riddle of how the video keno program works. Denny wrote:

"You seem to theorize that keno machines are more like slot machines and have a random number generator ”¦ (and) I believe that when the RNG has selected a particular winning payoff that it will post the winning numbers to create that payoff and find those number of numbers as they can be anywhere and not clustered."

In a sense, I do believe there’s a possibility that the keno machine works the way Denny describes. This would be similar to the stepper slots, which have magnetically operated reels that are "directed" to stop in the precise order that is determined by some sort of computer chip or program.

In other words, the computer chip or program randomly determines an outcome (two cherries, one seven, all blanks, two bars, etc.) and then "sets" the reels to reflect that outcome.

Anyone who has played keno for a length of time would probably agree that such a scenario could also explain how video keno works. Specifically, players often note that they’ve played the same group or cluster of numbers for hours, then after moving off the numbers the machine fills in all of them!

This would seem to defy normal probabilities. But if the keno screen were just an output device for a computer program similar to a slot program, it would make perfect sense.

One of the most technical explanations of how a video keno game works was delivered to me from a reader who claims to have received the information from a former technician of a major slot manufacturer.

Now, I don’t endorse this explanation or suggest that it is a true reflection of how keno machines work. But I thought it might prove interesting, if not worthwhile, to our readers. Here is the explanation, in the reader’s own words:

These machines are designed and programmed to do one thing. Pay the house a certain pre-determined percentage of every dollar gambled, and I have been assured that if the machine has not registered enough intake of money to enable it to pay out a major jackpot, it will not hit no matter how many times or how often you re-set your numbers. These machines have a three phase program written into them. Phase one ”¦ there isn’t enough money to pay a jackpot. This is when the machine will somehow manage to miss your numbers most of the time, hitting small pays just often enough to keep the "it’s due" type of player feeding it.

Phase two is the real kicker. When the machine has enough money to pay out a jackpot without hurting the house "hold" it actually switches over to a second program that is truly run via a random number generator. At this point the machine is actually running an honest RNG program, and your numbers may or may not hit depending on just how plain lucky you are. This is when your true odds of hitting a jackpot based on the number of spots picked come into play. The more numbers picked, the longer the odds. (One note here: Almost all these machines except those connected to a progressive jackpot, pay the same maximum jackpot for an eight, nine or ten spot. So why play a 10 spot when an 8 spot pays the same and your odds of hitting one are exponentially better?)

The third phase programmed into the game is the one you hope you’re lucky enough to have running when you put your money in and pick your numbers. Everyone from the Gaming Control Board to the manufacturer will deny this even under the pain of death, but just remember it is a computer and it can be programmed to do anything you want it to do. And it is the only way that a machine manufacturer can guarantee the house that they will make their percentage in profit. When these machines switch over to the third tier of the program, it reads that the machine is holding far in excess of what it is programmed to earn for the house, usually from 15 percent to 18 percent. It’s just way too close to the maximum 25 percent hold mandated by state gaming regulations. Now it doesn’t matter what numbers you pick, they are going to hit!

Interesting stuff, wouldn’t you say? Beyond that, I don’t have a clue whether this is an accurate explanation of a video keno program.

At this point, it doesn’t matter. What’s important is playing the game a certain way, which hopefully results in some nice payoffs. We’ll look more closely at playing strategy next week.