November 26, 2021
LOS ANGELES, July 11 (Reuters) – Slot machine enthusiasts take heart: that feeling that it’s getting harder and harder to make a buck in Las Vegas is no illusion.
Over the last few years, casinos on the Las Vegas Strip have quietly lowered the overall payout rates for their slot machines, effectively paying themselves millions of dollars more in profits at the expense of the slot player.
According to data released on Wednesday, Strip casinos held onto 6.67 percent of all money they took in for slots in May, meaning they kept $6.67 for every $100 wagered. That figure was up sharply from May 2001, when they kept $6.30 for every $100 wagered, according to the Nevada Gaming Control Board.
Unlike table games such as craps and black jack, where the payout rate varies from month to month based on the luck of the dice or cards, UFA slot payout rates are programmed into the machines by casinos with little left to chance.
Thus, a large casino can effectively give itself millions of dollars in added profits by programming its payout rate at a fraction of a percentage point lower.
In more concrete terms, Las Vegas Strip casinos would have kept $2.48 billion in profits of the $39.3 billion wagered on their slot machines last year using the 6.3 percent rate. But under the newer 6.67 percent rate, their winnings would have grown by $140 million to $2.62 billion.
UBS Warburg analysts Robin Farley said Las Vegas Strip casinos are tightening up their slots to offset cheap room prices and food prices, which are often treated as loss leaders to get people gambling.
“The casinos are using their room rates to get people in the doors, to get visitors walking through …