The gaming industry is big business in the U.S., contributing an estimated US$240 billion to the economy each year, while generating $38 billion in tax revenues and supporting 17 million jobs.
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What people may not realize is that slot machines, video poker machines and other electronic gaming devices make up the bulk of all that economic activity. At casinos in Iowa and South Dakota, for example, such devices have contributed up to 89 percent of annual gaming revenue.
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Spinning-reel slots in particular are profit juggernauts for most casinos, outperforming table games like blackjack, video poker machines and other forms of gambling.
What about slot machines makes them such reliable money makers? In part, it has something to do with casinos’ ability to hide their true price from even the savviest of gamblers.
The price of a slot
An important economic theory holds that when the price of something goes up, demand for it tends to fall.
But that depends on price transparency, which exists for most of the day-to-day purchases we make. That is, other than visits to the doctor’s office and possibly the auto mechanic, we know the price of most products and services before we decide to pay for them.
Slots may be even worse than the doctor’s office, in that most of us will never know the true price of our wagers. Which means the law of supply and demand breaks down.
Casino operators usually think of price in terms of what is known as the average or expected house advantage on each bet placed by players. Basically, it’s the long-term edge that is built into the game. For an individual player, his or her limited interaction with the game will result in a “price” that looks a lot different.
For example, consider a game with a 10 percent house advantage – which is fairly typical. This means that over the long run, the game will return 10 percent of all wagers it accepts to the casino that owns it. So if it accepts $1 million in wagers over 2 million spins, it would be expected to pay out $900,000, resulting in a casino gain of $100,000. Thus from the management’s perspective, the “price” it charges is the 10 percent it expects to collect from gamblers over time.
Individual players, however, will likely define price as the cost of the spin. For example, if a player bets $1, spins the reels and receives no payout, that’ll be the price – not 10 cents.
So who is correct? Both, in a way. While the game has certainly collected $1 from the player, management knows that eventually 90 cents of that will be dispensed to other players.
A player could never know this, however, given he will only be playing for an hour or two, during which he may hope a large payout will make up for his many losses and then some. And at this rate of play it could take years of playing a single slot machine for the casino’s long-term advantage to become evident.
Short-term vs. long-term
This difference in price perspective is rooted in the gap between the short-term view of the players and the long-term view of management. This is one of the lessons I’ve learned in my more than three decades in the gambling industry analyzing the performance of casino games and as a researcher studying them.
Let’s consider George, who just got his paycheck and heads to the casino with $80 to spend over an hour on a Tuesday night. There are basically three outcomes: He loses everything, hits a considerable jackpot and wins big, or makes or loses a little but manages to walk away before the odds turn decidedly against him.
Of course, the first outcome is far more common than the other two – it has to be for the casino to maintain its house advantage. The funds to pay big jackpots come from frequent losers (who get wiped out). Without all these losers, there can be no big winners – which is why so many people play in the first place.
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Specifically, the sum of all the individual losses is used to fund the big jackpots. Therefore, to provide enticing jackpots, many players must lose all of their Tuesday night bankroll.
What is less obvious to many is that the long-term experience rarely occurs at the player level. That is, players rarely lose their $80 in a uniform manner (that is, a rate of 10 percent per spin). If this were the typical slot experience, it would be predictably disappointing. But it would make it very easy for a player to identify the price he’s paying.
Raising the price
Ultimately, the casino is selling excitement, which is comprised of hope and variance. Even though a slot may have a modest house advantage from management’s perspective, such as 4 percent, it can and often does win all of George’s Tuesday night bankroll in short order.
This is primarily due to the variance in the slot machine’s pay table – which lists all the winning symbol combinations and the number of credits awarded for each one. While the pay table is visible to the player, the probability of producing each winning symbol combination remains hidden. Of course, these probabilities are a critical determinant of the house advantage – that is, the long-term price of the wager.
This rare ability to hide the price of a good or service offers an opportunity for casino management to raise the price without notifying the players – if they can get away with it.
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Casino managers are under tremendous pressure to maximize their all-important slot revenue, but they do not want to kill the golden goose by raising the “price” too much. If players are able to detect these concealed price increases simply by playing the games, then they may choose to play at another casino.
This terrifies casino operators, as it is difficult and expensive to recover from perceptions of a high-priced slot product.
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Getting away with it
Consequently, many operators resist increasing the house advantages of their slot machines, believing that players can detect these price shocks.
Our new research, however, has found that increases in the casino advantage have produced significant gains in revenue with no signs of detection even by savvy players. In multiple comparisons of two otherwise identical reel games, the high-priced games produced significantly greater revenue for the casino. These findings were confirmed in a second study.
Further analysis revealed no evidence of play migration from the high-priced games, despite the fact their low-priced counterparts were located a mere 3 feet away.
Importantly, these results occurred in spite of the egregious economic disincentive to play the high-priced games. That is, the visible pay tables were identical on both the high- and low-priced games, within each of the two-game pairings. The only difference was the concealed probabilities of each payout.
Armed with this knowledge, management may be more willing to increase prices. And for price-sensitive gamblers, reel slot machines may become something to avoid.
When you play the slots you want to do your part to increase your chances of winning the jackpot. If you want to find a loose slot machine then you will find these tips to be helpful to you. The first thing you want to realize is the slots games do win at random and this means you should never count on a slot machine to produce certain results, but this doesn’t mean there aren’t some things you can do that will help you to increase your chances of winning. Below are 5 tips that will help you with finding loose slot machines to hit a jackpot.
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- The first tip that will help you to increase your chances of hitting a jackpot is to time the machines. If you are in a land based casino playing the slots then you can simply sit near the slot machine you are timing and watch the results. However, you do want to make sure you are playing while you are timing that machine otherwise you can look like you are up to something and this will make the other players uneasy. If you are watching a certain machine and you see that it is getting a lot of attention and has yet to pay out a bog win then this is an indication that it should be getting close to paying out some nice wins soon. If this is the case, then you want to be the next person to jump on that machine when the person playing it steps away from it. If you are playing at an online casino then you want to watch for the announcements which many of the casinos post to let you know about recent big wins. If a slot machine has just paid out a large jackpot then you should give it some time before playing it.
- Another thing you want to keep in mind is the slot machines will have their cycles. There is not a game out there that will remain tight forever and at some point that machine is going to pay out big and you want to be the player that is playing it when this happens. If a game has been tight for a good length of time then it will reach a point where it will payout some nice sized wins, generally pretty much in a row. So, if you get on a game and it pays out a nice win don’t assume that is it and leave that game, stick around for a while and see if it has more to give. Many times you will see that pattern happen which will lead to you seeing quite a few bigger wins in a row.
- You should stay away from playing the slot machines that aren’t popular with the players. You want to play a game that has been getting a lot of attention from players. It is the more popular games that have a better chance of becoming loose and offering you the results you are looking forward to. By getting on a stale and less popular slots game you can waste your money only to find that the machine has nothing good to offer you in the way of decent wins. Plus, these games tend not to be very entertaining and are generally the ones that lack those special features which add both more excitement and chances for you to win.
- Another tip you want to keep in mind is not to fall into a trap of playing a game for too long. If the game is just keeping you going and giving you enough wins along the way to give you a false sense of hope then you want to realize that the game may not be getting loose and should be one you should stop playing. The best way for you to approach a game that is doing this to you is to stop playing it for a while and return to it in a little while. The best way to think about this is it’s like you are letting other players loosen it up for you and then you are returning when it’s closer to hitting. You never want to sit at one slots game and watch it take your money all the way down.
- Another great tip you want to follow is to play the high limit slots games. These games may cost you more to play, but they also pay out more. Plus, they tend to pay out more often. However, you will really need to watch your bankroll when you are on the high limit slots. If you are a player who is used to playing the regular slots then you need to be extra cautious when you switch to the high limit games because your money will go much faster and if you don’t watch it closely you could be in for a big surprise. However, when you want to find looser slots games, these will be your best bet.
Conclusion
When you want to find the loose slot machines and hit a jackpot you should follow the tips listed above. Always make sure you start out with a good money management plan and follow it. You should also make sure you have a good time. This way, you will enjoy your time playing no matter what the results end up being. With so many different types of slots games for you to choose from you should find many of them that will meet your own individual slots gaming needs. Don’t be afraid to leave a game that isn’t winning and which you feel isn’t going to hit any time soon. A lot of players get trapped into thinking that it will be just their luck that they will stop playing the game and it will payout big as soon as they leave it and this can be a costly way of thinking.