Slot Players Overestimate House Edge By 4x, Moonbet Study Investigates

What’s the Study About: An Overview

Slot players frequently face a challenge that often goes unnoticed: they systematically misjudge the house edge, believing that the odds are far worse than they actually are. This misperception can subtly influence their play, leading to longer gaps between sessions, higher stress during losing streaks, and suboptimal engagement with promotions.

While many online casinos rely on opaque mechanics and complex bonus systems, the lack of transparency can amplify these misconceptions and inadvertently encourage riskier or more frequent play to “catch up” on perceived losses.

Moonbet’s study investigates how slot players form beliefs based on their wins and losses, and how these beliefs affect their return behavior. Using comprehensive trip-level data and advanced modeling techniques, the study identifies both the behavioral patterns and structural factors that drive misperception.

The goal is not only to quantify the problem but also to explore solutions that correct these misbeliefs while enhancing player experience.

How the Study Captured Slot Player Behavior?

To understand how slot players form beliefs and make return decisions, Moonbet used detailed loyalty-card data from a large U.S. destination casino. The dataset captured every trip, providing a granular view of player behavior over time.

Dataset Overview:

Feature	Details
Number of slot players	28,362
Players with ≥3 trips	13,964
Total trips analyzed	113,752
Median return time	~10 months
Key per-trip variables	Dates, actual losses, theoretical losses, hours played, average bet, promotional credits redeemed, comps, and hotel stays

Key descriptive statistics:

Average hours played per trip: 5.3 (5.9 for ≥3 trips)
Observed hold percentage: 10–12% depending on the sample
Average theoretical loss per trip: $387–$416
Average slot bet: $1.69–$1.95

Modeling Approach:

The study used a hierarchical Bayesian dynamic discrete choice (DDC) learning model to capture how slot players update beliefs about the house advantage based on observed outcomes. Key aspects included:

Belief Updating: Players revise their perception of house edge using a truncated-normal conjugate updating rule.
Forward-Looking Decisions: Players’ return times were modeled as forward-looking choices, reflecting how prior wins and losses influence future play.
Heterogeneity: Individual-level differences in risk sensitivity, cost perception, and responsiveness to promotions were incorporated via hierarchical modeling.

Identification & Estimation:

Variation in experienced hold percentages across players provided a natural source of identification.
MCMC (Markov Chain Monte Carlo) with forward simulation was used to approximate the value function efficiently for a large dataset.
Covariates such as age, distance from the casino, and loyalty tier were used in hierarchical regressions to explain heterogeneity in behavior.

Key Findings: Insights Into How Slot Players React to Wins, Losses, and Misperceptions

The study revealed several important insights into slot player behavior, showing how misperceptions of the house edge and sequences of wins or losses shape engagement.

1. Misperception of House Edge

Average player prior: ~52% perceived house advantage
Actual house edge: ~12%
Overestimation ≈ 4× true edge
Effect: Players with inflated perceptions are less likely to return, reducing session frequency and overall engagement
The findings align with a recent study by the University of Nottingham, which found that many slot players misinterpret RTP figures, resulting in over-confident beliefs about winning odds.” (University of Nottingham, 2025)

2. Outcome-Sequence Effects

Single losing session delays return by ~10 days compared with a win
Three consecutive losses delay the return by ~40 days
Losing streaks have a nonlinear effect, meaning repeated losses impact behavior far more than single losses
Players integrate multiple signals from outcomes rather than reacting only to the most recent session. Studies on ‘losses disguised as wins’ indicate that a lack of transparency in outcomes leads to misperceptions about winning frequency and value. (Myles, 2023)

3. Heterogeneity in Player Response

Roughly 25% of slot players generate nearly all the marketing lift
Remaining 75% are either unresponsive or negatively affected by promotions
Implication: Naive targeting rules (e.g., “don’t market to recent winners”) can reduce long-term engagement and ROI

4. Effectiveness of Belief-Aware Policies

Simulations show that targeting strategies which incorporate players’ posterior beliefs about the house advantage and their uncertainty can:
- Increase revisit rates
- Improve promotional ROI
- Reduce over-promotion and avoid negatively impacting sensitive players
Estimated profitability uplift in counterfactuals: ~20% vs. naïve targeting strategies

Finding	Statistic / Observation	Behavioral Implication
Misperceived house edge	52% vs. 12%	Lower revisit probability, suboptimal play
Single loss effect	+10 days delay	Immediate reduction in engagement
Three losses effect	+40 days delay	Strong nonlinear response to losing streaks
Marketing lift concentration	25% of players	Majority of promotions effective on minority
Belief-aware strategy	+20% long-term profit	Correct targeting improves outcomes

Why These Findings Matter for Slot Players and Operators?

The insights from the study have important implications for both slot players and casino operators. Understanding these patterns helps improve player experience, promote responsible play, and optimize engagement strategies.

Implications for Slot Players:

Correcting Misperceptions: Research by Lucas (2021) found that gamblers are generally unable to perceive differences in house edge, and that industry heuristics may mislead players. Overestimating the house edge can lead to frustration, riskier play, or disengagement. Clear, transparent information helps players make informed decisions.
Awareness of Outcome-Sequences: Recognizing that multiple losses may disproportionately affect return behavior allows players to better manage their sessions and expectations.
Better Control Over Play: Understanding odds and expected outcomes can reduce the impulse to chase losses or make decisions based on perceived “bad luck.”

Implications for Operators:

Targeting Promotions Effectively: A minority of players drive most marketing lift. Identifying this group can increase promotional ROI and avoid wasting resources on unresponsive players.
Avoiding Naïve Loyalty Rules: Simple heuristics like “don’t promote recent winners” may backfire. Operators benefit from strategies that consider players’ beliefs and uncertainty.
Supporting Responsible Gaming: Tracking losing streaks and misperceptions allows operators to implement safeguards, nudges, or educational prompts to reduce harmful behavior.

Behavioral Insights:

Misperceptions are widespread and impactful. Players who overestimate the house edge are less engaged and may misinterpret their session outcomes.
Outcome sequences matter. Losing streaks do not just lower immediate enjoyment, but significantly delay future play.
Heterogeneity is key. Not all players respond the same way, highlighting the need for tailored strategies rather than one-size-fits-all policies.

Why It Matters?

These findings show that structural factors, like misperceived odds and non-linear responses to losses, directly affect both player behavior and operator revenue. Incorporating transparent odds, session tracking, and belief-aware interventions can improve long-term engagement, increase trust, and support safer gambling practices.

How Moonbet’s Transparent On-Chain RTP and EV Displays Correct Misperceptions?

Moonbet addresses the structural and behavioral issues identified in slot player behavior by combining transparency, verifiable odds, and smart contract–based controls. These features help players form accurate beliefs, manage losses, and engage safely.

On-Chain RTP (Return to Player) and Provable Fairness: Moonbet’s slot games target 99.7%+ RTP, significantly reducing house advantage and correcting inflated player beliefs. Every outcome is verifiable on-chain, so players can see exact odds and payouts. Players no longer overestimate the house edge, aligning expectations with reality.
Per-Bet Expected Value (EV) and Volatility Displays: Players can view expected loss per bet, volatility, and payout distribution before playing. This transparency helps players interpret losing streaks rationally, avoiding overreactions like extended session breaks or chasing losses.
Smart-Contract Risk Controls: Automated session limits, variance throttles, and caps are enforced by code, preventing risky escalation. Structural safeguards reduce harmful behaviors without requiring operator discretion.
Transparent Incentives and Minimal Bonus Mechanics: Community house pools and predictable, on-chain rewards replace opaque tiered promotions. Players can see exactly how incentives affect expected value, eliminating hidden net edge increases from complex bonus schemes.
Explorer-Readable Session and Outcome Tracking: Players can review previous outcomes, total bets, and cumulative results in real-time. Increases awareness of losing streaks, helping players manage their engagement and make informed decisions.

Key Takeaways

Slot players often overestimate the house edge and misinterpret losing streaks, affecting engagement and decision-making. Moonbet’s transparent on-chain RTP, per-bet EV displays, and automated safeguards correct these misperceptions, helping players make informed choices. For operators, these features build trust, improve long-term engagement, and support responsible play.

Disclosure: This research was funded by Moonbet, a Solana-based blockchain gaming company committed to transparency and fairness in online gambling. While Moonbet provided financial support for this study, the research design, data collection, analysis, and interpretation of results were conducted independently to ensure objectivity and integrity of the findings.

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