I need a statistics person

[mongoose]

OK, I have modeled this on a computer, but I want to check my work. Here goes.

A friend of mine argues that the following method is a way to get an edge playing slot machines:
-- Play the machine you are on until it wins.
-- Hang out and wait until some leaves a machine in disgust from a long losing streak.
-- Sit at that machine and start playing.
-- Repeat

His argument is that over time you will catch the tail end of the losing streaks, and be closer to a win.

I completely disagree. I argue that no matter where you come in, you cannot get away from the fact that each time you play that machine, there is a constant probablility of winning, and therefore, for each dollar you put into that machine, you have an expected value of less than that dollar. No matter how crafty you try to get, there is no escaping those set, constant probablilities for each dollar you play.

Am I right?

--'Goose

 

[The Kraken]

If slot machines operated on the principle of random chance, then, yes, the probability of your winning would be exactly the same each time you played the machine.

HOWEVER !!!! Slot machines DO NOT operate on the laws of probability and random chance. I'm not knowledgeable about how they operate internally, but slot machines can be adjusted to pay out at a particular rate.

the K

 

[jonnythan]

You are completely right to disagree. Unless the slots are programmed in such a way as to intentionally have losing streaks and winning streaks, your chances of winning x amount on a given pull of the handle is exactly the same every single time, no matter what kind of "streak" is going on.

 

[Kim]

Actually the Kraken is correct. Slot machines are programmed to pay out a percentage of what is put in. I know this for a fact as I have friends in Holland in the business of supplying them to bars etc. The percentage that they are set to is determined by the owner or renter of the machines. I believe in Las Vegas they are typically set to pay out 97% - the 3% that they actually take is obviously a huge amount of money. Of course it still means that the majority of single rolls are going to lose because wins - especially high wins and jackpots - will pay out in a couple of times the accrued money from many rolls. I've seen people play the machines like you describe - and it often does work out. Sometimes though it doesn't, as to really benifit you have to keep playing once you start until you win.....sometimes that's just too long and if you did it all yourself you are still going to eventually lose what the machine is programmed to keep.

 

[DA Aquamaster]

We have gambling locally and slots are a common sight. So is the sight of little old ladies off tour buses laying down their money on exactly the same theory that a losing machine will pay off eventually. This usually means that after they have dumped most of their social security check or vacation spending money into one machine, they keep dumping the rest of it in "knowing" that the big payout is just one more pull away.

Any slot technician will agree with you that slots can be adjusted to any specific payback amount. This payout has to comply with a legally specified minimum, but some casinos increase the payout slightly to try to lure customers from other casinos. In most cases that is a sound business strategy as most people still leave the casino with virtually no cash no matter how much they "won", and even those who leave after a fairly large jackpot, come back looking for more and leave the money the next time.

The chances of a payout on any given slot machine is the same regardless of whether the machine just paid out or not. The adjustment to the machine increases or decreases the statistical probability of winning on a single pull, but the slot does not really keep a running total of how much it has paid out or how much money has been dumped in it. I have seen the same slot pay out two pretty hefty jackpots over a relatively short period of time (less than 5 minutes).

The only thing you can bank on with a slot machine is that the longer you play, the more you are going to lose. They make money for the house by encouraging people to keep playing by throwing them small to largish jackpots often enough to make them ignore the amount of money they are actually losing at 1 to 3 coins at a time. They also encourage larger bets by showing how a large bet has a larger payout, which again obscures the fact that over time for x amount of money, the payout is exactly the same whether you bet it one coin at a time or three coins at a time.

My advice if you are going to play the slots regularly is to record how much you play versus how much you win. Over time, even with the big jackpots, you will realize you are losing big bucks.