So whats his stuff about "loose" and payout?

Quote: FleaStiff

I've no particular idea why I am so averse to "one arm bandits".
The trouble is that in calculating this "looseness" percentage, there seems to be a step where they compare money taken in to money paid out.

I'd like to mention that today's (07/07/10) online version of the Las Vegas Sun has a story featuring the replacement of chips in selected slot machines at South Point casino. Mentioned is the fact that as a single-owner casino he has no stock holders or committees to deal with. Also mentioned are his comments about players not being fully aware of statistics but certainly being aware if there money doesn't last as long as it used to.

Some of the statements seem strange: how is a machine that pays out at 97 better for the player than one that pays out at 99? And of course he is not revealing which particular machines have looser chip settings now.

South Point’s Michael Gaughan gambles on looser slots (Heavily Excerpted)
Liz Benston Tuesday, July 6, 2010 | 2:01 a.m.

As sole proprietor of South Point, Michael Gaughan directed technicians to open up a few hundred so-called penny slot machines and replace their computer chips with chips programmed to pay back 1 to 2 percent more of gamblers’ wagers over time. He thinks the change will translate into higher revenue as a result of players losing less money in the long run.

“I think, over time, that people can tell” whether a machine is “loose” or “tight,” he says. “They’re not always right, but they can sense when there’s something different, when they used to come in and play for four hours and now they’re playing for two hours with the same amount of money. Then you look around and wonder where your customers went.”

Terms like loose or tight can have dramatic public relations consequences, yet are tricky to grasp in the practical sense.

Machines that pay back 97 percent of wagers may be better for gamblers than 99 percent machines if they have a lower standard deviation — a statistical term meaning that game outcomes are less volatile and trend toward the preprogrammed payback percentage more than those with higher standard deviations.

That’s according to Tony Lucas, a casino management professor at UNLV who says a slot machine’s theoretical payback percentage has little to do with how long the player’s bankroll will last, the factor that most concerns casino managers and their customers.

Lucas has conducted multiple studies to determine whether such a correlation exists, including one in which his team lowered the theoretical payback on a bank of slot machines by more than 10 percent over time, while at the same time lowering the volatility of the games.

Bankrolls diminished more rapidly when playing higher-payback slots that were also more volatile, an indication of an inverse relationship, if any at all, he says.

Players frequently complain about “tight” machines that in fact have more favorable outcomes over time — at least on paper, Lucas says.

Gaughan wouldn’t give the payback percentages of the machines he was changing. But while raising the payback of a slot machine from, for example, 98 to 99 percent might not sound like much, it represents a 50 percent reduction in potential revenue, as the casino’s “hold” is cut in half. That’s why Gaughan’s slot manager initially opposed the move — and why Gaughan says some casinos are going in the other direction, acquiring higher-holding games that can boost revenue in a way that isn’t always noticeable to players.

By all accounts, Nevada casinos are squeezing more profit out of their slot machines these days. Slots, in aggregate, are keeping a higher percentage of player wagers than they were a few years ago.

Although Lucas doubts the effectiveness of Gaughan’s slots exercise, he says it’s understandable in a time of experimentation and uncertainty.

I certainly agree that players have, at best, only a vague understanding of the mathematics involved. I would also agree that most players go by impressions of how long their money lasts which ofcourse can be a very subjective and inaccurate measure.

I do think that Vegas casinos have to do SOMETHING and this is one of the things they should all be trying.

I think it would be EASIER and QUICKER for them to simply beef up their Slot Rebate Programs and make them really worth some sizable rewards. That would be simpler than making actual chip adjustments which involve paperwork, fees, security, auditing, etc.

Although a step in the right direction, its really only about ten percent of the machines that were changed. The major emphasis was probably the publicity rather than the actual change. And the tightfisted attitude in the craps pit of 2x odds continues unabated.
So although its the right act for a casino to take right now, its mainly hype rather than true substance.

I recently encountered a review of a slot machine known as Rockin' Olives which apparently has really fancy graphics hand-painted by some artist in Las Vegas. Its a type of slot machine wherein there are frequent, but of course modest, payouts, lots of qualifying for frequent bonus rounds, ... its sort of a very visually demanding game.

Now it is obvious that if a machine dribbles out a few quarters every third or fourth spin, it ain't gonna be doleing out no Super Gigantic Jackpot even if you have maximum coin in and are qualified for the progressive function.

For over a decade the Time-At-Play in return for one dollar has been diminishing until a buck is worth sixty-five cents.

The reviewer loved the machine and particularly loved its graphics and other visual features. It was described as being fun to play. Now most people play slots so they can win big. This Rockin' Olives machine can't really win big, so one would think it has lost its major feature for even existing. Admittedly the reviewer was rather wealthy and therefore might not care about bang for her buck but I fail to see how even the non-wealthy tourists are going to utilize a machine just because it has cute graphics and keeps leaking tiny amounts of quarters.

Rockin' Olives Video of Guitar Battle. The machine looks like a very charming penny machine. The payouts go up to $3K on 2 cents (you can't get much higher than that). Almost all slot machines come with five or six different settings that determine the cash back.

I've played Rockin' Olives at Majestic Star Indiana. It was just too weird to pass up.

Quote: pacomartin

The 1X and 2X small payouts are considered part of the "payout percentage" of the machine. And yes they are almost always put back in the machine. That payback is the excitement builder. It is high enough to get you excited, but not high enough to make you quit.

Thats the problem right there! THEY consider those piddling little payouts as part of the payout percentage, but I refuse to accept such a paltry "teaser" sum as being significant financially. Its the functional equivalent of a lottery ticket giving you a payout of three dollars. Its a teaser sum, its not a payout.

>But the probability of hitting a 200X or something higher were very low (roughly once ever 6000 spins).
True. Peter Svoboda would say that anyone playing a slot machine for fewer than 6,000 spins is therefore not playing at the mathematically derived house edge because the math pre-supposes a player bankroll sufficient to go through all 6,000 spins.

Its the same with craps. He claims a mathematical house edge of 1.414 percent on the PassLine but 40 percent in reality based on the average bankroll being insufficient to allow the full 1980 rolls.

His calculations yield a house edge at MiniBacc of five percent. Again, no math is supplied on this.

Now I'm not entirely sure of his logic. After all, even that very first spin of a slot machine can stop on 777 and win the jackpot. You don't have to go thru 6,000 spins to have that first one be a winner.

If you need the math on this ask the first baseman. WHO ? Naturally

Well, if its about Table Games, I sure can't ask Dotty!!

Its just that with one-armed bandits, I think how much you are likely to win might not vary much between if you are putting maximum coin in or if you are just walking by on the way to the buffet. Certainly your odds of winning the jackpot seem about the same.

And as for this 1.2 percent at MiniBacc mathmatically but 5 percent at MiniBacc realistically, I'd sure like to see some of the math. (Just not too much of it).