A progressive jackpot is a jackpot (a
gambling
Gambling (also known as betting or gaming) is the wagering of something of Value (economics), value ("the stakes") on a Event (probability theory), random event with the intent of winning something else of value, where instances of strategy (ga ...
grand prize or payout) which increases each time the game is played but the jackpot is ''not'' won. When the progressive jackpot is won, the jackpot for the next play is reset to a predetermined value, and resumes increasing under the same rule.
Many
slot machine
A slot machine (American English), fruit machine (British English) or poker machine ( Australian English and New Zealand English) is a gambling machine that creates a game of chance for its customers. Slot machines are also known pejoratively ...
s and
video poker machines feature a progressive jackpot. The jackpot increases by a small predetermined amount each time the game is played. Often multiple machines are pooled or linked together to form a larger progressive jackpot which grows more quickly because more non-winning plays can be counted toward it.
Many
lotteries feature progressive jackpots. After each drawing in which the jackpot is not won, a large amount of money is "carried forward" to the jackpot for next drawing.
History
Progressive jackpots were first introduced in large casinos in 1986. The first progressive slot machine was the famous Megabucks, developed by International Game Technology (IGT). Every time a player participated in the jackpot but did not hit it, a part of the winnings was accumulated to the main jackpot, growing without limit. On February 1, 1987, a player won the first progressive jackpot, which amounted to the incredible sum of $4,988,842.17.
Progressive jackpot meter
The amount of the jackpot increases by a small amount for every play on any connected machine. The amount by which the jackpot advances is set by the
casino
A casino is a facility for certain types of gambling. Casinos are often built near or combined with hotels, resorts, restaurants, retail shopping, cruise ships, and other tourist attractions. Some casinos are also known for hosting live enterta ...
("the house"). A machine offering a progressive jackpot usually displays the amount of the jackpot, rather boldly, to attract players. After a player wins the jackpot, the jackpot resets to a preset minimum level.
For example, on a machine whose house edge is 5%, a generous jackpot contribution might be 1% (one fifth of the expected profit). The house is prepared to contribute some of the profit of a jackpot linked machine because players are attracted by the:
*relative novelty of progressive jackpots (generally, only a small fraction of the house's gaming machines will be connected to a progressive jackpot)
*constantly changing meter, often displayed on large
LCD
A liquid-crystal display (LCD) is a flat-panel display or other electronically modulated optical device that uses the light-modulating properties of liquid crystals combined with polarizers. Liquid crystals do not emit light directly but in ...
or
LED displays
*large amount of the jackpot, which eventually motivates more players to play the game.
Qualifying
Usually the progressive jackpot is only offered to players who wager the maximum number of credits per play. All wagers, whether or not they are maximum-credit bets, contribute to the jackpot. As a result, a game which requires a 10-credit wager to qualify for the progressive jackpot tends to have its progressive jackpot rise to higher levels (relative to its break-even level) than a game that requires only a 5-credit wager to qualify.
Usually the jackpot can only be won by winning the combination with the highest payoff, e.g. a royal flush at a video poker game, or five of the most valuable symbols (lemons, cherries, alligators, etc.) on a slot machine.
Often, the displayed amount of such jackpots includes a base payout which is often simply the regular payout for the winning combination multiplied by the minimum qualifying bet. If the jackpot is "reset" to this amount each time it is won then in essence the house is not providing any "seed money" for the jackpot since the minimum that can be won in such a case would simply be the amount the player would normally be awarded for the jackpot-winning combination.
"Mystery" or "must-hit-by" jackpots
A variation of the standard progressive jackpot is the "must-hit-by" jackpot, which has substantial differences compared to traditional jackpots.
The value of every "must-hit-by" jackpot is determined immediately after the preceding jackpot is won by a
random number generator
Random number generation is a process by which, often by means of a random number generator (RNG), a sequence of numbers or symbols that cannot be reasonably predicted better than by random chance is generated. This means that the particular outc ...
and stored within an encrypted computer connected to a gaming machine (or, more commonly, a network of machines) and is publicly disclosed to be within a certain range (for example, a small jackpot might be programmed to pay out at between $1,000 and $3,000). The jackpot pays on the wager that causes the jackpot to reach or exceed the threshold, with the maximum value within this range being the "must-hit-by" amount.
Often such jackpots encompass a variety of games, with each game contributing a small percentage of wagers to the jackpot. Thus, these jackpots are often billed as "mystery jackpots" since the conditions that cause them to be paid do not depend on achieving any specific result in the main game. Furthermore, it is not usually necessary to bet the maximum amount possible (or, often, to even bet any minimal amount above the minimum wager allowed by the software) in order to win a "mystery jackpot" - although since it is a percentage of each wager that goes into the jackpot the odds of winning on a particular spin are usually in proportion to the amount of the bet. Or, to put it another way, one spin for twenty dollars would have the same odds of winning the mystery jackpot as twenty spins for one dollar each would, and also the same odds of winning the jackpot as would four hundred spins for five cents each.
Often, such games have several "mystery jackpots" that usually differ by at least an
order of magnitude
An order of magnitude is an approximation of the logarithm of a value relative to some contextually understood reference value, usually 10, interpreted as the base of the logarithm and the representative of values of magnitude one. Logarithmic di ...
both in terms of magnitude and frequency of payout, which can ensure that jackpots are seen to be won frequently (often, many times per day in the case of relatively small jackpots). One variation of this scheme (most often used by gaming corporations serving brick-and-mortar establishments over a large geographic footprint) is to have one main jackpot, several intermediate jackpots paid at the regional level, smaller jackpots paid at the site level and/or the smallest jackpots tied to each individual machine.
From the house perspective, a key financial consideration of such jackpots is that the portion of players' wagers directed to the jackpot are, in essence, only funding the portion of the jackpot within its specified "range." The gaming operator needs to fund each jackpot's minimum amount from the house edge of the main game, which is usually at least a third of the "must-hit-by" amount especially in games with multiple jackpots as this creates an assurance that each jackpot will always be several times the value of the jackpot "below" it. If the random number generator gives each value within the jackpot "range" an equal chance of being the "winning" value then under these conditions "seed money" from the house would likely account for over half of the jackpot's total funding, for which the house would presumably need to compensate by increasing the house edge of the main game.
To counteract this issue and increase the average amount wagered before each jackpot is won, the mathematical formula used to calculate each jackpot is often skewed in such a way that makes it likely the actual average and median jackpots will be well above the average of the published minimum and maximum values. A simple example formula that would achieve this (expanding on the aforementioned example) would be simply to calculate the jackpot as being $1,000 plus the square root of a random number between zero and four million, which would result in a 75% probability of each jackpot being between $2,000 and $
50,000 and a 25% probability of a jackpot being between $1,000 and $2,000.
Break-even point
In some games such as
video poker,
blackjack, or
Caribbean Stud Poker, it is possible to compute an optimal playing strategy based on the average payoff (the amount of payoff times the chance of payoff). Because the jackpot of a progressive game constantly grows, it sometimes exceeds the break-even point for players, such that the jackpot wager becomes a "positive expectation bet" for the player, with an average
return to player
Return may refer to:
In business, economics, and finance
* Return on investment (ROI), the financial gain after an expense.
* Rate of return, the financial term for the profit or loss derived from an investment
* Tax return, a blank document o ...
(RTP) of greater than 100%. When the progressive jackpot is less than the break-even point, there is a negative expected value (house edge) for all players.
In the long run, with optimal strategy, a player can profit by only playing progressive games when their jackpots are above the break-even point, although the "long run" can be quite long, tens of thousands of plays.
The break-even point cannot be easily calculated on a slot machine game, because the payback percentage for the game is normally unknown to the player. The break-even point in poker-based games can be calculated because the payback percentage for the game is a function of the paybacks and odds of the poker hands, which is based on a standard 52-card deck. The return of a slot machine is based on the published paytable, but also on the normally unpublished reels. For a five-reel slot machine, the player would need to know each symbol on each of the slot machine's five reels in order to calculate the odds. For a three-reel slot, the reels are normally weighted, and this would not be possible. However, in some circumstances the manufacturer may publish the payout of their machines.
Many
online casino
Online casinos, also known as virtual casinos or Internet casinos, are online versions of traditional ("brick and mortar") casinos. Online casinos enable gamblers to play and wager on casino games through the Internet. It is a prolific form of ...
s allow the same game to be played in multiple currencies, in which case the break-even point and average return to player can change depending on the player's currency choice. This is because the jackpot amount may be converted between currencies so that the same amount is paid out to the winner no matter their currency choice, but the wager required to qualify for the jackpot is not. For example, consider a game that pays a $1000 / €900 / £700 jackpot, but requires a fixed $1 / €1 / £1 wager to qualify for the jackpot. In such cases, it is beneficial for the player to play in dollars, as the qualifying wager is a smaller proportion of the jackpot. Thus the break-even point will always be lower and the return to player will always be higher while betting dollars.
Advantage play
, who only play when the progressive jackpot provides them with a positive expectation situation, still generate revenue for the casino. Even though the player has an advantage over the house, the casino still profits from each play, because the bulk of the progressive jackpot has been pre-paid by the prior non-winning players.
Advantage gamblers sometimes organize teams of players to play machines where the progressive jackpots generate a positive expectation situation. Such teams often displace ordinary players, making the machines unavailable just when they are the most attractive to gamblers generally. Team members often have cell phones and work in shifts, calling a teammate to replace them when they're ready for a break. Some casinos have a policy of "no team play", and will eject players suspected of playing on such teams. Such tactics do not work at
online casino
Online casinos, also known as virtual casinos or Internet casinos, are online versions of traditional ("brick and mortar") casinos. Online casinos enable gamblers to play and wager on casino games through the Internet. It is a prolific form of ...
s because there are effectively an unlimited number of duplicate machines for players to play at, so the game cannot be monopolised by one player or small group.
Player's clubs
Most casinos offer slot clubs, which pay back a percentage of a gambler's wagers on their games in the form of cash rebates or other perks with a monetary value. Participating in a slot club can reduce the break-even point of a progressive jackpot game because of the value of the rebate on each wager.
Other jackpot games
Progressive jackpots are not limited to slot machines and video poker.
Poker
Poker is a family of comparing card games in which players wager over which hand is best according to that specific game's rules. It is played worldwide, however in some places the rules may vary. While the earliest known form of the game w ...
games sometimes include a progressive
bad beat jackpot.
Caribbean stud poker is another
casino game
Games available in most casinos are commonly called casino games. In a casino game, the players gamble cash or casino chips on various possible random outcomes or combinations of outcomes. Casino games are also available in online casinos, wh ...
which often has a progressive jackpot available, and some
online casino
Online casinos, also known as virtual casinos or Internet casinos, are online versions of traditional ("brick and mortar") casinos. Online casinos enable gamblers to play and wager on casino games through the Internet. It is a prolific form of ...
s offer progressive versions of
blackjack,
roulette
Roulette is a casino game named after the French word meaning ''little wheel'' which was likely developed from the Italian game Biribi''.'' In the game, a player may choose to place a bet on a single number, various groupings of numbers, the ...
, and other casino games. Many
lotteries feature progressive jackpots.
Progressive blackjack
A progressive blackjack game usually does not differ from conventional
blackjack, apart from the addition of an optional side bet which gives the player a chance to win a progressive jackpot. The side bet wins if the player is dealt one of several specific card combinations such as four suited aces. The awards can range from several dollars up to 100% of the jackpot depending on the different card combinations, and the winning hand paytable can differ between casinos.
References
{{DEFAULTSORT:Progressive Jackpot
Gambling terminology
Slot machines
Video poker