No one — well, hopefully no one — has ever looked at a slot machine and said, “Now that’s a fine place to invest my money for a solid rate of return.”
Yet slot machines — and this is not quite #breakingnews — can be a fun way to pass a little time, maybe win a few bucks, maybe take down a jackpot.
Of course, the -EV keeps plenty of discerning gamblers (and non-gamblers) far away from the aptly named one-armed bandits. And no matter what the payout percentage is on any given machine, all of them are built to do one thing and one thing only, and that’s take your money over the long haul.
Casino operators know this, of course, and are especially aware of it due to the fact casinos make upward of 80% of their gaming revenue via slots, according to a series of UNLV Center for Gaming Research studies.
But it’s a more recent study — The House Edge And Play Time: Do Industry Heuristics Fairly Describe This Relationship, co-authored by Anthony Lucas and A.K. Singh and published in the UNLV Gaming Research & Review Journal — that caught my eye and, undoubtedly, the eyes of casino executives around the globe.
One would think a slot player would be generally aware of how much money they are putting into the machines vs. how much money they are getting back. The research, however, shows that is not the case.
By and large, slot players don’t care if they’re getting back 95% of their slot-playing dollar or 80% of their slot-playing dollar. In fact, it doesn’t matter what the percentage is. People who play slots will continue to (metaphorically) stick those quarters in, one after another.
Upshot? Casinos are leaving money on the floor.
Taking our money
According to the study, the long-standing belief in the casino industry is that the higher the casino’s take on an individual slot machine, the less time a gambler will engage with that slot machine.
In short: A slot player is believed to spend twice as much time with a slot that pays out 95% vs. one that pays out at a 90% rate.
Lucas and Singh’s research, however, flips that on its head.
“The findings spotlighted considerable limitations of popular industry heuristics related to the relationship between par and play time,” they wrote. “While additional studies are warranted, the outcomes suggested that operators may be overly mindful of the fallout from increased pars. These overbroad beliefs are likely to impede critical progress toward revenue optimization.”
In English: Casinos can do whatever they want with the slot machines and lowering the payout will not result in players playing less, but will result in casinos winning more.
A slot machine from 1937… pic.twitter.com/QRAWEm55rm
— NULL ⣢ (@0xUID) November 6, 2021
“If individual players don’t see results from their play that allow them to detect differences in the house edge there is an opportunity for gaming operators to keep a greater portion of the wagers,” Lucas said in a press release announcing the results of the study. “Even subtle changes in the frequency of big jackpots can make important contributions to the overall slot revenue.”
Now obviously, I don’t discourage casinos from making money, but the whole idea of futzing around with payouts in order to do so is kinda yuck.
And that’s really the worst part about the slot experience — the opaque, bordering on blacked-out, nature of the payout percentage.
Educate instead of obfuscate
Do you play slots? I dabble online, I’m sad to say. I’m exactly the customer they’re looking for, as well: disposable income dude with poor self-control. Truth be told, I live in New Jersey and have had access to online slots since 2013, but for years never once thought to touch them — that is, until PASPA was repealed and I started betting on sports. All of a sudden, the sportsbook app is tied to the casino and here’s five bucks, kid, come on in the casino, and next thing you know I’m hitting the slots now and again.
At least online some of the slots let you know what the expected payouts are. They don’t advertise it, and you have to click through 15.8* screens to get there (*or at least it feels like it), but it’s there. At least for some games. Astro Cat from Lightning Box pays 95.44%. Clue Cash Mystery by SG Digital is even better, at 96.5%. But then there’s seemingly every IGT slot I looked at, which tell you there is an “expected payback” but don’t tell you what it is. That is …unhelpful.
NEW SLOT! Love cats? Play the new Astro Cats slots near the parking entrance! 🐱🐈 pic.twitter.com/QYVhsjHJ15
— Rivers Casino Pittsburgh (@WinBigRivers) September 13, 2019
Well, I have a modest proposal for the slot industry, both for in-person and online variations. Be better, catch up with the times, and tell people up front what the expected payback is. Educate your customers, in other words. Feature some games with 98%+ payback but smaller big wins, feature games with less than 90% payback but with big jackpots, mix and match, but tell us ahead of time what we can expect. Advertise it.
My prediction? You wouldn’t lose any slot players who currently play. After all, no one is silly enough to think they have an advantage over the house — and I’d be willing to bet you’d pick up more casual players like myself. I can stomach mild -EV for a little enjoyment, but I have a much tougher time stomaching unknown -EV.
I say this based on my own experience: I’ve yet to play a slot without first trying to figure out what the payout is. It’s my nature, as a sports bettor, a DFS player. Unlike Han Solo, I want to know the odds.
Furthermore, it’s an open secret that where it’s legal, America’s sportsbooks are openly courting America’s sports bettors to become America’s casino gamblers. Give us a little information, stop treating us like rubes, and I’m willing to bet — pun very much intended — that you’ll gain more customers.
At the very least, that’s a study I’d like to see.