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Essentially, the looser the slot machine, the more money it returns to the player. That said, a loose slot doesn't mean the player has any additional advantage over the house. The casino still has an edge on your play, but looser slots offer better returns.
The answer is yes, the casinos most certainly can change the payout schedules on slot machines at their convenience or, as you say, on demand. But there is some effort involved. With server-based slots (SBS), slot managers could change a slot machine's hold percentage remotely via software with some keystrokes.