Gambling machines are not legal everywhere around the US. Some states make them legal and harvest money every single month while some other states think they are immoral, tricking people out of money, etc., etc. But the big thins is that people will gamble if they want, so it doesn’t make sense now to legally forbid them to play gambling games. A lot of states understand that and use this as their advantage.
But how much a bar can earn from each machine? We’ve conducted a big investigation and here we are ready to share some results. Whether you are a bar owner or just a player who wants to know the truth, we have to tell you that within all our research we haven’t found any bars or other establishments that would lose money on gambling machines.
Here’s what exactly we’ll discuss today:
- How does it work at all? How do slot machines legally get to bars?
- What is the revenue share? Do bars take all the money the machines earn?
- What’s the return percentage of an average slot machine in a bar?
- Finally, how much can a bar earn if it installs slot machines?
Let’s get started!
How does this sphere work with slot machines in bars?
We have to say that every state where gambling is legal has its own rules. We’ll focus our attention on Illinois, but the overall figures in our investigation will be more or less the same for all states where gambling is legal.
So, in most cases, the bar owner who wants to have slot machines in their place, has to get a kind of license from local authorities. After that, they can find a company that owns slot machines and has the corresponding license. These companies are the only ones that are eligible to provide slot machines with licensed software that. So, you can’t just buy a slot machine and put it in your establishment.
This is one of the surprises because now you know that at least two companies earn money on that machine. Also, the government earns some money, so the single slot machine gives revenues to three different bodies.
Here’s what you should know:
- illegal gambling or violation of any rules and laws in this sphere will cost any part involved a huge amount of money;
- the company that owns the slot machine makes all counting, so it will pay tax and give money to the establishment owner eventually;
- the tax is different in all states, but we believe that about 30% will go to the government eventually;
- all money go to state but some of the profits are then returned to the city budget, so gambling money goes to good things in the end;
- of course, the revenue of the single machine depends much on the location, patency, clientele, and other important factors;
- but in most cases, a slot machine will earn money, not lose, although, potentially, losses are possible.
It’s important to know that every slot machine that works in bars or casinos should be registered and licensed. Also, it has to be maintained by the licensed company. It means that this machine will have licensed software on it and will have the official RTP or return percentage. So, it doesn’t matter where you play – in the casino or in the bar – you have the same chance of winning.
Although the RTP may be stated as 92%, for example, you shouldn’t be too hopeful for that insane figure. Real return percentage in slot machines is never that high because software developers use different trick to manipulate that figure. As far as we are concerned, the real RTP of 80% is more or less acceptable. And this is what most slot machines will provide you with.
How is the revenue from slot machines in bars split?
The revenue from slot machines is divided into at least three parts. This is how it works in Illinois. But in some states, there will be additional taxes, too. We should tell you that in every case, you should check the taxes and revenue split rules because they may differ dramatically from what we focus on today.
So, in Illinois, the state will take about 30% of what is earned on a slot machine. It appears to be pretty much money, by the way. And the state gets this money just for allowing bars to put those machines. Weird rules, but OK.
The other 70% of the overall revenue are split in half between the establishment and the slot machine owner. A lot of bar owners would love to buy slot machines and not share that huge amount of profits with other companies. But it’s extremely hard and expensive to get the needed license. So, they need to find someone who managed to do that and share their revenues.
So, the answer to the main question of our article today is 35%. This is exactly the share that bars get from the overall profit if they have slot machines in their places. They get 35% of the profit if the machine gives any revenue. If not, they don’t pay anything but will need to cover losses together with the slot machine owner. We’ve never heard about such cases, anyway.
Now, the question doesn’t seem to be fully answered. 35% of what do they get? How much money is that? Let’s try to figure out.
How do you understand the RTP and how much do machines earn?
You may go to the website of a software developer and see that the slot machine that you played yesterday has the official RTP of 92%. This is the average claimed RTP though it’s counted with some tricks, so we should think about 80% immediately.
It means that 80% of the money that players pay as stakes goes to wins. So, if you insert $100 to the machine, it will send $80 to the win fund and the other $20 will go to the revenue fund. It’s a little more complicated than that, but you should understand the idea now.
Here’s what happens next:
- this money keeps accumulating and the software then decides when to give some wins and when to hold horses a little;
- also, if the machine has jackpots, it can be pretty greedy in every spin to accumulate money for the jackpot – it’s not the magic money that comes out of nowhere;
- hypothetically, the machine can lose if the winners will immediately withdraw all the money and stop playing;
- but in real life, this never happens because gambling is addictive and you keep playing till you lose all the money you can afford to lose right now;
- in the end, the 80% RTP algorithm can take all your money and put it to the revenue fund because all the wins will count – even those that you immediately spend for stakes with no wins.
Although its pretty hard to understand, you should remember one thing: casinos and slot machines always win. This is the mathematical law that they have as their main weapon. They are programmed to win, so they will always make money and they are the perfect business. But not without its share of possible problems.
How much money can one slot machine earn a month in a bar?
Now, the most interesting part. How much money can a machine earn to the state, bar, and machine owner? We’ve seen the stats for gambling revenues in different locations and found out that every single machine earned money. At least, no establishment ever lost money in Illinois in that year.
The average income from a single slot machine was different for various locations. This depends on the turnover, so the number of people who played the machine during a certain month will greatly change the overall revenue.
But here are some facts:
- in Springfield, at the time of investigation, there were about 500 slot machines and the city has about 115,000 of population;
- also, in the same year, Springfield generated the average monthly revenue of about $3,000,000 from slot machines;
- it means that the government earned roughly a million dollars a month and gave back about $150,000 to Springfield budget monthly;
- it also means that each machine earned about $6,000 of the monthly income;
- about $2,100 from each slot machine were given to bar owners and slot machine owners (35% of the overall sum);
- given bar owners can put the maximum of 5 slot machines in their establishments, bars can earn about $10,000 monthly with slot machines.
Please bear in mind that these figures are calculated for Springfield in Illinois which is not the biggest city we’ve ever seen. Maybe, if your bar is located in the city or town where there are less than 1 slot machine for every 200 citizens, you will earn more.
Also, all calculations were made for one of the recent years but not for the current time. Unfortunately, we don’t have access to all the up-to-date information about gambling business. But we believe nothing changed much in the stats and the figures are still more or less true.
