I used to design hardware for slot machines some years ago. It's my understanding that what you describe is illegal in all the jurisdictions I know of (adjusting the payouts to meet a certain ratio as the game goes on). The odds for each individual play are fixed which sets the payout ratio by averaging over time.
The heart of the game is a big random number generator. There are many more possible outcomes than can be represented by the numbers/symbols on the reels. There is a mapping between the random numbers and what the payouts are, this sets the odds. After the next random number is determined, the machine decides what it wants to show on the reels. Usually it likes to show some kind of near miss to keep up player interest. There are other algorithm adjustments you can make to make a machine make frequent small payouts, or occasional big payouts.
When I was working on stuff, there was a place called GLI (Gaming Labs Inc I think) where you submitted your games for testing. Usually the state gaming commissions would accept GLI testing as proof (or at least partial proof) that your machine was okay. Sort of a underwriters labs for gaming.
I really doubt the casino is trying to rip them off. This is horrible publicity for them. They are usually very happy to pay if the claim is legit - they know it just adds to the draw, and they'll get the money back from you