Potential loss of revenue

Hi, I was recently approached by a supplier of slot machines and asked if I could answer a question. I will paint a hypothetical scenario and see what the general consensus is within the gaming arena.

If a casino has, say, 2000 slot machines and 1 of them is faulty and has to be turned off for a week or two for repairs. Considering the casino has a maximum occupancy (At its busiest time) of 80%, can anyone conclusively work out how much money was lost by the casino, if any. Would that money have walked out the door?

Things that need to considered:
1) There are 20% of the machines unoccupied and available for play at the busiest time in this casino - even more during quiet periods.
2) There are similar game types (Same as the off machine) across the floor - so availability is there
3) Will the money leave the premises or will the gambler just play elsewhere - we all know the habits of a gambler

It would be interesting to get some views on this.

Just to pull numbers out of thin air, I'd put the loss of business at 1/2000 = 0.05%. I get that there are always other game X available. However, it makes a casino look dilapidated to have "closed for repairs" signs all over the place. Also, slot players are superstitious and like to have an illusion of choice. Some will surely think the casino shut down the lucky machine because it was paying too much.

Hi Wizard, that's a very generalized response and the easiest way out, what about weighted theoretical win per machine, smoking area's are higher revenue generators than non-smoking area's. Historical data tells us this. Based on that, you cannot compare all machines equally??? If you spread the revenue out to all 2000 machines, 1/2000 is 0.05% of the revenue, but there are lots of factors that need to be taken into consideration. Denomination, hold %, smoking/non-smoking, volatility, all these alter the revenue % generated by each machine. Can anyone help with a statistical maths equation to work this out? I know that we are all casino employees, or were at some time, but there must be some stats buff out there who can give us an answer.

If you have 10 cigarette dispensing machines and one has run out of a certain brand, is the person going to purchase his cigarettes from another machine or give up smoking?

Sure. Sounds easy. All you need to know is how much each of those factors affects each of the 2000 machines. Then you can figure out how much each of the 2000 machines contributes to the revenue total, and subtract out the particular machine or machines that are out of service.

Do you see the problem here?


I'll make an even more generalized response that is an even easier way out: since you said pretty much that there were ample spares of each type of machine, and didn't specify any of the other environmental conditions that you just mentioned now, remove the defective one from the floor and rearrange the rest of them so that you couldn't tell it was ever there. Since you weren't at 100% utilization, there will be no loss of revenue.

In my opinion, there are far too many variables involved to answer this with any degree of certainty.

For example, if the machine was a $1 Wheel of Fortune machine, and the casino has another 5 or 6 of them, and there are almost always two open at any particular time, then the loss is pretty much zero. It could also be an unpopular machine; how many "generic" nickel slots (e.g. Texas Tea, or whatever "jackpot or nothing" (the machine where all of the stops were either red 7s or blanks, and either you got three red 7s and you won or you didn't and you lost) is/was called) tend to be occupied even at the busiest times?

On the other hand, take a real world example: how many people didn't play slots at MGM Grand solely because Lion's Share had been hit?

The same goes for VP - it's more likely to cost the casino money if it's one of the few 9/6 Jacks or Better machines on the floor than if it is one of the many 8/5s.