1. Slot Meaning In Finance Term
2. Slot Meaning In Finance Definition
3. Slot Meaning In Finance News

This document provides guidance interpreting the requirements of the Bank Secrecy Act ('BSA') regulations¹ as they apply to the casino and card club industries in the United States. FinCEN additionally published frequently asked questions for casinos and card clubs as FIN-2007-G005 on November 14, 2007 and FIN-2009-G004 on September 30, 2009. Casinos and card clubs may continue to rely on the guidance contained in FIN-2007-G005 and FIN-2009-G004, which have not been incorporated into this publication. Section A: 31 C.F.R. § 1010.100 Casino and Card Club DefinitionsQuestion 1: Are two separately licensed, but jointly-owned tribal gaming operations, one of which is a bingo hall and the other offering casino games, both treated as casinos under the BSA regulations?

Slot Meaning In Finance Term

Answer 1: If a tribal government issues two separate licenses, one for a tribal gaming operation that only offers traditional bingo, and one for a tribal gaming operation that offers casino games, the former is not treated as a casino under BSA regulations, while the latter is treated as a casino under BSA regulations.² Joint ownership is not relevant to the determination. See FIN-2007-G005 (Nov. 14, 2007), Question and Answer 2, concerning the treatment of bingo. Question 2: Is a casino or a card club that cashes checks considered a money services business ('MSB')?

Answer 2: No. A casino or a card club that is duly licensed or authorized to do business as such, and has gross annual gaming revenue in excess of $1 million, is subject to the requirements applicable to casinos or card clubs, even if a casino or card club does its own check cashing. A casino or a card club is not required to comply with rules specific to MSBs.³ Section B: 31 C.F.R. §§ 1021.311(a) - (c) and 1021.313 Currency Transaction Reporting RequirementsQuestion 3: Can a casino comply with currency transaction reporting requirements by using a 'two-strike' system to obtain identifying information for customers purchasing chips in multiple transactions?

The definition and decision-making, as it introduces opportunities to the company as a forward-looking bridge to generating strategic alternatives. SWOT is an acronym for Strengths, Weaknesses, Opportunities, and Threats. SWOT Analysis – Internal and External Factors. Dreams of scoring big at a slot machine or game show, or finding $10,000 extra dollars in your wallet, can symbolize self-confidence, and a belief in your goals. Your subconscious is ready for you. Tax lot accounting is a record-keeping technique that traces the dates of purchase and sale, cost basis, and transaction size of each security in a portfolio.

Answer 3: FinCEN is aware that some casinos use a so-called 'two-strike' system (or possibly a similarly designed system) to obtain customer identifying information related to reportable currency transactions involving multiple chip purchases during a gaming day. Rather than obtaining information directly from a customer during a transaction, the casino relies upon computer or other pre-existing internal records to identify transactions and obtain the identifying information (e.g., Social Security Number, an address) needed to complete a currency transaction report. If the necessary identifying information is absent or incomplete, the casino will file an incomplete report and enter the name of the customer into a computerized database.

When the same customer returns to the casino on another gaming day and purchases $5,000 or more in chips with currency, the casino will check a computerized database to determine if an incomplete report had previously been filed. The casino will ask the customer for any omitted identifying information. If the customer refuses to provide the information and the customer purchases chips for less than $10,000, the casino will wait until the customer's currency activity exceeds $10,000, at which point it will again request identifying information. If the customer refuses to provide the information, then the customer is banned from further cash buy-ins until the information is produced or until the expiration of six months.

A 'two-strike' system could result in the filing of two incomplete currency transaction reports. The casino has knowledge that the same customer has conducted transactions in amounts aggregating to more than $10,000 during a single gaming day. A casino has 15 gaming days to file a complete report. If a casino has a reasonable opportunity to obtain identifying information from a customer, but instead relies on inaccurate or incomplete information in pre-existing internal records, the casino has not complied with the regulations.Question 4: Is a card club required to create and retain records of all currency transactions related to Kum Kum betting?

Answer 4: The regulations implementing the BSA require card clubs to create and to retain records of all currency transactions by customers, including records in the form of currency transaction logs and multiple currency transaction logs.⁴ This requirement applies to card clubs that offer the practice of Kum Kum betting and banking.⁵ In Kum Kum betting, bets are broken into a ratio or evenly split among individuals in a partnership, and wins or losses are divided among the individuals. An individual placing a Kum Kum bet must exchange currency for chips with a card club dealer or chip runner before a Kum Kum bet is accepted.

The regulations require a card club to file a currency transaction report for each transaction in currency involving cash in or cash out of greater than $10,000.⁶ An individual purchasing chips with currency is conducting a cash-in transaction. Card clubs completing a currency transaction report must identify persons on whose behalf transactions are conducted and must aggregate transactions based on the identities of these persons. An individual placing a Kum Kum bet places the bet on behalf of each individual in the partnership. Card clubs must have risk-based procedures to identify Kum Kum bets and the individuals involved in the bets.

Question 5: Can a casino rely on an ITIN as a means of verifying identity?

Answer 5: No. The Internal Revenue Service ('IRS') issues an Individual Taxpayer Identification Number ('ITIN')⁷ to individuals for use as a tax processing number. The IRS issues ITINs to foreign nationals and others (both resident and nonresident aliens) who have Federal tax reporting or filing requirements and do not qualify for Social Security numbers. The regulations require casinos and card clubs to verify the identities of these individuals by examining a passport, alien identification card, or other unexpired official document evidencing nationality or residence.⁸ Casinos should not rely on ITINs in verifying identity or responding to items in a currency transaction report that elicit information on verification of identity, since ITIN applicants are not required to provide identification documents.

Question 6: What transactions are exempted from currency transaction reporting requirements?

Answer 6: A casino is not required to report currency transactions with:

• Certain domestic banks;⁹ or
• Dealers in foreign exchange or check cashers, so long as the transactions are conducted pursuant to a contractual or other arrangement covering the financial services described in 31 C.F.R. §§ 1021.311(a)(8), (b)(7), and (b)(8).

In addition, a casino is not required to report the following transactions:

• Cash-ins to the extent the same physical currency was wagered previously in a money play on the same table game without leaving the table;¹⁹
• Bills inserted into electronic gaming devices in multiple transactions (unless a casino has knowledge pursuant to 31 C.F.R. § 1021.313);
• Cash outs won in a money play, to the extent it is the same physical currency wagered; or
• Jackpots from slot machines or video lottery terminals.

Question 7: Can a casino subtract cash-out transactions from cash-in transactions when aggregating multiple transactions?

Answer 7: No. Cash-in and cash-out transactions are to be aggregated separately and must not be offset against one another. If there are both cash-in and cash-out transactions that individually exceed $10,000, a casino should enter the amounts separately on the currency transaction report.

Section C: 31 C.F.R. § 1021.320 Suspicious Transaction Reporting Requirements

Question 8: Is a casino required to report suspicious transactions conducted through slot machines or video lottery terminals?

Answer 8: Yes. Transactions conducted through slot machines or video lottery terminals are transactions 'conducted or attempted by, at, or through' a casino for purposes of 31 C.F.R. § 1021.320. Exemptions from the requirement to file currency transaction reports are not exemptions from the requirement to report suspicious transactions.¹¹ A casino is required to establish risk-based internal controls for ensuring compliance with the requirement to report suspicious transactions. Risk-based internal controls¹² may include procedures for the use of automated slot monitoring systems,¹³ including a gaming device bill validator file,¹⁴ and surveillance systems to identify customers conducting suspicious activity through slot machines and video lottery terminals.

Question 9: Is a casino required to use kiosk or slot ticket redemption reports to detect suspicious activity?

Answer 9: A casino is required to establish risk-based internal controls for ensuring compliance with the requirement to report suspicious transactions, including procedures for using all available information, and procedures for the use of automated data processing systems. Many casinos offer multifunctional customer kiosk machines, connected to a gateway or kiosk server, that can perform a variety of financial transactions, such as redeeming slot machine or video lottery tickets for currency, exchanging U.S. currency for U.S. currency (i.e., breaking bills or paper money), redeeming player slot club points, and initiating electronic transfers of funds to or from a wagering account.

While ticket in/ticket out ('TITO') tickets redeemed at kiosks or terminals do not contain a customer's name or any account number, each ticket has the number of the slot machine or video lottery terminal that issued it, as well as an 18-digit validation number and a unique bar code that can be used to identify a customer.¹⁵ Although customers are limited to redeeming tickets usually valued at no more than $3,000, a customer can conduct a series of ticket redemptions in amounts less than $3,000 at the same kiosk, or two kiosks located near each other, during a short period of time (often within several minutes) and thereby avoid limits on the value of tickets redeemed at a kiosk.¹⁶ In addition, customers can feed bills into multiple slot machine validators, make no bets or a single small bet, print out TITO tickets, and cash them at a slot redemption kiosk, without human interaction. Both of the above are casino vulnerabilities. For purposes of suspicious transaction reporting, casinos should note that the reporting requirement also applies to 'patterns of transactions' that are suspicious and aggregate to $5,000. Thus, when a casino develops its risk-based compliance procedures for monitoring for suspicious activities, it must consider and use, as practicable, the transactional information in kiosk-slot ticket redemption detail reports ¹⁷ for the purposes of reporting suspicious activities.

Question 10: What must a casino or card club do when it receives a subpoena for a suspicious activity report?

Answer 10: If a casino or card club is served with a subpoena requiring disclosure of a suspicious activity report or the fact that a suspicious activity report has been filed, except to the extent that the subpoena is submitted by an appropriate law enforcement or supervisory agency, a casino or card club should neither confirm nor deny the existence of the report. A casino or card club should immediately notify FinCEN's Office of Chief Counsel at (703) 905-3590.

Section D: 31 C.F.R. § 1021.410 Casino Recordkeeping Requirements

Question 11: Are wagering accounts subject to the same recordkeeping requirements as front money accounts?

Answer 11: Yes. Customers can deposit funds or winning tickets into race book/sports pool wagering accounts, transfer funds between front money accounts and wagering accounts, and withdraw funds from wagering accounts in the form of casino checks, currency, electronic transmittals of funds, credits to a personal debit card, or as bookkeeping withdrawals to fund bets or wagers on events. Wagering accounts function similarly to front money accounts and are therefore subject to the same recordkeeping requirements.¹⁸

Question 12: When a junket representative opens a front money account at a casino, is a casino required to obtain and verify identifying information for each member of the junket?

Answer 12: A 'junket' is a term of art for a group of players who travel together for the purpose of gambling. A 'junket representative' is the person responsible for organizing the group. Junket members often are known and rated gamblers and expected to participate in a given level of gambling activity. Typically, the junket representative will send an electronic transmittal of funds to a bank maintaining an account for a casino or possibly to a money transmitter located on the premises of a casino, in an amount equal to the total funds that the members of the junket intend to gamble. The funds will be held in a front money account at a casino until the junket arrives.

Recordkeeping requirements at 31 CFR § 1021.410(a) state that 'where [a] deposit [or] account is in the names of two or more persons, the casino shall secure the name, permanent address, and social security number of each person having a financial interest in the deposit [or] account.' The provision requires that casinos verify identity at the time the deposit is made or the account opened. If a casino allows members of a junket to conduct wagers or other transactions through the front money account, then the account 'is in the names of two or more persons,' and each member of the junket has a 'financial interest' in the account.¹⁹

When a person is a nonresident alien, the casino shall record the person's passport number²⁰ or a description of another government document used to verify identity.²¹ Also, when a junket representative sends funds to a casino via an international funds transfer, customer identification requirements apply at any monetary value.²²

Casinos are required to implement risk-based procedures for ensuring compliance with the requirement to report suspicious transactions, including procedures for using 'all available information to determine the occurrence of any transactions required to be reported' as suspicious.²⁴ A casino is required to implement procedures for identifying the junket representative and each member of the junket, obtaining other information on these individuals, and conducting due diligence, for front money accounts.

Question 13: How should a casino treat jackpots from slot machines or video lottery terminals when customers lack identification?

Answer 13: Typically, jackpots from slot machines or video lottery terminals are paid in currency. If a customer does not have valid identification, a casino usually places a payout slip and currency in a safekeeping account at the cage with instructions that the deposit cannot be released to a customer until valid identification is provided. If this occurs, the transaction should be treated as a safekeeping deposit.

Question 14: What is the record retention requirement for original or microfilm records regarding a customer's gaming activity?

Answer 14: Casinos are required to retain the original or a microfilm or other copy or reproduction of all records for five years²⁴ that are prepared or used to monitor a customer's gaming activity. Also, the regulations require casinos to maintain records that are required by other Federal, State, local, or tribal laws or regulations²⁵ which can include currency transaction logs and multiple transaction logs (both computer and manual), currency worksheets, and any other similar record that a casino relies upon to track the currency activity of its customers. Further, a casino or card club may not delete or destroy paper multiple transaction logs (prior to the end of the five-year retention period). A casino or card club may not retain only a computerized worksheet of the information that is keyed in by a cage or the floor employee since the paper logs are original source documents of customer's gambling activities.²⁶

Question 15: Is a casino required to record check numbers for transactions involving personal checks in face amounts of $3,000 or more?

Answer 15: Yes. A casino is required under 31 C.F.R. § 1021.410(b)(9) to create and retain a list of transactions involving personal checks²⁷ and other specified instruments, in face amounts of $3,000 or more, regardless of whether currency is involved. The list must contain 'all reference numbers.' A 'personal check number' is cited in 31 C.F.R. § 1021.410(b)(9)(ii) as an example of a reference number.

Question 16: Is a casino required to record casino account numbers for transactions involving personal checks in face amounts of $3,000 or more?

Answer 16: Yes. A casino is required to include 'all reference numbers' in its list of transactions. A 'casino account number' is cited in 31 C.F.R. § 1021.410(b)(9(ii) as an example of a reference number. Under 31 C.F.R. § 1021.100(b), a 'casino account number' means any and all numbers by which a casino identifies a customer. Front money account numbers, wagering account numbers, credit account numbers, player rating numbers and slot club numbers are all casino account numbers.

Some casinos use one master number that applies to all accounts while others use multiple numbers (i.e., one set of numbers for deposit and credit accounts, and another set of numbers for player rating and slot club accounts). If a casino assigns more than one number to a customer, a casino must record each of the numbers for every transaction. For example, if a personal check is deposited into a front money account, a casino that assigns a customer a separate player rating number must record a check number, a front money account number and a player rating number.

Question 17: Is a casino required to record transactions in which instruments with face values of $3,000 or more are held as collateral for an extension of credit?

Answer 17: Yes. A casino is required under 31 C.F.R. § 1021.410(9) to create and retain a list of each transaction between a casino and a customer involving specified instruments in face amounts of $3,000 or more. The requirement applies to a broad set of transactions, including those where a cashier's check or business check is held by a casino as collateral for an extension of credit.²⁸ When a customer buys back the cashier's check or business check, or when a casino uses the cashier's check or business check to satisfy amounts outstanding under the extension of credit, a casino must record the transaction separately.²⁹

Question 18: Is a casino required to record transactions in which instruments with face amounts of $3,000 or more are issued or received through the mail?

Answer 18: Yes. While many transactions between a casino and a customer occur at a cage, casino accounting departments or offices also may receive winning tickets through the mail from customers (e.g., TITO, Keno, Races, and Sports) that a casino pays through negotiable instruments mailed to customers (known as 'mail pays'). In addition, a casino may receive negotiable instruments to pay off outstanding credit lines through the mail from customers. A casino must have procedures in place for ensuring compliance with 31 C.F.R. § 1021.410(b)(9).

Many larger casinos share accounting departments with other corporate divisions or related corporations. If an accounting department receives instruments from customers of a casino that are intended for other corporate divisions or related corporations (e.g., banquet payments, convention sales deposits, miscellaneous incoming checks), or for a hotel, gift shop, or restaurant operating on the premises of a casino, and the instruments are not deposited into an account of a casino, then a casino is not required to record them.

Question 19: Is a casino required to record negotiable instruments with face amounts of $3,000 or more that originate from markers?

Answer 19: Yes. If a customer fails to redeem a marker, a casino will complete the marker.³⁰ A casino will create a counter check and include on the counter check the name of the payee and a check number.³¹ The counter check is a negotiable instrument, and a casino will process the counter check through the Federal Reserve System or commercial clearinghouses and correspondent banks. To request a marker or credit extension, a customer initially completes a casino credit application. FinCEN views the completion of the marker as a 'transaction between the casino and its customer involving an official bank check.' If the counter check has a face amount of $3,000 or more, requirements under 31 C.F.R. § 1021.410(b)(9) would apply to the transaction.

Section F: Other Casino Issues

Question 20: Can a casino or card club provide customers with information cards that describe the requirements?

Answer 20: The regulations implementing the BSA do not require or prohibit casinos or card clubs from providing information cards to customers. Similarly, the regulations neither require nor prohibit casinos or card clubs from posting information placards at its cages. However, casinos and card clubs should avoid conduct (such as coaching customers on how to avoid the filing of a currency transaction report), which could be viewed as assisting customers in structuring transactions.³²

Question 21: How does a casino or card club get notices about upcoming FinCEN updates on compliance with the regulations?

Answer 21: To ensure that a casino or card club is kept abreast of FinCEN news, rulemakings, advisories, and other developments specific to the gaming industry, a casino or card club can subscribe to electronic notifications from FinCEN. Through FinCEN's free e-mail subscription management service, subscribers can have FinCEN Updates sent immediately, daily, weekly, or monthly to their email accounts or to a wireless device. Casinos and card clubs can subscribe directly at:http://service.govdelivery.com/service/multi_subscribe.html?code=USFINCEN.

Questions or comments regarding the contents of this Guidance should be addressed to the FinCEN Regulatory Helpline at 800-949-2732.

¹ See 31 C.F.R. Parts 1010 - 1028.

²If the bingo hall engages in any of the activities described in 31 C.F.R. § 1010.100(ff), then the bingo hall would qualify as a 'money services business' under that provision and a 'financial institution' under 31 C.F.R. § 1010.100(t).

³See FinCEN Ruling 2005-5 - Definition of Money Services Business (Casinos as Money Services Businesses) issued on July 6, 2005.

⁴ See 31 C.F.R. § 1021.410(b)(11). The provision applies only to card clubs. The provision standing alone requires only that a card club retain the records, as opposed to creating the records and obtaining the information necessary to create them. However, a separate provision states that 'if no record is made in the ordinary course of business of any transaction with respect to which records are required to be retained [under BSA regulations], then the record shall be prepared in writing by the financial institution.' See 31 C.F.R. § 1010.430(b).

⁵Kum Kum betting allows customers to move, add, subtract, or pool/co-mingle their bets with another customer's hand around a table or at different player positions to form one wager that is played against a player/dealer for a specific hand. Generally, the individual with the highest wager (among the seated player, backline bettors, or Kum Kum bettors) is the only one to see the cards dealt. Kum Kum banking is the practice of players (known to each other or who are strangers) and a player/banker pooling or co-mingling their funds to form one bank (a banker's roll then is owned by them all), which is used to bet against the other players at a table game. Only California card clubs offer kum kum betting and kum kum banking.

⁶See 31 C.F.R. § 1021.311.

⁷It is a nine-digit number that begins with the number 9 and has a 7 or 8 in the fourth digit, (e.g., 9XX-7X-XXXX).

⁸See 31 C.F.R. § 1010.312.

⁹See 31 C.F.R. § 1010.315. A casino or card club is a 'non-bank financial institution.' Non-bank financial institutions are not required to report transactions in currency with commercial banks.

¹⁰When a customer increases the amount of currency wagered in the money play, the increase would represent a new 'bet of currency' and a cash-in transaction that is not subject to the exemption.

¹¹FinCEN is aware of vulnerabilities in the operation of slot machines and video lottery terminals. In one prosecution, an individual pled guilty to 2nd degree promotion of prostitution and money laundering for operating an escort service while at the same time playing at a casino's electronic gaming devices, where she inserted $3,361,876 in currency, received cash out machine tickets worth $3,172,120, and then redeemed the tickets, with a total loss of only $189,756 (or approximately 6 percent). See Superior Court of the State Of Washington v. Cheryl Mae Larson, No. 07-1 -00724-6, July 2007. In a second prosecution, an individual stole $1.1 million from an international marketing firm by inflating payments mailed to recipients, and with an accomplice laundered more than $500,000 at casino high limit slot machines with minimal gaming activity during a 10 month period. See Superior Court of the State of New Jersey v. Jamine Alabre and Mathurin Ambroise, No. 07-01-00007-S, January 2007. In a third prosecution, a court found that during a 2 year period: (i) an individual promoting a fraudulent viatical insurance scheme, deposited nearly $11 million in cashier's checks at two casinos, plus used an estimated $14 million in additional investor funds, to play high-stakes slot machines, and (ii) some casinos had built a special $500-token slot machine to accept larger bets from this individual. See United States v. David Laing No. 97-0638 (District Court, Southern District of New York), September 1998. In a related matter the Court Of Appeals, Ninth Circuit, stated that '. . . Laing transferred money to the casinos when he gambled and lost money to them. . . . See FAC [First Amended Complaint] at 20 (alleging $26 million worth of deposits by Laing into defendants' slot machines).' See Fisher v. Las Vegas Hilton Corporation, 47 Fed. Appx. 824 (9th Cir. 2002).

¹²See 31 C.F.R. §§ 1021.210(b)(2)(i), (v)(B), and (vi).

¹³An automated slot monitoring system is a computerized system for slot players whereby plastic cards with magnetic strips and customer names are issued to players who then insert them into a slot machine or video lottery terminal so that a computer can keep track of a player's gambling activity or 'action' (e.g., how much the player bets, for how long), which is used to establish a level of play that may make a player eligible for additional 'comps.'

¹⁴By the term gaming device bill validator file, FinCEN means a file that includes the detail transactions of bills inserted for each slot machine and video lottery terminal. The bill validator has a computer program that produces a report, exportable to a spreadsheet, that includes terminal serial/slot machine number (also known as a manufacturer's serial number), location, customer identification number, bills currency in, amount played/wagered, dollars dropped (i.e., dollars counted), and stacker dollars (i.e., dollars placed in sequential order).

¹⁵FinCEN understands that many casino management systems can link a TITO ticket to a customer via the ticket's 18-digit validation number and unique bar code as long as a customer is using a slot club account card.

¹⁶FinCEN is aware that a casino knows a customer's slot handle for any slot club account holder who uses a slot club card during play, which gives it the ability to detect suspicious transactions. In one case, a court found that two individuals inserted $24,000 in small bills at various slot machines (the proceeds of which were from narcotics transactions), 'cashed out' with $1,000 tickets without playing, and exchanged the tickets for $100 bills at a casino cage. See United States v. Roman A. Dunnigan, No. 09-CR-363-S (District Court, Western District of New York), May 2010. Additionally, suspicious transactions involving TITO tickets and slot ticket redemption reports can be conducted by employees. For example, in one case, a court found that, during a six-month period, several slot technicians were involved in creating over $1.5 million worth of fraudulent tickets in denominations of only $1,000. See State of Nevada vs. Sutherland et al., Eighth Judicial District Court of Clark County No. 07F10879 (August 2007).

¹⁷Kiosk-slot ticket redemption detail report is a detail transaction file report containing all available data from kiosk slot redemptions. Typically, this file contains the following information: number of the slot machine that issued the ticket, ticket issued date and time, ticket number, amount of the ticket, redemption date and time, and name/number/location of the redemption machine.

¹⁸See 31 C.F.R. § 1021.410(a), (b)(1) - (3), and (6).

¹⁹A casino would need to identify the junket representative in any event. Recordkeeping requirements at 31 CFR § 1021.410(a) state that 'with respect to each deposit of funds or account opened, the casino shall, at the time the funds are deposited or the account is opened, secure and maintain a record of the name, permanent address, and social security number of the person involved.'

²⁰Since a passport does not contain an individual's permanent address, when a customer provides a passport as a form of identification, a casino or card club would need to review additional identification having a current address (e.g., a foreign driver's license). If none is available, the casino should have policies, procedures, and internal controls to mitigate the risk of not being able to verify a customer's current address.

²¹See 31 C.F.R. §§§ 1010.312, 1021.410(a), and 1021.410(b)(1).

²²See 31 C.F.R. § 1021.410(b)(5) and FinCEN's Frequently Asked Questions - Casino Recordkeeping, Reporting and Compliance Program Requirements (FIN-2009-G004, September 30, 2009), Question and Answer 20.

²³See 31 C.F.R. § 1021.210(b)(2)(v)(B).

²⁴See 31 C.F.R. §§ 1010.430 and 1021.410(b)(8).

²⁵See 31 C.F.R. § 1021.410(b)(7).

²⁶See 31 C.F.R. §§ 1010.306 and 1021.410. Also, see FIN-2007-G005, Nov. 14, 2007, Question and Answer 20, pertaining to not deleting or destroying specific computerized customer gaming activity information (prior to the end of the five-year retention period), such as player rating records.

²⁷Personal checks that 'evidence credit granted by the casino strictly for gaming, such as markers' are excluded.

²⁸However, 31 C.F.R. § 1021.410(b)(9) does not apply to situations when a voided personal or business check is used merely to substantiate a depository institution's nine-digit ABA Routing Number or a customer's account number. ²⁹The requirement does not apply to a personal check held as collateral for a marker. However, if a personal check is used to pay a marker, requirements under 31 C.F.R. § 1021.410(b)(9) would apply.

³⁰A casino will encode a Magnetic Ink Character Recognition Line ('MICR') with an American Banking Association routing number and a personal checking account number for a customer.

³¹A customer can redeem a marker with currency, cash equivalents, a personal check, or a funds transfer. If a customer does not redeem the marker, a casino is authorized to complete the credit instrument and debit an account of a customer at a depository institution.

³²See FIN-2009-A003, Structuring by Casino Patrons and Personnel (July 1, 2009).

Introduction to Slot Machine Payout Returns

So, imagine you’re playing a slot machine. How good is it? Are you winning anything? Losing? Do you know how well your slot machine performed last month or last year? What about the casino: How well did slots enthusiasts perform there last month or last year? Each of these questions is centered around a single concept I’ll be discussing in this post: slot machine payout returns.

As I’ve been discussing in other blogs and podcast episodes, one way to improve slot machine gambling performance is to better understand:

• Slots History;
• Existing and Emerging Gaming Technology; and
• Ongoing Development of State Gaming Regulations.

To provide a better understanding of slot machines for each of these slot-related areas of knowledge, this post highlights slot machine payout returns. This post has the following sub-sections:

• Introduction
• The Importance of Slot Machine Payout Returns
• Slot Machine Payout Returns and Bankroll Cycling
• Theoretical Slot Machine Payout Returns
• Actual Slot Machine Payout Returns
• Extremes of State Gaming Requirements
• Summary

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The Importance of Slot Machine Payout Returns

Let’s examine the importance of slot machine payout returns. Note that returns is plural. This is due to there being two types of payout returns: theoretical and actual.

Theoretical return is an electronic setting for the slot machine. Actual return is what was recorded once the machine had been played for some period of time. I’ll be describing both of these returns in the next few sections.

Beforehand, let’s focus on the importance of slot machine payout returns. A lot of slots enthusiasts use the term “loose” and “tight.” These popular terms are entirely about slot machine payout returns. Loose slot machines means it has higher payout returns, while tight slot machines have lower payout returns.

“Our slots are the loosest in the state!”, some casinos advertise. But, what does that really mean? If they are being truthful in their marketing, which is possible, then they are saying that their slot machines have either the highest theoretical and/or actual payout return percentages of any other casino in the state.

It is possible that such marketing is truthful due to the constant oversight of all casino activities by the state gaming commission. Loss of the casino’s gambling license might well result from untruthful marketing.

However, despite this protection, that doesn’t mean you can’t be tricked. For instance, perhaps it’s the only casino in the state. Or, perhaps it said “#1 in jackpots in Cincinnati”, when it’s Cincinnati’s ONLY casino!

The importance of slot machine payout returns comes down to an understanding for slots enthusiasts of both what is possible, determining the highest baseline returns of any available casinos, and comparing their gambling performance to others.

A later section will be about both what is possible due to state gaming regulations as well as how some states require public reporting of payout returns. In the next section, I’ll be covering how to use payout returns to provide insight into your own slots gambling performance.

Slot Machine Payout Returns and Bankroll Cycling

Each slot machine has both a theoretical as well as an actual payout return, usually given in percentages. A term similar to slot machine payout returns is hold percentages. Hold and Return can be related as follows: Hold% equals 100% minus Return%.

In essence, payout return is the amount of money won divided by the amount of money lost during a gambling period. These gambling periods might be for a single session of play at a casino, over the course of a month of gambling, or even for a full year.

As you might imagine, an electronic record is kept for each slot machine’s performance. This record can be used by the casino operator to understand actual performance versus planned performance of the slot machine. Other statistical information can also be gleaned, if desired, such as the performance of groups of slots machines as well as the overall casino property.

Typically, payout returns are only discussed in terms of slot machines. It isn’t practical to have this information in terms of a player. Why? Because this statistical information is only useful if there is a lot of data, and even the most ardent slots enthusiasts doesn’t play much when compared to groups of slot machines at a casino.

Besides not having data lakes of statistical information, slots enthusiasts have no practical way in which to collect the amount of each individual bet along with its outcome. Doing so would require using some kind of electronic “gaming tool” device, which is typically strictly illegal in most U.S. states.

What is important for a slots players is to record their overall performance, including date, gambling establishment, bankroll, and any winnings. As previously mentioned, I’ll be detailing gambling recordkeeping in an upcoming post. But, for now, a player’s actual payout return can’t, in general, be accurately calculated by winnings divided by bankroll due to bankroll cycling.

In the busy casino environment, and adhering to the restriction on using an electronic gaming tools, there is a simple way to keep track of a player’s payout return. I use it all the time, in part to keep track of when I’ve spent my original bankroll amount. Knowing when this happens, when the first cycle of a bankroll ends and the second begins, can be difficult to guess. So, don’t guess. Count!

When you put some or all of your bankroll into a slot machine, note how many credits that is. You’ll need to remember that number of bankroll credits for later. Then, as you play, keep track of how many credits you’ve bet. When credits bet equals the original bankroll, you’ve completed your first bankroll cycle.

Next, how many credits remain in the machine? Divide this by the original bankroll credits to get the player’s return. If you’ve won more than your bankroll, this return will be over 100%. If less, than the return is under 100%.

Time for a couple of caveats. First, don’t spend your bankroll on that slot machine if you’re not winning anything. I usually try to let the machine run for 15-20 bets before making a decision about whether or not to continue of that slot machine, but sometimes stop earlier if I’m seeing absolutely no wins.

Second, you may not win back your entire bankroll. For most slots players, this is highly typical. This is where the tough decision lies. If you’re winning a little, are you winning enough? This entirely depends on your own gambling goals.

For entertainment gamblers, the bankroll brought to the casino is essentially meant to be spent on entertainment. For those trying to earn maximum comps, bankroll cycling is the best way to earn comps. But, will it cycle as many times as needed if the bankroll at the beginning of each cycle significantly diminishes?

For maximizing take-home, is enough bankroll cycling occurring to give the slot machine enough time to play such that a bigger jackpot becomes more likely?

Theoretical Slot Machine Payout Returns

Each slot machine has a theoretical hold percentage or, when subtracted from 100%, a theoretical return percentage for the casino. The expression payout return is often used, but those two words is redundant. A return from a casino is actual the same as a payout.

Slot machine manufacturers design the electronics of slot machines to have a range of possible or theoretical payout percentages, from which casino operators can select as needed.

In general, slot machine manufacturers don’t share how this is accomplished, not specifically. But, they don’t really have to. It’s done in the usual ways. As the saying goes, and with all due respect to slots manufacturers, it’s not rocket science.

One enterprising individual has created a YouTube video about how theoretical odds are selected after opening a slot machine. How was he able to do this? He personally bought a slot machine, then created a video of how to do it using the equipment manual from the slots manufacturer.

While I have most recently been unable to re-locate that specific YouTube video, so will have to explain it here. If anyone locates it, please comment with a link on this post. In it, he showed that there were 6 theoretical hold settings possible to encode into the machine.

Further, he explained that the highest setting made almost every bet a win. And, for the lowest setting, any winnings at all were quite rare.

If the hold percentage is high, meaning that the casino retains a relatively high amount of the players cash-in over time, then the player considers the slot machine to be “tight”. If the hold percentage is relatively low, so less of the player’s cash-in is lost to the casino, it is considered a “loose” slot machine.

Slot machine manufacturers and casino operators do not make hold or payout percentages of specific slot machines available to the public, naturally enough. And, with technology marching forward as it tends to do, the number of settings has likely increased somewhat alongside adding remote access to adjusting the odds electronically.

This assumes any such changes in technology have been approved, as required, by the gaming jurisdictions into which they will be installed. This tends to not be a fast process, and has slowed down the advancement of new gaming technologies to something which, in my opinion, is almost manageable.

So, a set of theoretical slot machine payout returns is provided by slots manufacturers to their customers. At any given time, a casino operator selects one specific theoretical return setting.

This setting, however, must first be determined by the casino operator, who evaluates it for both desired casino performance metrics as well as for complying with their gaming jurisdiction requirements.

What I think is interesting about theoretical slot machine payout returns is how they are different from any other game available at a casino. Roulette, craps, and any card game is based on rules. These rules, which are provided to any player of the game, very specifically define the odds of winning.

Therefore, websites like Michael Shackleford’s The Wizard of Odds can exist to provide those various odds of winning to a fair degree of accuracy by simply calculating them. They are not perfectly accurate, but they are certainly, as usual for these sorts of calculations, “good enough” for this application. Again, it isn’t rocket science, folks.

My point here is that most games in casinos have known odds of winning, to a high degree of accuracy, and slot machines do not. For slot machines, the odds of winning are never known outside of a very few employees at casinos, and they’re not sharing due to serious legal ramifications if they were to do so.

So, without theoretical slot machine payout returns being available to slots enthusiasts, what are we to do? What we do is take a close look at any available actual slot machine payout returns that might be available to us.

Actual Slot Machine Payout Returns

Actual slot machine payout returns are the results obtained from playing slot machines. The theoretical payout return is just that: theoretical. Statistical variation around that setting is expected, which is why actuals are important.

I’ll put this another way: First you plan (theoretical), then you see what happens (actual).

Some level of actual slot machine payout returns can be gotten in 5 different ways. I’ll go over each of these sources of information. They are:

1. Looking at one’s own performance;
2. Historical performance as noted on a specific slot machine;
3. Analyzing the performance of many slot machines;
4. Public posting of payout returns in various online forums and groups; and
5. Public posting of actual payout returns by a gaming jurisdiction such as a U.S. state government.

A strictly limited amount of actual slot machine payout returns can be known based on your own performance, as mentioned in the prior section on bankroll cycling.

This set of data is what is known to statisticians as a relatively small sample size, which is of limited usefulness. Yet, it’s not completely useless!

Another way actual slot machine payout returns can be known is if they are provided by the casino to the player. At some casinos, the amount and times of taxable jackpots from within the last week may be posted on the side of slot machines.

I’ve seen this done at Horseshoe Casino Southern Indiana. However, this practice of posting a machine’s jackpots on the side of that machine is very casino specific and is not typically available.

A player will need investigate if doing so occurs at any casinos they visit. Also, these posted jackpots are for only taxable jackpots, jackpots over $1,200.

With an extraordinary amount of time along with a huge financial investment, it would be indeed possible to fully map out the payout percentages of a single slot machine.

Keep in mind that each slot machine has several possible payout percentage settings available to it, which complicates both performing this procedure as well as successfully using that extensive information afterwards in an advantageous manner.

Simply put, it is a highly impractical strategy given vast amount of money required as well as the lengthy time involved betting, recording each result, and post-processing the results.

Further, doing so provides only an understanding of a machine’s settings at that time, and ignores potential changes to those settings that may be instituted by the casino immediately following that data collection period.

Online forums and gaming magazines publish payout percentages for players interested in finding supposedly “loose” slot machines. If reviewing such sites, be careful to ask and look for the source of this information.

As usual, a player needs to trust their instincts. I’m certainly not the first person to say this, but… if it seems too good to be true, then it probably is.

From a high level perspective, let us consider that there are only four possible sources for payout percentages of specific game themes. These four sources are:

1. employees of game manufacturers;
2. employees of casino operators
3. extensive player statistics; and
4. outright guesswork with no real value.

While three of these could potentially provide accurate information, two of those would have to have been obtained illegally. So, be wary of public forums and groups trying to provide you with slot machine payout returns, especially if a payment is required. I’d be very, very cautious unless you can confirm that the information has been obtained directly from a gaming jurisdiction such as a U.S. state gaming commission.

Finally, there are actual slot machine payout returns obtained from a gaming jurisdiction, which they have because of their legally established gaming regulations. Put another way, casinos provide these statistics when gaming jurisdictions require them to do so.

At the time of this writing, I’ve published 40 posts on slots-specific gaming regulations for the 56 U.S states, territories, and federal district. I’m writing them weekly, and proceeding through them alphabetically. I’ve currently at Oklahoma, with both Oregon and Pennsylvania to be published within the next two weeks.

These state-by-state reviews of slot machine casino gambling are available on my website as an online resource for slots enthusiasts. A summary article, Slot Machine Gambling, State-By-State: A Weekly Blog, has weekly updated links to each U.S. state, territory, and federal district as the next blog article is posted.

Myths of Slot Machine Payout Returns

As previously mentioned, theoretical slot machine payout returns are not known except to a few employees at casinos. This lack of knowledge has, as is often the case, generated quite a few myths. I talk about a few of these myths next, and provide a few reasons why some of them may or may not be true.

One myth often said is that it is a good rule of thumb for players that slots with higher denominations tend to have a higher payout percentage. The best way to analyze this myth is to look at the six state gaming commissions that provide actual payout statistics for slot machines with different denominations.

• Colorado: The highest slot machine payout returns appear mostly centered on $1 slots, with the lowest returns entirely on penny slots;
• Connecticut: Slot machine payout returns mostly increase with denomination all the way up to $100 at Foxwoods, but peak at $25 before decreasing at higher denominations for Mohegan Sun’s slot machines;
• Louisiana: The lowest slot machine payout returns across all four of Louisiana’s gaming regions are for penny slots. Otherwise, two regions peak at 5-cents and two regions peak at the maximum $5 denomination;
• Mississippi: Two of Mississippi’s three gaming regions have slot machine payout returns that peak at the 5-cent denomination, while the third peaks at the maximum $5 denomination;
• Nevada (listed separately for multiple locations), and
  • Lake Tahoe, North Shore: Peaks at the maximum $1 denomination, but penny slots have the second highest;
  • Lake Tahoe, South Shore: Steadily increases to peak at the maximum $1 denomination;
  • Las Vegas, Boulder Strip: The highest return is for the 25-cent denomination;
  • Las Vegas, Downtown: The highest return is for the $1 denomination non-Megabucks slot machines, with the lowest being the $1 denomination Megabucks slot machines;
  • Las Vegas, North Las Vegas: The highest return is for the 25-cent denomination
  • Las Vegas, The Strip: The highest return is for the $1 denomination, with the second highest for the 5-cent denomination;
  • Laughlin: The highest return is for the 25-cent denomination;
  • Reno: The highest return is for the 5-cent denomination;
  • Sparks: The highest return is for the maximum $5 denomination; and
  • Wendover: The highest return is for the maximum $5 denomination.
• South Dakota: The highest return is for the 5-cent denomination.

As shown, almost exactly half of the locations that provide denomination-specific slot machine payout returns show maximum denomination machines have the highest return. However, the other half do not show this. However this is interpreted, it is safe to say that maximum denominations having the best payout return is not a very good rule of thumb.

Another myth also considered to be a good rule of thumb is that the more active a bank of slot machines are, the higher the payouts tend to be. I know of no way to prove or disprove this rule of thumb with state-provided statistical data. However, I will point out that the actual saying doesn’t make logical sense or, more specifically, doesn’t provide a lot of value.

Why? Because of the two slot machine odds of winning, which again are: 1) if you win, and 2) how much you win. Based on this understanding of the odds of winning, a bank of slot machines that is actively providing wins is separate from how much is being won.

As is starting to become apparent to me, this myth is a slight misunderstanding of what is actually occurring. Whoever created the myth is on the right track, but hasn’t quite clarified it well enough.

The winning strategy this relates to, detailed above, is to try to continue to play slot machines which cycle bankrolls in the hopes of letting the slot machine run long enough to more likely generate a higher amount jackpot.

Players should keep in mind that these “good rules of thumb” are general trends, at best, and may not have much grounding in actual practices. In other words, be careful if planning to make extensive use of them.

Alternatively, send me your slot machines rules of thumb, and I’ll evaluate them for you. I’ll be your very own slots Myths Buster!

State Gaming Requirements for Actual Slot Machine Payout Returns

Some gaming jurisdictions such as U.S. states, territories, and federal district have made it a gaming regulation that casinos within their borders provide them with weekly or monthly actual slot machine payout returns. A few of them then provide this statistical data to the public.

To see if your state provides these statistics, or legal limits on slot machine payout returns, check with your state’s gaming control board. Alternatively, you can check the free online resource I’m building: A weekly state-by-state review of slot machine casino gambling for each U.S. state, territory, and federal district available at Slot Machine Gambling, State-By-State: A Weekly Blog.

In terms of slots history, I’ve compared the annual return statistics for states with casinos in both 2007 and 2017. While most states show actual return percentages to have dropped by as much as 1.5%, some states showed no changes while a very few states showed only slight increases.

In addition, gaming jurisdictions can choose to set higher and lower legal limits on slot machine payout returns. The lower legal limits on slot machine payout returns are of the greatest interest, of course. However, this isn’t quite as easy as it seems.

Casino properties don’t often set these limits as low as they are legally allowed to, in part because it’s not good for business. Casino properties are very much aware that their business depends on having a good reputation.

If it becomes known as a place to lose money, whether or not this is actually true, such a blow to their hard-won reputation may have dire financial consequences.

Another reason is due to the nature of a theoretical setting versus an actual result. Casinos have to be careful their actual returns stay above the lower legal limit. Otherwise, their gambling license could be put at risk.

If they attempt to carefully keep their theoretical slot machines payout returns only slightly above the legal requirements, a short-term drop in actual slot machine payout returns near the end of the reporting period could potentially result in being non-compliant to state gaming regulations. That wouldn’t be good. That wouldn’t be good, at all.

Summary to Benefits of Slot Machine Payout Returns

In summary, how well slots enthusiasts perform is primarily centered around both the theoretical and actual aspects of slot machine payout returns. Slot machine payout returns are how much a player wins divided by how much is bet. It is how much a casino returns to a player as a percentage of the total amount a player bets.

These slot machine payout return percentages determine what is possible for a slot machine player to achieve over long-term play. This is typically calculated for a single slot machine.

Hold percentages, which is how much the casino keeps of the total amount bet by the player, are simply 100% minus return percentages.

Personal returns can also be calculated, but is practically difficult as well as problematic for individual players to either record or calculated based on their own play on every slot machine which they gamble on.

Using the concept of payout returns, I provided a simple way to count bankroll cycles as a way to gain insight into individual slots gambling performance.

Theoretical returns are relatively unknown to anyone except for the slots manufacturers who design a set of possible settings to the casino that chooses one precise setting at a time. Actual returns are the financial results of slot machines from being played.

Further, using actual payout return statistics of state gaming control boards, I broke the myth that higher denomination slot machines have higher payout returns. Using 2017 actual payout returns, I showed that this phenomenon only occurred 50% of the time.

Slot Meaning In Finance Definition

Another potentially mythical rule of thumb, that an active bank of slot machines have a higher payout return, was shown to be nonsensical from a logic point-of-view. This was done by explaining how slot machines have to independent calculations for determine the odds of winning:

1. If there is a win; and
2. The amount of that win.

Also, I’ve reviewed several different state gaming requirements for actual slot machine payout returns, so-called slot machine performance statistics. A 2007 to 2017 historic comparison was provided of actual payout returns between the same casinos 2007, where:

Slot Meaning In Finance News

• Most states showed a 1.5% drop in actual slot machine payout returns;
• Some states showed no change in actual slot machine payout returns; and
• Very few states showed slight increases in actual slot machine payout returns.

Finally, I went over some of the dangers to casino for non-compliance towards legal limits on slot machine payout returns. The danger lies in the fact that actual payout returns statistically vary from set theoretical values.

Casinos have to make sure their actual slot machine payout returns ALWAYS stay about the legal limits, but can only attempt this by carefully controlling theoretical payout returns for their slot machines.

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Have fun, be safe, and make good choices!
By Jon H. Friedl, Jr. Ph.D., President
Jon Friedl, LLC