Green’s Dictionary of Slang

(US carnival) any carnival sideshow that is rigged in favour of the player, but which charges a fee per play that exceeds the value of the prizes won .

1953		F. Brown Madball (2019) 10: Down the row of hanky panks—the string game, the fish pond, the fortune wheel, the milk bottle game.
2012		W. Keyser ‘Carny Lingo’ in http://goodmagic.com 🌐 Hanky-Pank — A game where every player wins a prize every time. The charge per play more than equals the cost of the prize, so an agent can lose all day and still make a profit.