Class II vs Class III slots

Home Slots for Real Money Class II vs Class III slots

Not all slot machines are the same!

Slots are the most easily recognized game in any casino in the United States. Come to think of it, if you’ve ever visited a brick-and -mortar establishment, or perhaps played online, well there is a good chance you’ve played slots.

Slots has so much popularity, especially in the United States, that you can find them almost anywhere. You can find slots in casinos, at airports, hotels and even in local bars.

However, winning in slots isn’t as simple as it seems. You may think it is simply pressing buttons and pulling levers, then sitting back and relaxing. For most places around the world it ,is just that and you may think that there is no other aspect or logic to consider because each slot machine is programmed the same, each slot machine holds the same odds of winning.

But this is NOT TRUE because not all slot machines are programmed the same!

Behind the scenes there are in fact two types of slot machines.

Class II and Class III slot machines have different logic

Slot machines in the US are in fact categorized into two classes, Class II and Class III. These two classes have requirements to be met by law in the US, and therefore inherently the logic is different for them. Before we delve into the logic, we provide the context.

Origins of Class II and Class III slot machines

Back in the early 1900’s Native Americans were socially and financially disadvantaged in comparison to “mainstream” America. Also during this era, part of the native American culture was to gamble, whether it be with archery or various other social games. Yet, these activities were considered illegal at the time.

In recognizing the previous two points raised, the Federal Government defined in legislation Native American land title with subsequent debate following as to whether and how to legalize gambling.

Obviously, the responses varied from State to State. There were some States which were conservative and opposed gambling because they believed it to be morally wrong. Others also opposed it, because of the fear of competition to their mainstream casinos.

While at the other end, some States were more liberal and wanted gaming to be allowed. They also wanted the gaming revenue to be tax-free (or at concession) and saw this as an avenue that could benefit the Native American community.

In conclusion to the debate, an agreement was made to legalize gambling activity in 1988 on Native American land. A federal law was passed in 1988 by Congress called the Indian Gaming Regulatory Act (IGRA).

The Act categorized gaming into three classes:

Class I Gaming: Defined as gaming associated with social card games or tribal ceremonies. In essence,  class I is for charity, non-profit and cultural. The intention is not for profit, but the essence is more about the social purpose. An example is the Peach Stone Game which is popular amongst the Iroquois tribe.

Class II Gaming: Commonly known as Bingo (whether it is electronic, technological or in a computer) and if played in the same area as bingo other games such as punch boards, tip jars, instant bingo and all other similar games.

Class III Gaming: Originally the Las Vegas style of gambling. Such as table games, like roulette, craps and blackjack and slot machines. Basically anything that does not fall into Class II falls into the category of Class III.

These Classes were formed in order to restrict Class III gaming. But allow Class II (and Class I)! Why? Because games that are bingo in nature were deemed to be less immoral than Class III. The origins of bingo have a social aspect to it, which is less about profit making and winnings but rather group entertainment.

With this in mind that Class II machines were more unrestricted in use. Knowing this, Native American casino operators began to think of ways of creating gaming machines that met the requirements of Class II but looked and appeared to be in the Las Vegas style of gaming!

So you guessed it! This led to an innovation phase whereby software engineers, hardware experts, game designers would be employed to think of new ways of gaming, but keep to the requirements of Class II which is bingo based.

The most obvious game to therefore to adapt is slots! Thus games that appeared to be slots were in fact, fast high tech electronic bingo machines.

In summary, the Native American casino operators in jurisdictions that were required to adhere to the IGRA were attempting to create slot machines that met the bingo requirements of Class II.

So What Exactly are Class II Slot Machines?

As discussed in the previous section, the creation of Class II and Class III classification began an innovation phase of Class II slot machines. These machines were developed to meet the requirements of fulfilling the logic of bingo.

So what is bingo logic?

In summary, bingo logic is a cohort of players each with a different given predetermined outcome of what numbers will be drawn from a pool. If a player has the outcome of the numbers drawn then that player wins. No player would have been given the same outcome as another player, so there can only be one winner each time.

Class II slot machines is therefore a faster high speed automated version of bingo. When a player plays a Class II slot machine the display of bingo games is being run at the background. When hitting the spin button, the player is being pooled with many other players who have also hit the spin button and each player is given a predetermined bingo outcome.

Bingo games require a minimum of two players but their maximum is unlimited. Although different manufacturers may design their Bingo slot machine in a slightly different way, they’ll always have to cater for multiple players attempting to match certain card patterns in comparison to the numbers called.

So you could say that Class II slot machines aren’t REALLY slot machines at all. They just appear to look like one but really are electronic bingo games.

The importance of knowing Class II and Class III

You may be thinking at this point in time “Ok, so what if there are Class II and Class III slot machines. What’s the big deal?”

The importance is that the odds are different between the two classes AND there are different regulatory requirements for Class II and Class III compliance!

The Odds are Different

Let’s begin with defining again how the game of bingo operates. You have a pool of players, each given a predetermined potential outcome, and number are selected out of a pool to arrive at an outcome. Should a player have the outcome then he or she is the winner.

Essentially this logic is the same as a lottery (the term Video Lottery Terminal is also used to describe Class II machines, however most casinos would prefer to use the term slots). And this is the logic that is used for Class II.

Now let’s define how a slot machine or jackpot machine operates. A typical slot machine uses Random Number Generators (RNG) machine logic to “spin” the reels in order to arrive at an outcome. The outcome then determines if the player has won or not. This is the logic that is used for Class III.

In theory the odds are worse in a Class II slot machine than in a Class III slot machine. Consider the chances of winning Powerball or MegaMillions, two of the most popular lotteries in the US.

The chances of winning are extremely low simply because the pool of numbers is large and the permutations and combinations is therefore into the zillion squillions. (yes, I made up that word!)

Now consider the spinning of reels the number of combinations. But remember, in Class III you are not limited to having a unique outcome for each player unlike Class II. You therefore have a better chance at Class III than at Class II slot machines.

The Compliance is Different

In supporting why I believe the odds are worse in Class II machines than in Class III machine, you need to understand the difference in compliance.

Class II slot machines are self regulated by the Native American tribes that own and operate the casinos on their land title. In other words, the tribes themselves get to determine if they have breached the Class II Act (or not have breached).

As history shows (and you would be naive to think otherwise) self regulation in any industry simply does not work. There is a conflict of interest between profit making and maintaining ethics. And what will always occur, is the profit making aspect will trump the maintenance of ethics.

Class III slots machines however are not self regulated, but are verified through thorough testing by third-party and government organizations. Testing is conducted to provide players assurance of their randomness and reliability.

The same testing is (supposedly) also performed by Native American casino operators, however there is less transparency for these testing results than for Class II.

More Class II machines than Class III

As a result you will find at Native American casinos that must adhere to the IGRA, the presence of Class II machines will be more than Class III machines.

Therefore it is in my opinion that the profitability of Class II machines exceeds that of Class III, hence the preference of Class II.

Also, casinos that provide for Class II machines do not have to pay tax on revenue generated as opposed to Class III machines.

How to tell the difference between a Class II and Class III slot machine

On first appearance the two types of Classes look the same, however you will notice that for Class II machines there is an additional small window, which actually displays the bingo patterns. When you see these windows on the slot machine, you can then tell that they are Class II machines as opposed to real slot Class III machines.

Here’s an example of a Class II machine with a bingo table at the top left:

Here’s another example of a Class II slot machine but this time the bingo table is in the top middle of the display

The typical Class III machine will not have any bingo table and will look more like this:

The decline of Class II slot machines

As you may be aware the currently law regarding gaming online and at casinos is changing, becoming more and more liberal. Demonstrated by the move to online sports betting and table games, seen in the US states of New Jersey, Pennsylvania, Connecticut, Nevada and Delaware. This means that innovation in Class II machines with a bingo logic is no longer necessary.

But Class II slot machines are still very much abundant! Albeit it’s slowly being phased out. You can still find such games in slot parlors (like racing track games) or at a Native American casinos.

Frequently Asked Questions

Appendix

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