Slot BotsOn any given weekend in Las Vegas, casino bosses at Treasure Island can lower a few slot machines’ odds with the push of a few buttons, making it less likely that those slots will pay back as they otherwise might. They also could seat a VIP at a game and improve the odds for that player. The casino hasn’t yet taken such steps, and executives at other properties eyeing the technology say they won’t manipulate odds on the fly as a way to squeeze extra money out of gamblers. Others say it would be foolhardy not to capitalize on a relatively painless way to boost profits by changing a machine that pays back 99 percent of every dollar to, say, 95 percent. Some say that’s bad for business.
“That would kill the business opportunity for server-based gaming,” said Ed Rogich, vice president of marketing for slot maker International Game Technology. “The last thing you want to do is lose the customer’s trust.”
Nevada’s regulations require that machines have the same payback percentage for all players. But some regulators appear open to giving casinos leeway to tweak odds as long as they pay back the minimum percentage required by law. “That’s a decision that should be left to operators,” Gaming Control Board member Mark Clayton said.
Offering better odds to preferred players isn’t much different from a bank offering more favorable loan rates depending on a person’s credit history, Harrah’s Chief Operating Officer Tim Wilmott said.
In Nevada and other casino states, slot machines are governed by computer chips that determine a random outcome. By physically changing the computer chip in each machine—a process that can take hours and involves notifying state regulators—slots can be modified to pay out a certain percentage of bets over tens of thousands of hands. Nevada regulations allow casinos to download new odds—along with new games and denominations of games such as pennies, nickels and quarters—over about eight minutes.
For the majority of players, a one-percent difference in payback percentage is negligible. For casinos, however, a change indistinguishable to the masses can mean millions of dollars in increased revenue over thousands and thousands of spins. But systems enabling two-way communication between a machine and a centralized server also can cost millions of dollars. So casinos are still figuring out how to use the systems to boost long-term profit rather than have it simply pay for itself after a few years, said Richard Haddrill, chief executive of slot maker Bally Technologies. The benefits of today’s systems may be overblown, he said.
The transformation won’t occur overnight. Software upgrades that take a few months to implement in other industries can take at least two or three years for casinos, which are highly regulated businesses with rules that differ by state. “The technology is there,” says Bruce Rowe, a gaming consultant and former Harrah’s executive. “We just don’t know how to manage it yet.”