Congratulations, You've Lost! How Slot Machines Disguise Losses as Wins

Photo: firepile

Casinos are designed for a single purpose: to separate you from your money. And they’re good at it. Commercial casinos in the U.S.  made nearly $35 billion in revenue last year, up a percent from 2009.

While they represent just a fraction of that revenue, slot machines are the casino gateway drug for the least savvy gamblers. It’s why they’re by the door. More than any other casino game, slots condition people to keep playing through positive reinforcement (bells and whistles). And the odds have gotten worse as technology has improved.

Though today’s sophisticated multi-line machines have a higher “win-rate,” the amount won is negligible, and often less than what was originally gambled. A recent study by researchers at the University of Waterloo in Ontario, finds that these multi-line machines are more effective than their single-line predecessors at taking money from the gambler by disguising losses as wins.

Casino slots today are dominated by multi-line machines, which allow you to bet on a multitude of combinations: up, down, diagonal, rather than just hoping for the three 7’s to line up across the middle on an old-school single-line machine. While that may seem like an advantage, it’s harder for the average person to accurately calculate the odds of multi-line machines.

The table below shows how losses are disguised as wins based on the number of lines the user has bet on:

Though you may win more, the pay out is often lower than what you’ve already put into the machine to begin with. So you get the bells and whistles, but it’s really just a fancy loss.


My parents used to love the casinos - and they thought it was awesome when they would put three quarters in, a couple of cherries would hit the line, the machine would light up and ring and they'd get two quarters back.

To an economist, its an LDW. To my senior parents it was fun. I call that a quarter well spent.

The lesson - never take an economist to do anything fun.


The big miss in this article is that Casinos are mandated by law to return, as wins, more than 85 percent of what they take in.

Julietta Strauss

@Joshua, what makes you think people can't rent out their pool to a neighbors? why not?

dan knudson

The fast buck is part of the ' American Dream' , that is, until it became a one-sided hustle. A sign should be posted prominently at the entry to casinos. Welcome sucker ! Our prosperity is based on mathematically challenged people . Have fun sucker. Welcome to the new American dream - officially sanctioned theft. What was at one time considered a carnival mentality has gone mainstream to the inner sanctums of government, corporations, Wall Street...step right up folks and win your little lady a teddy bear. There really is not that much difference between granny spending her social security check on a slot machine, or war profiteers fleecing the American taxpayers under the guise of patriotism. Hustlers have learned that the US treasury is where the real swag is to be made.


The main problem I have with slots is the pays are not balanced enough and not enough payouts.I lost way to much in a few yrs.someone I knOw has apparently LosT over 1/4 million in 6-8 yrs. On slots.everytime I watched him he was winning under 10$ and a good win was 500$ which rarely happened.RARELY anything higher.Everytime he leaves casino he has NO MONEY.It's very difficult to stop if you don't have other interests in life.I know.

I had to lose all my money to realize the casinos do not give fair payouts or the 92% they claim to pay.yes there is entertainment with it but a huge pricetag for it.

Jerry Krause

If you are going to the casino...get the "VLM: Today's Slot Machine" book.

I have seen normal looking people as they approach the casino and could see through the doors, almost go into convulsions. Once inside they are restless, sweating, shaking, anxious and if approached irritable. I do not know whether this book would be of much help to them. Then there are those people who approach the casino usually with a smile and who feel up-lifted. For them the casino is a perfect escape for a while from the pressures or general boredom of their daily lives. They look at any incurred loses as the price they pay for their entertainment and relaxation at the casino. But that does not mean they are resigned to walking away from the machines a loser or fatalistically believing that whatever happens is out of their control. It is these people who will profit the most from this book.

The VLM or video lottery machine is today's slot machine. You are not going to beat these machines. Instead, what this book (“VLM: Today’s Slot Machine”) will help you with (along with a complete history of slot machines, related stories and much more) is how to protect against losses and, of course fewer losses means more chances of winning. See, or look on eBay.


michael carroll

@Joshua Northey,

Yes, read some history there son. Tell us all the good the church did during the dark ages and during the time when our country was settled as they outlawed sinful activities that were unproductive to their society. There is a reason why we have a separation between church and state. There is a reason why the government should be banned from legislating morality.