[Editor's Note: We forwarded this question to one of our slot experts, John Robison, author of The Slot Expert's Guide to Playing the Slots. Here's his response.]
I believe the reason the progressive is capped is to prevent the machine from going positive. In other words, your Red, White & Blue machines is not allowed to exceed a 100% return to the player. We can't know for sure the exact number at which the machine goes positive, though it's probably right around $300,000, if that's where the progressive meter stops rising.
Some gambling jurisdictions prohibit positive-expectation machines. That ban could include letting a progressive jackpot go temporarily positive -- if it's not hit before it reaches that 100% return.
As for casino greed, some states require that the amount of money that would have gone into the jackpot if it hadn't been capped has to be added to the progressive when it resets. This is only fair; after all, it's the players' money. I tried to find Nevada's regulation, but I couldn't locate anything online.
However, we do know that Nevada is strict about progressives. Westgate just got rid of some of its progressive slots and had to move the player-funded portions of the jackpots to other progressive machines. So I would think Nevada has the same requirement as the other states.
