IGT rapidly improved on these early slot machines by introducing sound and lights, five-reel games and multi-line bets. Its popular Megabucks dollar slot game, using the MegaJackpots concept, was adapted to incorporate over 30 other systems.
- Appendices
- Slots Analysis
- Miscellaneous
Introduction
IGT started out as a developer of slot machine cabinets for the brick and mortar casino, and it was founded in 1975. Its founder’s name was William S. The name of the company stands for International Game Technology. The company went public in 1981. In 1984, it acquired its first company, called Electronic Data Technologies. Megabucks (R) is a 3- coin dollar progressive slot machine that was launched in Nevada casinos in March 1986. The Nevada progressive system connects 691 slot machines in 160 Nevada casinos to a top jackpot that builds from a base amount of $7 million. The top jackpot is paid in annual installments, upon verification of the win.
This page investigates the odds of the progressive jackpot slot machine, Megabucks, including the average jackpot and breakeven point.
For now, let's ignore the fact that a jackpot is paid by installments over 25 years and that the jackpot would be subject to income tax.
I don't know exactly how Megabucks is programmed. However, there is some information that is public knowledge. If we fit the pieces together, we can make a pretty good estimate of the point at which the return is 100%, known as the 'breakeven point.' Here is what we do know:
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- According to John Robison, the probability of hitting the jackpot is 1 in 49,836,032. This figure comes from an article titled Megabucks closes in on record jackpot from the Las Vegas Sun, Dec. 24, 1999. That probability comes to (1/368)3, implying each reel has a 1 in 368 chance of stopping on the jackpot symbol.
- The Nevada Gaming Control Board indicates that the profit of Megabucks on both a percentage and dollar basis. The following is a summary for 1994 to 2009.
Megabucks Win — 1994 to 2009
Year Win ($) Win (%) 2009 53,352,000 10.43% 2008 83,981,000 11.85% 2007 88,858,000 12.72% 2006 100,923,000 12.39% 2005 100,923,000 12.39% 2004 67,326,000 10.54% 2003 83,069,000 10.41% 2002 76,842,000 11.98% 2001 69,821,000 11.50% 2000 69,103,000 9.75% 1999 74,921,000 12.28% 1998 134,943,000 12.25% 1997 66,166,000 12.18% 1996 57,619,000 10.03% 1995 65,223,000 10.48% 1994 46,760,000 9.44% total 1,239,830,000 11.39% The key piece of information from this table is that the overall profit of the game has been 11.39%. In other words, 88.61% is returned to the players.
- According to defunct source, starting in September 2005, Megabucks was reset to a jackpot of $10 million. Before that, the reset value was $7 million.
- According to a2zlasvegas.com, there have been 11 jackpots hit between September 2005 and the date of the last jackpot (Feb. 21, 2010). That same website shows a jackpot was hit on September 15, 2005. The number of days between then and the time of this writing is 1,619 days. We also see from that website that the total of the last 11 jackpots was $167,367,727. Of that, $110,000,000 was from the reset amounts and $57,367,727 was from the progressive contribution.
The portion of money returned to players in form of jackpots is thus $167,367,727/$1,644,589,056 = 10.18%. From the Nevada Gaming reports, we know a total of 88.61% is returned to players. That means that the portion returned to players in non-jackpots is 88.61% - 10.18% = 78.44% (The 0.01% apparent difference is due to rounding).
If there were no small wins, and no progressive contribution, then the return of the game would be $10 million/(3×(1/368)3) = 6.69%. As already shown, the total return from jackpots is 10.18%, leaving 3.49% coming from the jackpot meter. Here is a summary of where each $1 bet on Megabucks goes:
Megabucks Breakdown
| Item | Cents |
|---|---|
| Fixed wins | 78.44¢ |
| Meter reset | 6.69¢ |
| Progressive contribution | 3.49¢ |
| Profit | 11.39¢ |
| Total | 100.00¢ |
The average point at which the jackpot will hit is 10 million + [$3 × 0.0349 / (1/368)3] = $15,215,248. In 2006, when the jackpot was almost $16 million, IGT, Megabuck's creator, purchased ads in the local media stating that the jackpot was 'overdue' to hit. I'm quoted in a Las Vegas Sun article about it, titled 'Pennies ready to pop'. This would seem to indicate my $15.2 million figure is not far off.
If j is the jackpot at which the game becomes a fair bet, with a 100% return, then we can solve for j as follows:
1 = 0.7844 + j × (1/368)3/3
j × (1/368)3/3 = 1 - 0.7844
j = 3 × (1 - 0.7844) / (1/368)3
j = $32,238,319.
The probability of any given jackpot growing this big is 1.41%. At the current rate of play, a jackpot should get this big once every 29 years, on average.
At any given time the return can be estimated as 78.44% + 0.6689%×m, where m is the number in millions of the current jackpot. For example, at a jackpot of $15 million, the return would be 78.44% + 0.006689×15 = 88.47%.
Everything in this page should be taken as a ballpark estimate. Various factors could cause it to be off, including players not betting the full $3 and the fact that while 11 jackpots were hit in the study period, the expected number could be higher or lower.
It also bears repeating that the above does not factor in the annuity or taxes. Let's look at what happens if we do consider those factors. For the time value of money, let's use the return on long-term Treasury Bills. Megabucks jackpots are paid in a 25-year annuity. At the time of this writing a 20-year T-Bill paid 4.58% interest, and a 30-year one paid 4.74%. Let's split the difference at 4.66%. Using some actuarial math I won't get into, the value of the annuity is worth 61.07% of face value, based on that interest rate, and 25 annual installments, at the beginning of each year.
For taxes, let's assume close to the expected jackpot of $15 million. Under 2010 income tax rates, assuming the winner is filing jointly, and all other income exactly equals deductions, the taxes due will be 30.05% for 2010. Assuming no change in the tax law, that will drop over time, because the tax brackets will be adjusted upward, but the winning payments won't be. I tend to think the recent passage of health care will increase tax rates, especially on large incomes. Let's just assume those factors cancel each other out, to keep it simple.
So to keep things in round numbers, the winner will keep 61% after the annuity, and 70% of that after taxes. So the jackpot winner will see about 61% × 70% = 42.7% of his winnings in current dollars. Factoring the annuity and taxes, the breakeven point becomes $75.5 million. The probability of any given jackpot growing that big is about 1 in 283,000, and will happen once every 114,000 years. Again, I'm making lots of assumptions, so these estimates should be considered very rough.
After publishing this article, a reader quoted a page at slot-machine-resource.com, which states that after the first installment is made, the player is given the option to get 60% of the rest immediately, or stick with the installment plan. Tax implications aside, which favor the annuity, the interest rate at which the two options are equal is 4.581%.
External Links
- Megabucks Closes in on Record Jackpot from the Las Vegas Sun, Dec. 24, 1999.
- Nevada Gaming Control Board
- Slots Payout percentage, from Cassaon Casino.
- History of Megabucks Jackpots, from a2zlasvegas.com.
- Pennies Ready to Pop, from the Aug. 9, 2006 Las Vegas Sun.
- Megabucks, from slot-machine-resource.com.
Written by: Michael Shackleford
International Game Technology is a large company focused on manufacturing electronic machines and technology for gambling applications. The company was founded in 1951 and is often referred to as IGT for short. Though it is now a massive multi-national company with offices all over the world, IGT originally started out as a small business which didn’t start gaining notoriety until they invented video poker in the mid-1970’s.
In 1981, as the popularity of their slot games and video poker machines began gaining popularity, IGT went public. They remain a publicly traded company to this day on the NYSE under the symbol: IGT.
The company now manufactures and distributes a wide range of slot games alongside their iconic Game King video poker machines. Many of the games produced by IGT are the most well known in the entire world. It all started with one simple game; Jacks or Better video poker. Shortly thereafter, Deuces Wild and Joker Poker were added to Game King machines. Today, most of the video poker machines you’ll come across on the casino floor at a casino bar are manufactured by IGT.
Simpsons high roller slot machine. Here it’ll get you a variety of prizes depending on multipliers. It may not be as pulse-racing as driving a Formula 1 car or strolling through a Vegas casino with your entourage, but it’s free and fun and you can’t ask for much more than that now, can you?In High Rollers Slots there is a racing theme to the machine with cars and chequered flags amidst the free spins.
Jacks or Better Video Poker Variants
Jacks or Better is the game that a majority of video poker variants are based on, and consequently they all have similar strategies. Below is a list of games owned by IGT, which are all derived from the original Jacks or Better. These are common games that can be found on Game King machines; the most popular video poker devices in the world.
Bonus Poker – Offers bigger payouts for quad aces, 2’s, 3’s, and 4’s compared to Jacks or Better.
Double Bonus – Offers 2x payouts of Bonus Poker on all quads with increased jackpots for four aces, 2’s, 3’s, and 4’s. In exchange for these higher payouts, two pair pays half of its normal amount.
Double Double Bonus – Offers similar to Double Bonus, except that there are increased jackpots for quad aces, 2’s, 3’s, and 4’s when one of these cards is also the kicker.
Triple Double Bonus – Four aces with 2, 3, or 4 kicker pays the same as a royal flush. The catch is that full house and flush returns are much lower to make up for this.
Bonus Poker Deluxe – All four of a kind pay 80 credits per coin, however two pair returns even money.
IGT Slot Games
In addition to video poker, IGT is also a major manufacturer and distributor of slot machines. The company owns a variety of the world’s most popular slots titles, including the entire line of Wheel of Fortune slot machines, which were acquired by IGT when the company took over Anchor Gaming in 2001. Some of other popular titles manufactured by IGT include Top Dollar, TMZ, Willy Wonka and the classic Triple Double Diamond – just to name a few.
Needless to say, if you have visited a casino anytime during the last decade, then you have most likely played at least one IGT slot machine. Below is a complete list of all slot machines made by IGT.
Full List of IGT Slot Machines
Age of Aurora
Betty White
Breaking Bad
Cleopatra
Cleopatra II
Da Vinci Diamonds
Gentlemen Prefer Blondes
Ghostbusters
Jurassic Park
Kitty Glitter
Megabucks
Pharaoh’s Fortune
Pinball
Shadow of the Panther
Sphinx
Tabasco
TMZ
Top Dollar
Triple Double Diamond
Wheel of Fortune
Wild Fury
Willy Wonka and the Chocolate Factory
IGT Progressive Slots
As one of the world’s largest electronic gaming companies, IGT has slot machines in virtually every US casino. This has allowed them to offer progressive jackpots on some of their slot games. For example, the progressive jackpot on Wheel of Fortune machines are often networked with other casinos in the same market (or state). States like Nevada, New Jersey, and South Dakota allow the networking of Wheel of Fortune and other progressive games, such as IGT’s Megabucks.
IGT Electronic Table Games
IGT distributes three virtual table game machines; Enchanted Blackjack, Golden Baccarat, and Roulette Revolution. While they are not nearly as popular as their slot machines or video poker games, IGT electronic table games are still featured in a large number of casinos around the world.
Ticket In/Ticket Out
The original ticket in/ticket out slot payment processing system was invented by IGT under the EZ Pay name. This allowed casinos to close hard-count rooms where coins used to be processed. This new system allowed cash to go to the bank or into tills as bills. The process made it easier for players to move from one machine to another and greatly reduce the number of slot attendants needed. It also allowed for multiple denomination machines.
IGT in Online Gaming
IGT acquired WagerWorks in 2005. This allowed it to enter the online gaming market. It operates many online casinos in regulated markets in Europe. IGT acquired Entraction in 2011. This was an online poker platform. This was possibly the worst acquisition in the company’s history. It left many markets due to the lack of regulation. The Entraction Network eventually failed and ceased operations due to a lack of players and revenue. The software was never used in the United States, a market where the online poker platform was presumably purchased to enter.
IGT spreads internet casino games in New Jersey through distributor agreements. Online games include its proprietary slot titles, Game King video poker, blackjack, and roulette.
GTECH Acquisition of IGT
Megabucks Slot Machine Jackpot Winners
In July 2014, IGT agreed to be acquired by GTECH, formerly known as Lottomatica. The purchase price was $6.4 billion. This included $4.7 billion in cash and $1.7 billion in assumed debt.
Megabucks Slot Machine Current Value
