Machines: New bells and whistles turn one-armed bandits into top casino moneymakers.
The old one-armed bandits on the Strip have been replaced by a new generation of high-tech pickpockets led by “Sinatra,” “The Frog Prince,” “Austin Powers” and “The Creature from the Black Lagoon.” Some use video animation and interactive touch monitor screens, some sing, and an experimental game emits a pleasing aroma.
Soon, even the blind will be able to play when “Ray Charles” slots with Braille markings and audio features find their way into casinos. One version, called “What’d I Pay” – a pun on a Charles song title – has the rhythm and blues legend talking about his life and giving spoken instructions to help visually impaired players. The game features “the Paylettes,” instead of his backup group, the Raylettes.
Over the past 25 years, slot machines have shed their stigma as the game of choice for women and inexperienced gamblers to become the dominant revenue generator and by far the most profitable component in the gambling business.
Last year, Nevada’s gambling revenue totaled about $9.6 billion, with $6.2 billion from slots and $3.4 billion from table games, such as blackjack and craps.
In 1960, there were 16,000 slots in Nevada – last year there were 213,191, with 80 percent of the revenue, or “win,” as it’s called here, coming from the Las Vegas area.
Meanwhile, an explosion in legalized gambling over the past generation has raised the number of slot machines in use around the country to more than 600,000.
Slots are permitted at racetracks in Delaware and West Virginia, and some Maryland legislators are clamoring to legalize them here. But Gov. Parris N. Glendening steadfastly opposes the idea.
Nationwide, slots account for 70 percent to 90 percent of the roughly $37 billion in casino gross revenue, said William R. Eadington, director of the Institute for the Study of Gambling and Commercial Gaming, at the University of Nevada-Reno. The only exception is in Las Vegas, where slots accounted for about half of the win.
“They [slots] are the bread and butter for casinos, as well as racetracks, and bars and taverns and many other places where they’re permitted,” Eadington said.
New generation of slots
The high-tech slots cost $6,000 to $10,000 apiece and some are based on new themes or pop icons. Pull the handle on “Sinatra” and a video of Ol’ Blue Eyes will appear and he’ll belt out tunes such as “Fly Me to the Moon” and “I’ve Got You Under My Skin.”
Unlike the old machines, players don’t need a bucket of coins to play. “Sinatra” will accept $1, $5, $10, $50 and $100 bills and it is linked to a progressive jackpot that starts at $500,000 and grows until a player hits it. In January, a woman playing a nickel “Addams Family” game in Las Vegas hit a $1.2 million progressive jackpot.
In one new game, “The Frog Prince,” when three animated frogs line up on the middle reels, the Online Casino Singapore player gets a “kiss the frog” bonus. A forest scene appears and three frogs wait for the player to kiss one of them by touching its image on the monitor to proceed to the next phase of the game.
Last year, Reno-based International Game Technology, the nation’s dominant manufacturer of slots, unveiled an experimental “I Love Lucy” machine that emits the aroma of chocolate. The slot re-creates the scene from the old TV show in which Lucy and Ethel are trying to wrap candy in a factory.
A Las Vegas company, Bally Gaming and Systems, came up with the Ray Charles slot machines. One version is “What’d I Pay,” and another uses Charles’ image with an American flag waving in the background as he sings “America the Beautiful.”
In March, Bally Gaming and Systems, a unit of Alliance Gaming Corp., won the 2002 Access Award from the American Foundation for the Blind for the Ray Charles slots. The AFB is a national nonprofit group dedicated to fighting for equal treatment for visually impaired people.
In a promotional spot for Bally, Charles, who lost his sight to glaucoma at age 6, says the slots will give blind people “independence” and enable them to have fun without depending on others’ help.
The Ray Charles machines haven’t reached casinos yet. As is the case with all new slots, the computer chip regulating the percentage the machines pay out to players must be tested and approved by jurisdictional gambling regulators.
The traditional fruit symbols that line up to signify a payoff – cherries, plums and oranges – have been replaced on most new machines. “Fortune Cookie,” an IGT game, uses food and other items found in a Chinese restaurant for its reel symbols.
Table games’ decline
Jim Kilby, the Boyd Professor of Gaming at the University of Nevada-Las Vegas, said the public’s preference for games is changing and the trend does not bode well for table games.
“During the 1940s, the game of choice was dice [craps]; second to that was blackjack, then roulette and slots,” he said. “If you zip ahead to the 1970s, the game of choice was blackjack, then dice, then roulette, then slots. In the 1990s, slots became number one, then blackjack, dice and roulette.”
Nevada, once the only state with casino gambling, now faces competition from Atlantic City, Mississippi Gulf Coast casinos, and riverboat gambling in the Midwest and the South. In addition, American Indians operate casinos in every region of the country.
Craps was very popular among World War II servicemen, but the demand for it is fading as that generation dies off. Last year, dice shooters accounted for 4.9 percent of Nevada’s gambling revenue.
Kilby said table games, craps in particular, intimidate casual gamblers.
“Unless you’re a dice player, and know what to do, it’s not an inviting thing,” he said. “People walk into a casino, and see the rear ends of a dozen men as they lean over a table. It’s hard to even find a spot at the table, and the game is moving so fast, the dealer can’t tell you how to play.”
No skill required
Kilby said slots are popular because it takes no skill to play them: “If you can find the handle, and if you can find the money slot, you can play.”
The increasing demand for slot machines has spawned a multibillion-dollar industry dominated by IGT, which recently acquired Anchor Gaming in a $1.1 billion deal that created the largest public company in Nevada.
Over the past 100 years, slots have evolved from noisy, metal, mechanical devices to high-tech electronic gadgets run by stepper motors and microchips.
Stepper motors, introduced in the 1980s, made it possible to offer huge jackpots driven by the same kind of astronomical odds found in multimillion-dollar state lotteries.
Stepper motors can create a nearly limitless number of stops on a machine’s reel strip, increasing the number of possible combinations. An old three-reel mechanical slot with 20 stops per reel produced 8,000 possible combinations. There are 16,777,216 possible combinations on a new three-reel slot with 256 stops per reel.
IGT’s five most popular games – “Wheel of Fortune,” “Red, White & Blue,” “Double Diamond,” “Triple Diamond” and “Five Times Pay” – don’t have novelty themes, but also belong to the new generation of slots. A payout percentage is programmed into the new machines’ microprocessors. The amount they retain is called the house advantage.
Nevada law says the house advantage for slots can be as high as 25 percent, but Kilby said no casino could survive raking in that much – players would go to competitors with more generous machines. A typical Nevada slot keeps about 5 cents out of every dollar that goes into it.
Slot players who score early and stop gambling can walk away as winners, but those who hang in for the long haul will lose.
“The strategy of the casinos is to get you to wager as much as you can,” Eadington said. “You really have to be very foolish or very much out of touch with reality to assume that you’re going to be the winner, and I think most people accept that. When people mix reality with fantasy, problem gambling is the result.”
The locals know better
Kilby said a typical Nevada slot retains about $88 a day, which means up to $32,120 a year in gross profit. Slot machines on the Strip are set to make about $120 a day – $43,800 a year.
Kilby said local players avoid the Strip and flock to less glamorous places where they play video poker. Unlike slots, skill counts in video poker because the player can determine which cards to keep and which cards to discard.
“If you go to a locals joint, you’ll find that 80 percent of the games are video poker, which has a casino advantage of approximately 1 percent,” he said. “If you go to Caesar’s Palace, you’ll find that no more than 20 percent of the machines are video poker because the tourist who comes here once every 18 months or so is not sophisticated enough to demand games with a low casino advantage.”
Eadington said theories abound on why people play slots, but the truth is difficult to determine.
One theory presumes that slot players are stimulated because winning gives them an adrenaline rush, and a feeling of importance, and the slot lets them score enough small wins to keep them playing, Eadington said.
As entertainment, playing slots is relatively active compared with pursuits such as watching television or sitting in a movie theater.
An all-consuming ‘escape’
“A lot of people use gambling as a way to get away from their everyday lives,” Eadington said. “And gaming is very hypnotic, it’s very easy to escape from yourself and go off into another world while you’re playing slots.”
George L. Lewis, the president of Surveillance Specialists Inc., a firm that provides security for casinos, said he has seen slot players who become so engrossed that they’ve tuned out the rest of the world.
Once, when Lewis was director of security at a local casino, five robbers walked in wearing masks, and the slot players either did not notice them or did not care.
“These guys came in wearing masks and walked right past people playing the slots, and they just continued to play,” he said. The robbers leaped over a counter, stole money from a cage, and fled past the slot players, Lewis said.
Lewis said he has caught people using slugs, counterfeit coins and even a sophisticated electronic device to cheat slot machines.
“A lot of people who aren’t in the industry are surprised to hear that people cheat slot machines,” he said. “But every game in the casino can be cheated. I have one device I confiscated from a cheater who actually used it, that tricked the machine into paying out, and it sold on the black market for $15,000 here in Las Vegas.”
Recently, a scene at Terrible’s Casino Hotel seemed to echo the slot industry’s maxim that players should appreciate slots for their entertainment value.
About 3 a.m. on a Sunday, a security guard approached a man with a forlorn expression who had walked away from a slot.
“How did you do?” asked the guard.
The man said he had won $200 from the slots earlier that night, then lost his whole bankroll.
“Did you have fun?” the guard asked.
“Yeah, I guess, I did,” the man replied sheepishly.
The guard paused for a moment, and said, “Well, when you go to the movies, they don’t give you your money back either.”