The payback % setting is the actual setting on a slot machine of what that programmed payback % return to the player should be on that machine. Manufacturers provide casinos with 6-7 choices, greatly depending on the location of the casino (jurisdiction). The payback % tells the machine what to do with the random number that is being generated with each spin. Essentially, what symbols should be displayed to the user. These are called virtual reels. It’s important that you understand that the payback % setting on a machine is a very long term event meaning it will take 10,000,000 spins before the theoretical payback % number evens out. This means that in the short term, you will not be able to discern the difference between a machine set at 85% and one set at 98%. In fact, a machine set at 85% can pay more during a short term visit. 

See this video for an experiment we did to prove this: