Yes, online casinos do actually payout. Legal online casino apps and sites take the extra steps to ensure that all the available games are tested and audited for fairness so that every player stands an equal chance of winning.
In general, it's best to pick the machines with the highest payouts. Search online to find specific machines that are known to have a high RTP ( return to player ). Pay attention to volatility, too. Low volatility slots have a higher chance of winning, but high volatility machines usually offer a bigger payout.