Because slot payouts are mandated by number of spins if the place is hoopin then moire spins are being played which increases the number of jackpots that will hit. If the machine has to give out one Max Jackpot for every thousand spins - for example - then 100 people spinning will reach the 1000 spin "magic number" much faster than one.

The downside, aside from the crowding and all is that is it is that way for each game (say Gone Fishin, a fav of mine) and the casino has 100 Gone Fishin machines - you have to be at the right one. State gaming regulations vary. Some states they can link all the machines to one payout schedule and some it is per individual machine. Also of note - Tribal Gaming operations are frequently subject to different regulations so knowing a bit about what is required in the state you are playing in helps a lot.