How to Predict the Hourly Cost of a Slot Machine

Slot Machines & Negative Expectations: Calculating Your Hourly Expectancy

Slot Machines & Negative Expectations: Calculating Your Hourly Expectancy

You’ve planned a night out at the casino. You’re all dressed up. Your ride is waiting. You suddenly realize you have no idea how much money you should bring! If you’re new to casino gambling, you may have come across this problem before.

Many people perceive casino games to be very expensive. Or, they decide to bring more money than necessary because there’s always the chance they’ll lose everything long before the night is over. If you’re not sure how much to bring, and don’t want to overextend your budget, here’s a few tips on calculating the hourly cost of a slot machine.

Slot Machines & Negative Expectations

First, you need to understand how slot machines work. These games, like almost every game in a casino, come with a negative expectation. This simply means that, based on the pre-programmed payout rules, you can expect to lose money when playing them. It doesn’t mean you’re guaranteed to lose, but the odds are definitely not in your favor.

The great thing about slot machines is that the payout percentages are not determined by how you play the game. You can shift the tides in blackjack or video poker based on the decisions you make. In slot machines, there exists something called an RTP, or return to player. This is the percentage-based amount the machine is going to return, based on what it takes in. A 96% RTP, for instance, will pay out 96% of all money wagered to its players. The other 4% goes to the casino, known as the house edge. It’s a long-term thing, subject to variance (see Flaws below), but in terms of calculating hourly slot machine cost, it’s a necessary figure.

You’ll need two other pieces of information to complete the equation; the cost per spin, and the average number of spins per hour. Now, to put them all together…

Calculating Your Hourly Expectancy

You can do this a few ways, but the easiest is to start by multiplying the cost per spin by the spins per hour.

Let’s say you’re playing a game that costs $0.40 per spin. That’s a fairly common rate at both live and online casinos.

The speed at which you spin plays an enormous role in the expected cost of play. If you just keep tapping the spin button every time the reels stop, you can expect to see about 10 spins per minute, which equates to (10*60) 600 spins per hour. However, if you take your time, observing the results of each spin before continuing, not only will you enjoy the experience far more, you’ll only spin the reels about 6 times per minute, or (6*60) 360 spins per hour.

For obvious reasons, I would strongly suggest taking your time. But that’s your choice, of course.

By multiplying your cost per spin ($0.40) by your spins per hour (360), we find that you’ll be wagering about (0.40*360) $144 per hour.

Don’t worry, that doesn’t mean you’ll be losing $144 per hour. Some of those spins will produce wins. So if we multiply the total wagers per hour by a house edge of 4% (that being the opposite of a 96% RTP), we can estimate how much money we should expect to win back in that hour. In this case, ($144*0.04) $5.76 per hour.

Gambling on slot machines doesn’t sound nearly so expensive when you look at it in this manner. Losing just under $6 in an hour, we could spend a vast amount of time at the casino on a $150 bankroll.

To sum it up, the formula for estimating slot machine losses per hour is:

Cost-per-spin x spins-per-hour x house-edge = loss-per-hour

The Flaw In This Plan

The only problem with this plan is a little thing we call variance. A machine is not guaranteed to pay out its RTP with every wager, or within every hour. It could produce a win. It could even produce a very large win! Or, it could produce far fewer wins than the RTP suggests, causing players to lose money more rapidly than the estimations above.

The variance of a machine can be high, medium, or low. The higher the variance, the more swings in win/loss you can expect. The lower the variance, the closer to the above estimation you’re likely to get. Most live casinos do not advertise the variance of their games. Many won’t even list the RTP. Online slot machines, however, often do. If you can get this information, use it to your advantage when sizing your bankroll.

My suggestion would be to anticipate losses of 4x more on a high variance game, 3x more on a medium variance game, and 2x more on a low variance game. This way, you’re safeguarding your bankroll against a streak of bad luck that could leave you high and dry before the night is over.

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