I’m a semi-frequent visitor to Vegas, and I will tell you what the assumptions are about some of the simpler question among people who spend quite a bit of time playing slots and video poker and therefore care and do at least some research of their own:
[ul]
[li]The casinos comply with Nevada law because they make enough now without cheating and can make more than they do now still without cheating[/li][li]The theoretical payback % for a given machine must be the same for every player[/li][li]If they want to change the payback % on a machine they must take it out of service first, primarily because the cabinet has to be opened. But in any case, they are not currently allowed to do it on the fly due to time of day, day of week, special weekend, or specific player, etc.[/li][li]When the payback % is altered it is done individually by machine, via software update on newer machines and hardware update on some older machines (which means they probably never bother with older machines, they just leave them alone or get rid of them)[/li][li]The capability exists or will exist, for software updates to be deliverable over network instead of physically opening the machine to do it. This potentially will throw a monkey wrench into the concept of not being able to alter the payback % on the fly.[/li][li]If the rules regarding how and when payback % can be altered change, it will become known to players quickly, not by anecdote (ie. playing and noticing) but by public reportage. If Venetian/Palazzo were to stick with its current method of awarding points, and started changing payback % on the fly based on time of day or day of week, for example, this information would be easily detectable and disseminated quickly by players[/li][/ul]
In terms of competition and payback % rigging, the casino business is incestuous like a lot of other businesses are, so it is suspected that casinos generally have a pretty good idea of what their competitors are paying out, non-compete and other confidentiality provisions notwithstanding. In addition, a few years ago, the Venetian/Palazzo complex went to a system where they award players club points based on theoretical hold instead of coin-in like everybody else. So you can go play there and determine the exact payback percentage of any slot machine, assuming that the way they have stated their policy is 100% accurate. Put your card in, run $100 through, take your card out, stick it back in and see how many points you earned in the previous session, this allows you to calculate the payback %. There’s no reason why every strip casino couldn’t have an employee go to Venetian/Palazzo and do that every week if they wanted to.
Casinos primarily compete for players by using comps and other incentives like table games rules. Payback % on slot machines is a negligible part of that because the overwhelming majority of players don’t care and the ones who do care can’t know (with the exception of Venetian/Palazzo). The sentiment among even experienced players is that they don’t care much about “a point (meaning a basis point) here or there,” even if in relative terms, that could be meaningful (ie. a 10% hold is 11% greater than a 9% hold).
One reason table games hold is much higher than the house edge is because people bust out having sustained a loss well in excess of the house edge. Way fewer people leave a table ahead by the same margin. Most people do not bankroll themselves property to be able to stay in the game long enough to recover from an extended period of bad variance.