Archive » June 18, 2009

 

Eighty to 85 percent of the profits in any gambling casino come from slot machines. They have sometimes been called the “crack cocaine” of the poor and uninformed. The machines are always colorful and provide visual and sound stimulation to the players

More importantly to the casino, they provide a hope or expectation that the player can win something while they are being amused by spinning wheels or flashing screens.

There is often a promise of a big jackpot, perhaps a progressive one of four-to-six figures in size, and the face of the machines are covered with all the various winning combinations available.

That is because the psychology of slot machines is that they are designed to create a feeling of winning while over time the player keeps losing.

Take, for example, a so-called 25-cent machine. Seems cheap enough, doesn’t it? The first thing a player realizes is that to win any significant “jackpot,” one must play three quarters, or 75 cents. The modern versions of these devices have the ability to accept bills and any winnings are printed out and taken to either a cashier or another machine for redemption. The elimination of cash and coin handling was a big benefit to the casinos because that eliminated many jobs, and labor is probably 75 percent of the cost of doing business.

Back to the 25-cent machine that is really at least a 75-cent machine. (Some variations allow the play of eight to 10 quarters at a time.) A bill is fed into the slot and the corresponding “credits” are recorded on the machine in a few seconds, often with a musical sound. Although one 25-cent credit can be played, the most potential winning amounts require playing the maximum credits.

A push of a button (or pull of the handle) causes the wheels to spin from between four to five seconds, with each of the wheels (typically three) stopping, from left to right. Most machines allow the player to see the symbol before and after those that are on the win or pay line, so the player can see what they “almost” got. (Some machines are designed to pay off something on lines other than the pay line.)

What comes up is determined by a computer chip called the random operating chip. The pre-calculated odds for various symbols to come up are established between the casino and the manufacturer. In Nevada, there are strictly enforced minimum fair rate-of-return to players of at least 70 percent, and because of intense competition close by, the average rate of return is around 94.5 percent. The random chip must test out not only at the minimum fair rate, but if the casino is advertising a higher rate, it must be at that higher rate. The state inspects these machines regularly and randomly to enforce these rules.

In Indian casinos, there is no law requiring a fair rate of return, and unlike Nevada, no regular, unbiased, independent inspection. The pre-calculated odds for the random chips are left to the tribal casino and the slot machine manufacturer.

Getting back to the psychology, scientists have found that the area of the brain that establishes pleasure of all kinds is stimulated by all kinds of pleasurable experiences, such as when you find a $20 bill on the sidewalk. The design of these slot machines is to frequently pay the player a small amount to keep them playing. Playing a 25-cent machine, 75 cents at a time, one is losing 75 cents ever six to 10 seconds, depending on how fast you are pushing a button or pulling a handle (or feeding in another $20 to $100).

Using a typical rate of play equals about seven to eight plays per minute, which is 48 plays an hour. The player will randomly win small paybacks or jackpots frequently as they play. Using a random payback of 85 percent, for example, yields a return to the player during one hour’s time on this hypothetical quarter (actually 75 cents) machine a win total of $306 dollars an hour. (i.e. losses at that rate of play of $6 a minute, times 60 minutes, equals $360 an hour. [$360 in one hour in losses, less those winnings over the same time, at 85 percent return, equals $306]) That is a difference of $54 per hour!

Although this win-loss ratio is random, it is more constant over time. So the longer one plays, the more likely the constant is achieved. The player in this hypothetical one-hour time, hoping to win something big, is actually losing $54 an hour.

The bigger the promised “jackpot,” the lower the odds are of winning it. So a casino offering “double jackpots” on those one-time paybacks of $500 or more are offering little or nothing but a chance to lose even more money.

The psychology of slot machines is based on generating the “feeling” of winning. Over time, losing and having incredibly low odds of winning anything significant, the regular player is virtually guaranteed to lose. That is why casinos offer player cards and tiny prizes or benefits for racking up “player points” to heighten the sensation that one is going to “win something,” while they are steadily losing.

That is why most knowledgeable and informed gamblers never play slot machines. They will play a game that at least offers better odds of winning a significant amount and which still offers a slim chance, but is a whole lot better than any slot machine.