The Key Master arcade and casino machine is becoming very popular as of April 2013, being found in casinos, movie theaters, bowling alleys, and even on cruise ships such as the entire Carnival and NCL cruise fleet.
Movie theaters with the key master are reporting over $900 per week as reported here
The odds of winning are dependent on two machine settings that make the game rigged.
The first setting is called the compulsory upper deviation, where a vertical displacement is added to the key. The default upper deviation is 1.6 mm, and the maximum possible is 3.6 mm.
The second way the key master or vault is rigged is through a payout rate setting. The default is 1 payout per 700 credits
, although it can be set to 1 payout per 9999 maximum.
Each of the 3 rows can have a different payout rate, but at the 1 payout per 700 credits, this means that the prize HAS to be worth more than $700 to make it favorable to play.
If the prize is a $500 iPad, and assuming the payout ratio is 1 to 1500 credits, for every dollar you put in, your expected payout is $1*500/1500 = $0.33
For the Namco BarBer Cut Lite, a machine similar to the Sega Key Master, for a 28.5% payout with $100 mix and $1 game fee (default), a prize should be dispensed after 350 plays.
For this same Namco, For a 12.5% payout with $100 mix and $1 game fee (default), a prize should be dispensed after 800 plays.
These figures are all from the Namco manual
You can see all the operator manipulation and see more technical details (see how rigged the machine is) here
Tips and tricks to win the Key Master Game
The best tip is to simply not play, because the game is rigged. But if you must, make sure nobody has won any prizes for a long time before you try playing. Also going for the lower two levels is a safer bet since the payout rate is higher.