Although such terms as returns and payback are many times used interchangeably in this article specific meanings will be assigned so as to avoid confusion.

The percentage of money paid out vs. the amount of money paid in defines the return of a slot machine. Therefore, if you put $100 into a machine and receive $92 back, your return comes to 92%. Many online casinos will routinely hire accounting firms in order to verify that their returns are in order so as to prove to their customers that they're operation is honest. The returns on the various games offered by the casino is reported by the firms. The return for example, was 96.7%, if all of the casino’s players put $1,000,000 into the casino's machines during one month, and then they collectively won $967,000. The casino's profit is the 3.3% that wasn't paid out, which is in this case $33,000.

The actual return, of course, will vary from session to session, and that applies even to the same machine. If the exact outcomes were known, then slots would no longer be any fun and no one would play.

The return may be contrasted with the payback. The payback is over an infinite number of spins, the theoretical amount the machine is supposed to pay back mathematically. That means that if for example, a machine were set to pay back 95% then it would return 95 cents on the dollar for every dollar played, if it were played forever.

But of course we know that a machine cannot be played forever. So looking at it in the short term anything is possible, but that is why people play slots. It is obvious that if you were to put a dollar coin into a slot machine, you would either lose that whole dollar or win some random number of coins. There is no literal case where the machine will actually spit back exactly 95 cents at you. However, if you were to continue playing for several years, your winnings would constantly came to about 95% of what you deposited into the machine. And we know mathematically that the longer we play, the more it is possible that our returns will equal the theoretical payback.

A casino specifies the payback it wants for a machine when it orders a slot machine from the manufacturer. This generally ranges from 90-98%.

Although this may seem to be a good deal, it really is not. You see of you get back only 95% of your money then the casino must be getting 5% of it. look at it this way. If you were to play a dollar machine by placing in two coins at a time, assuming 800 spins an hour. In one hour you will have put in $1600 into the machine. With the casino’s take at 5%, that means that you are losing an average of $80/hr.

For this reason casinos don't cheat with slot machines: They don't need to. The odds are so overwhelmingly in their favor, that all they have to do is to place a machine on the floor and start raking in the money.

Be clear on the fact that the expected loss is based on how much money you play, and it is not based on how much money you take with you. You might be thinking , "Well alright, I'm putting in $500, and the slots are taking an average of 5%, so I will probably lose about $25." That's wrong. You will have gone through that $500 in less than an hour when playing a $1, two-coin slot, and you will lose, on the average, $25 on that. But as you continue playing with the $475 that you received from the machine, you'll can also expect to lose 5% of that, etc. This way you will lose a bit each time you replay your bankroll. This is called the grind. In this way the casino is able to grind you down. So it really does not make any difference if the return is 90% or 99%. As long as you keep on playing you will eventually lose all your money. In order to determine your expected losses, first figure out your playing total. Here's one primer for figuring out expected loss.

The manufacturer determines the return on a machine, by taking into consideration all possible combinations and then adding how much could be won on all of those combinations. As an example, a machine might be picking a number from 1 to 64 on each of three reels, so there are 64³ = 262,144 possible combinations. Take for example, a computer that plays out at the two-coin per spin maximum, all of these possible combinations. This would represent 524,288 coins wagered. Of these, the number won would be 498,074, and 498,074 / 524,288 equals 95%.