The Hidden Maths Behind Progressive Jackpots and Why It Matters

What are Progressive Jackpots?

As a jackpot game, progressive jackpots offer a large lump sum to be won by one lucky winner. The key difference between a fixed jackpot and a progressive jackpot is that the latter won’t have a set prize fund; this fund will grow each time a player loses a wager in the game, with a percentage of their losses being added to the eventual jackpot fund. This results in jackpot winnings that are much higher in value than what you can win on a traditional slot or even other jackpot games. Popular examples of these games include Microgaming’s Mega Moolah and Playtech’s Age of Gods. Both of these games currently have a jackpot fund of over £200,000.

How Progressive Jackpots Work: The Basic Mechanics

Progressive jackpots start off at a seeded amount, which is a lump sum guaranteed and funded by the casino. This amount is designed to be high enough to make players still want to win the jackpot, even though this will be its lowest amount. Around 2.3%-3% of every wager lost will be added to this seed, which makes the jackpot grow significantly. Mirogaming’s Mega Moolah Mega Jackpot is seeded at £1,000,000, but due to these small percentages of wagers, it has paid out over £20,000,000 previously. The jackpot essentially acts as a communal piggy bank, where a percentage of every player’s wage is added to the bank until someone wins.

The Maths Behind the Jackpot

A game developer will work out whether or not to create a progressive jackpot slot by factoring in the jackpot size, payout structure and the expected value of players. For example, if they select a seed of £10,000 and they take 1% of every £10 bet, they will have doubled the seed size by 100,000 spins. This calculation can help them judge if it’s worth creating the game or if it would take too much from a casino to do so. Exponential growth can also play a part in the progressive jackpot getting significantly larger. The higher the jackpot becomes, the more players it would theoretically appeal to. This would result in a steep incline, where more players are betting more and more to attempt to win the jackpot, whilst growing the jackpot by doing so. This has led to record wins, like Mega Moolah’s huge payout of £13.2 million in 2015.

The House Edge and Payouts

Whilst these payouts can be massive, these jackpots have only grown through a small percentage of wagers, and the casino has received the rest. If we take Mega Moolah’s record jackpot of £13.2 million, and say that that was earned through the game adding 5% of bets to its prize pool, with a seeded amount of £2,000,000 and an average bet of only £2. This would make 5% of all the bets £11,200,000, and if we say all these bets are £2, that would mean the total of all the bets was £224,000,000 in value, with 95% of this going to the casino. This percentage can be seen as a house edge.

A progressive jackpot will typically have a lower Return To Player (RTP) percentage than traditional slot-based games. This means that theoretically, the chance of winning a progressive jackpot is lower than winning through playing a traditional slot game. However, progressive jackpots offer huge payouts, far bigger than what you would earn from playing slots. RTP for a progressive jackpot game is difficult to calculate properly. Due to their infrequent payouts, it may be close to impossible for players to make decisions based on RTP. Instead, players can inspect how frequently the jackpot is won and how often the jackpot pays out. This can determine the trustworthiness of a jackpot slot, too. If the jackpot has never been won and has been going on for years, it’s probably not worth taking a chance on it.

Why Progressive Jackpots Matter

A huge jackpot, the size of which only progressive Jackpots can offer, has an effect on players psychologically that casinos will find very appealing. The sections below take into account both the player’s impact and the casino’s perspective.

Player Impact

A huge, seemingly ever-increasing figure from a progressive jackpot will attract players to the game. This is because a spike in a mathematical growth pattern will seem more appealing to players due to the increase in numbers and, therefore, be seen as an increase in value. However, players should avoid chasing huge wins as these results are completely random, and you are not guaranteed to receive any winnings at all. We recommend setting limits for yourself so that you still gamble responsibly.

Casino Perspective

This player’s appeal drives a lot of engagement to casinos, increasing their revenue. They are still able to stay in business and even profit from these large payouts due to the jackpot only being a fraction of a losing player’s wagering, with the rest going into the casino. Wagering requirements can also ensure that they won’t lose any money.

Online casinos utilise a digital system that allows them to perform complex progressive calculations incredibly easily and quickly. This is achieved due to real-time mathematical rate adjustments made by the digital system based on a complex algorithm.

Popular Progressive Jackpot Wins

The biggest progressive jackpot payout in history was won by Jon Heywood in 2015. He won a jackpot of £13,209,300 on Microgaming’s Mega Moolah. This was named the largest jackpot payout in an online slot machine game, and the record still stands to this day. A year after this, a player set the record for the largest mobile slot jackpot win in the UK, winning a total of £4.5 million. The anonymous winner only wagered £4 and received this monumental amount of money. As these were both life-changing amounts of money, players then responded by playing more regularly at online casinos, in the attempt to strike the same luck as these two lucky winners.