Last month we examined progressive jackpots to see how they affect real money slot machines’ theoretical hold and your casino in general. We saw that the amount contributed to a progressive jackpot must come from somewhere — either from the hold amount, the theoretical payout or a combination of both.

In order to convert an existing game to a progressive, we must consider where the contribution will come from. In some regards, we are at the mercy of the library of games available from the manufacturer; consequently, we may not be able to switch to a game that matches our exact desire.

However, most popular progressive games come in a number of variations, so selecting a game that closely matches should not prove too difficult.

This month we’ll study progressive jackpots in more detail. To start, we’ll make a couple of assumptions about our exercise. First, let’s assume we already have a game with the proper theoretical payout percentage and theoretical hold that will allow a specific percentage to be accrued in the progressive jackpot.

Second, let’s assume the game is a 3-reel stepper game, which will make our calculations as simple as possible.

## Base Jackpot

Mathematically, a progressive jackpot game is not much different from a game that does not offer a progressive award. The word “progress” means “to advance,” and we must advance from somewhere. In most cases, the progressive amount is applied to the largest payout — the jackpot award. This may be three Red 7 symbols or three Wild symbols, but generally is the largest award that a player can receive. (Of course, newer games offer progressive jackpots on numerous awards, not only the highest-paying amounts — we’ll discuss these a bit later.)

In a non-progressive slot game, there must be an amount payable when a player receives a predetermined combination of symbols. The progressive jackpot machine will also pay this amount when the jackpot is awarded. Let’s examine a fictitious game called Blazin’ 7s (which was created in a 2005 CEM article). This game has a top award of 1,000 credits when three credits are wagered. On a 25-cent machine, this translates to a top award of \$250. In the non-progressive game, every time this combination hits, the player is paid \$250. In the progressive game, the player is paid the same \$250, but also an extra amount, which increased as the game was played. The progressive machine has the same base jackpot amount as the non-progressive machine. This is particularly noteworthy for linked progressive jackpots, where many machines contribute to the top award. Let’s examine this progression (or advancement) of the top award amount.

## Jackpot Progression

Once we have determined the base payout amount, as indicated on the PAR sheet, we have our starting jackpot amount. This is always shown on the PAR sheet and will typically be expressed in credits. The progressive jackpot marquee must be set according to the denomination of the machine. A 1,000-credit award on a dollar machine will pay \$1,000. The same award on a nickel machine will pay \$50. The denomination is not important to the machine because the PAR sheet works in credits. The progressive controller simply converts the credit value to dollars. There is actually no reason why you could not have the marquee show the progressive amount in credits; however, this could confuse players, and a dollar amount is easier to understand.

Once the base amount is set, a rate of progression must be determined. This is the amount that will be sent to the progressive jackpot controller for each credit (or coin) wagered on the machine, increasing the top award until it is won. Let’s take one-half of 1 percent from the coin-in and transfer it to the progressive jackpot. This means that for every \$1 wagered, \$0.005 is sent to the progressive controller. The controller will update the marquee and show the increased amount of the progressive jackpot. The percentage that you decide to use is not important to the progressive controller. You simply need to determine how much you wish to allocate to the progressive jackpot and ensure that you’re sending the correct amount.

The progressive contribution rate affects your slot math because every cent that is sent to the progressive controller is really a “win” that has been paid from the slot machine — it just hasn’t been collected by a player yet. For all intents and purposes, we can consider this money paid to the progressive controller rather than directly to a player. Using meters and reports, you can determine the number of credits played and, therefore, the amount of money each machine has contributed to the jackpot. This will not be the same for each machine. While the percentage of total credits-in contributed to the progressive jackpot will be the same, each game will have a different amount of game play or handle. Perhaps the machine at the end of the row is played more frequently than the one in the center. Perhaps one particular theme is more popular than another, and those games are played more than the others. But all we’re concerned about is how much the games are played and how much they contribute to the progressive jackpot.

Players see the increasing jackpot amount as an incentive to play, hoping to win big. This increase depends on a number of factors, specifically the percentage contribution, the denomination of the machine and the number of machines linked to the progressive display. A \$1 machine will have a progressive jackpot amount that increases faster than a penny machine given the same contribution rate and same amount of play. Of course, a dollar machine could have a smaller contribution rate than a penny machine and still increase faster.

When the jackpot is awarded, the current value of the jackpot (as shown on the marquee) is given to the player, the jackpot amount is reset to the base level and the cycle continues. On a stand-alone progressive machine, the progressive jackpot only increases as credits are wagered on that particular machine. This is a common configuration for 3-reel steppers using Bally Technologies’ Blazing Sevens and IGT’s Sizzling Sevens. Typically, there will be a bank of machines, and each one will show a different progressive jackpot amount.

Players will scout out the highest jackpot, thinking it will hit soonest because the machine has been played the longest without a jackpot. This, of course, is not necessarily true. While statistically we can use the PAR sheet to determine the average jackpot amount that will be paid, there will be some variance or volatility due to the random nature of the machines. As you have likely experienced, the highest jackpot amount may continue to increase when smaller jackpots in the same bank hit before the larger one.

Linked progressive jackpots, including large wide-area jackpots, follow the same basic rule. However, the contribution from each machine goes to the shared progressive jackpot amount. This results in larger awards that increase faster than stand-alone progressive jackpots. The top award for each machine must equal the base jackpot amount.

This means that a \$1 million progressive jackpot will have a top award of the \$1 million equivalent in credits. You may think that this jackpot amount would be split among the machines, e.g., a \$10,000 base jackpot would get \$1,000 from each of the 10 machines it is linked to.

This is not correct. If \$1 machines were linked to a jackpot system with a \$1 million base progressive jackpot, each machine would have to have one million credits as the top award on the PAR sheet. The payout for the base portion of the win comes from the individual machine, not the bank as a whole. Any extra amount above the base progressive amount, however, comes from the contributions of all machines played since the last jackpot was awarded.

A linked progressive jackpot system does not necessarily have to have all the same games; you can have different machine themes on the same progressive. The Megabucks jackpot machines in Ontario, for example, use Double Diamond, Triple Diamond and Five Times Pay games. When picking which games to include, we must consider the hit frequency of the jackpot award and the overall payout of the game. The games should have a similar jackpot hit frequency, and the payout amount must match the jackpot base.

This is really an easy equation for slot math. Let’s study the simple bar chart in Figure 2 to see how all this relates. The entire height of the bar represents 100 percent of the money wagered on the machine. We break this amount down into two primary components: hold and theoretical payout. What we don’t pay out, we hold. The two must add up to 100 percent.

Figure 3 expands this slightly, showing the progressive amount as part of the payout. Our hold remains the same: 5 percent. The theoretical payout, however, is broken down into 94 percent in regular awards and 1 percent for the progressive jackpot. We are still paying out 95 percent, and these are the parts that make up that 95 percent.

Figure 4 shows a complete breakdown of the payouts, with every possible payout amount — Blanks, mixed Bars, three Single Bars, etc. Note that all of the amounts paid go to the credit meter, except for the 1 percent progressive contribution and the base jackpot amount. (Remember, this base jackpot amount is what the progressive meter is reset to when a jackpot is hit.)

## Different Denominations

The important points to remember are that each progressive machine must have: (1) the base progressive jackpot amount as its top award and (2) a progressive contribution amount. But what happens if each machine doesn’t award the same base jackpot amount? Could this happen? Yes! And you may wish to do this.

It is possible to have one progressive jackpot linked to machines with different denominations. While this initially sounds complicated, it really isn’t. Suppose we have a progressive jackpot starting at \$1,250. On one side of the casino, we have a bank of 25-cent machines. The base award would be 5,000 credits (\$1,250 / \$.25 = 5,000). On the PAR sheets, we would see that the top award for these machines is 5,000 credits. On the other side of the casino, however, we have a bank of dollar machines connected to the same progressive display. These machines, however, would have a top award of 1,250 credits (\$1,250 / \$1 = 1,250). This way, each machine has the same top award when considering its dollar value. The quarter machine must pay 5,000 credits to award \$1,250; the dollar machine must pay 1,250 credits to award \$1,250. It would be reasonable to assume that the dollar machines would hit the jackpot more frequently than the quarter machines, too. As the machine is paying out a smaller amount for the top award (in this case, one quarter of the amount), it will likely hit more frequently. This encourages players to wager on a higher denomination machine, providing an increased opportunity to win. (You may or may not want to do this, and there are arguments for and against this configuration.)

The jackpot contribution rate could also be smaller on the higher denomination machine. A dollar machine contributing one-quarter of 1 percent of its coin-in would provide the same amount of progression to the jackpot as a 25-cent machine providing 1 percent of its coin-in. This would not necessarily have to be the case, however. If the rates were the same (i.e., 1 percent of coin-in from both machines), the dollar machine would be contributing a larger amount, and a quarter machine-playing winner could benefit from the play on the dollar machines.

## Hidden Jackpots

Progressive contributions do not always go to the standard progressive jackpot. Hidden jackpot amounts are available and can be used for a variety of purposes. A small contribution can be sent to a hidden meter that is transferred to the primary jackpot after it is awarded. This amount increases the base jackpot so it never appears to have just hit. If the jackpot has a cap that specifies the largest amount that can be awarded, contributions after that amount is reached can be sent to a hidden value. In this case, the same contribution amount continues to be taken from each game. Of course, any configuration must be approved by your jurisdictional authority.

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