Sit and Spin

How slot machines give gamblers the business

by Marc Cooper , Atlantic Monthly

When legalized casino gambling dawned in America, in the era of Bugsy Siegel and Meyer Lansky, primitive slot machines—those one-armed bandits—served as little more than mechanical babysitters for the wives and girlfriends of high-roller card and dice players. And for decades thereafter, even as casinos low-rolled their way into the mainstream, gambling itself retained an air of disrepute (charming though it could be) that tended to keep decent folks away. But the recent proliferation of highl sophisticated, computerized, brightly lit, singing-and-talking slots has done away with any lingering social stigma attached to the betting life. Some statistics, random but telling:

America now has twice as many publicly available gambling devices that take money—slot and video-poker machines and electronic lottery outlets—as it does ATMs that dispense it. In the past fifteen years the number of such devices has grown fivefold, to more than 740,000, and is still mounting. This year a record 73 million Americans will visit one of the 1,200 gambling joints now stretching from coast to coast—a nearly 40 percent increase in visitors from just five years ago. Players make an average of six pilgrimages a year to these beckoning temples of luck, and more than a quarter of American adults now list gambling as their No. 1 entertainment choice. As much as 70 percent of the $48 billion in gaming revenues raked in by the casinos comes from slots. (Texas Hold'em poker and other table games may be the latest gambling fad both on TV and in Ben Affleck's social circle, but for the casinos it's all about machines, machines, machines.) Americans now spend on slots five times the amount they spend on movie tickets.

The slot-machine market is so hot, it's in a state of perpetual shake-out. More than 500 games a year are introduced on the casino floor, but each is granted only a few weeks' probation. They either perform immediately or get yanked, junked, and replaced (a profitable machine that costs about $10,000 can pay for itself in just thirty days).

Two contradictory, clashing principles—embodied in the terms TOD and revpac—drive the design of the modern slot machine. Customers, the suckers who put the money into the machines, want maximum TOD, time on device. They want to play as long as possible with their stake, and maybe even win. The machine operators want maximum revpac, revenue per available customer. Duh. The resulting products represent a compromise—these machines keep you more entertained and more engaged, and create the illusion that you are winning while making it more likely you will lose.

Take, for instance, the gleaming chrome totem that is the Jumbo Popcorn Slotto Five-Reel Bonus Game, made by AC Coin & Slot, of Pleasantville, New Jersey. Look at this nine-foot-tall, $11,000 behemoth and you ll see a century's worth of slot-machine evolution. The bottom half, with its bank of spinning reels stamped with symbols, appears little different from the basic three-reel mechanical slot machine built by the San Franciscan Charles August Fey in 1899. But the upper half of the machine is something else: a state-of-the-art "top box" that offers a bonus round of play beyond that of the basic reels below. (Fey's mechanical design dominated almost unchanged until the 1960s, when some electronic circuits were added to the machines. In the 1980s slots were computerized and bonus rounds were introduced, and in the 1990s video technology and top boxes appeared. The latest twist involves bonuses that pop up for no special reason—except to keep you playing. You get more TOD. The casino gets more revpac. Everyone's having fun.)

This particular top box is a glass case with a life-size theater popcorn kettle suspended inside, brimming not with corn but with a couple of dozen numbered "slotto" balls. Hit a bonus and a retro-sounding digital voice from somewhere inside the Slotto machine merrily announces, over a swell of 1950s movie-house music, "It's time for the Popcorn Bonus Show! Which size popcorn will you win?" After the same voice declares the size of the winnings (for instance, "medium"), the kettle inside the glass case begins rattling and shaking, and to the sounds of popping corn, slotto balls plop from the cooker and land in a tube, revealing the exact number of bonus credits—all of this supposedly being a great incentive to keep playing. "The fifty-to-sixty-year-old people who love to play machines are a pretty lively bunch," Chris Strano, AC Coin & Slot's marketing VP, said after correctly identifying me as one more thrill-seeking Boomer (I was playing with a generous exhibition Slotto machine at the Southern Gaming Summit, in casino-rich—pre-Katrina—Biloxi, Mississippi). "They are the Woodstock generation, and they want to have fun. That's what we give them. Something exciting, entertaining, and unpredictable."

They (that is to say "we") are also apparently hungry for comfy and reassuring themes, so machine builders are jostling one another in a frenzied race to license every nook and cranny of popular culture, both high and low: movies and movie stars; TV sitcoms, game shows, and commercials; board games and puzzles; myths, legends, and fairy tales; fads and celebrities; cars and boats; comic books and comic strips. Even Spam and Tabasco-sauce machines have become common. When a player hits a bonus round on an I Love Lucy machine, he's treated to video clips from the legendary TV show. (A rare version made several years ago even sprayed a rich chocolate scent in front of the player's nose when the classic scene of Lucy in the chocolate factory was shown.) This year's gaming summit featured new entries with Star Wars, Men in Black, and The Apprentice themes. Lose enough spins on this last machine and Donald Trump's perfectly reproduced voice shouts out, "You're fired"!—a better phrase than "You're bankrupt!"

Playing that Donald machine, by the way, just might bankrupt you. It can cost $2 a spin, and if you're fast enough, you can spin it 500 to 600 times an hour. Which brings us to the other latest trend in modern slot machines: games that apply a sinister multi-coin, multi-pay-line, low-denomination formula. Now we're talking real revpac.

Until recently most slot machines accepted only quarters or silver dollars, usually a maximum of three at a time. (Penny and nickel slots were relegated to sleazy grind joints and thought to be the last recourse for those unfortunate souls who had run out of Ripple.) The typical player would bet maybe a half dollar per pull. Those seeking more risk would play a dollar. Three- dollar bets were for the few who thrived on living dangerously. But rejoice, for we live in an age of ever more finely calibrated choice, and now the player, by touching the machine's interactive video screen, can choose a variety of denominations to be played—those denominations being deceptively itty-bitty. Cutting-edge machines like The Apprentice are designed to be played mostly at the one-cent and five-cent levels. Sounds cheap enough. Sounds like you ll get maximum TOD.

The catch is that these new machines allow you—encourage you, really—to play dozens, scores, even hundreds of "coins," or credits, per spin. The illusion created is rather startling. When the casual player slips a $20 bill into the machine, he may feel rich upon finding that he has a whopping 2,000 credits to gamble. That is, unless he's conscious of the fact that a spin could cost a fourth or even more than half of his total stake. The machine makers finally figured out that the lower the denomination, and thus the more coins one is allowed to play, the bigger the resulting bets. A player winds up more comfortably wagering amounts unthinkable even a few years ago—not just one or three or five dollars a spin but $10 or even $12.

Now that the casinos have you betting more than ever, two other questions arise: First, what will be the machine's payback percentage—that is, how much will the casino keep of every dollar you play? And second, with what frequency will the machine pay off your portion? There's no guesswork involved in these formulas, and certainly no "luck." Nowadays every machine on every casino floor in America is a sophisticated, powerful digital processor whose outcomes and paybacks are quite precisely determined long before any player walks up to play. "It's true," writes Frank Legato, the author of How to Win Millions Playing Slot Machines!... or Lose Trying, who—despite the title of his book—knocks down every hoary myth about how to win at slots. "Regardless of which mechanical apparatus is added; regardless of how many funny cartoons there are; regardless of whether they play the song from a TV show, give the player a board game to play, play the overture from Les Misérables, or get down on one knee and sing 'Mammy,' all modern slot machines are computers."

And at the steely, unforgiving heart of every device clicks an ultra-fast silicon-age random-number generator, or RNG. Each and every second, even when the machine is otherwise idle, the RNG and its elaborate software cycle through a mind-twisting 200 million numbers. When a player drops in the first coin and pushes the "spin" button or pulls the lever, one of those numbers is frozen and is instantly communicated to the spinning reels, whether they be mechanical or virtual. The alignment of cherries, pears, carrots, Tabasco bottles, and singing bunnies is merely a visual representation of the predetermined outcome.

By law each RNG is preset to pay back to players a certain percentage of the money taken in. In Atlantic City there's an 83 percent minimum payback (or a 17 percent "hold" for the casino, if you prefer). In Nevada it's 75 percent. But most casinos set their machines in the low-to-mid 90s. A 90 percent payback may sound generous, but, as Legato points out, even a machine that paid back 100 percent—over the long run—would be a "break even" machine, offering players as much chance to lose as to win.

And "the long run" is a very long run—namely, infinity. Marten Jensen, the so-called "Doctor of Gambling," points out in his Beat the Slots that even an apparently low-stakes slot session can chew right through a hefty bankroll. Jensen calculates that playing only 25 cents per spin on a machine with a 90 percent payback will cost a gambler $12 an hour. Play the more common bet nowadays of $5 a spin and the average loss will be $240 an hour. Any wonder that dollar-slot players who roll up to the casinos in their RVs are treated with the same deference once granted to C-note-betting blackjack enthusiasts?

There is no way to gain an edge on slot machines—no possible strategy for beating them other than simply not playing them. So-called "hot" and "cold" machines are simply a fantasy of suckers. The only real choice a player has—over the long run—is how to lose his or her money.

Slot-machine makers offer two basic choices—though they're hardly advertised. You can choose either a "low hit frequency" machine, which pays off infrequently but pays off big (sometimes with what are called "life-changing" jackpots), or a "high hit frequency" machine, which almost constantly trickles back part of what you put in but offers little chance of a big payoff. In other words, you can play a boring machine with the slim chance of getting rich, or have some fun with almost no chance of wealth.

Inside MGM-Mirage's Beau Rivage casino, on the now ravaged Biloxi shoreline, I had a nasty encounter with the ultimate low-hit-frequency machine, one with an elusive, life-changing score: Megabucks, made by the industry giant International Game Technology, of Reno, Nevada. A raging national success, Megabucks machines are linked by network in order to pool payoffs in always increasing mega-jackpots. The night I played at Beau Rivage, the jackpot was more than $3.2 million—very much like a state lottery with a "spin" button attached. I fed just one $20 bill into the Megabucks slot. Unwilling to play at the $3 level required to win the mega-jackpot, I chose to play two nickels on each of the twelve available pay lines, a relatively modest $1.20 bet per spin. Sitting at the machine, with its fifteen buttons on the console and its five whirring video columns on the computer screen, I felt as if I were trying to fly a small helicopter. An odd combination of symbols blurred before me with each spin—cherries and grapes and pears were mixed in with Rolex watches, cameras, and passports, suggesting some sort of fantasy journey to a foreign fruit orchard—and each spin was punctuated with a short, dramatic musical riff. A fast grind it was, very fast: my twenty bucks disappeared in exactly four and a half minutes of play.

Enough. I downgraded the challenge to finding a machine that would simply be fun to play and, yes, would offer me some extended TOD.

I searched the Beau Rivage for a more generous RNG, one of those high-hit-frequency machines intended to rekindle the fire in my Boomer soul. I settled on Mr. Cashman, a machine built by Aristocrat Technologies, of Sydney, Australia. Here was the opposite of the Megabucks machine. Mr. Cashman promised low jackpots but plenty of action, and an almost certain dribble of partial payback. I must, however, disclose my extreme initial disdain. I m not squeamish about gambling. Rather, I m a gambling snob. I pride myself on being a fairly accomplished blackjack player, one who relies on skill and strategy, and Mr. Cashman seemed to be about the most infantile, intellectually insulting device I had ever seen. Its five video reels featured primitively rendered zebras, rhinos, and lions mixed in with leopard-skin-covered block letters. The whole thing looked like a digital kindergarten phonetics workbook.

It was one of those new "penny" machines that allowed a play of 500 credits per spin—a crudely disguised and ultimately bankroll-busting $5 machine. Refusing to be completely suckered, I played a miserly sixty cents per spin, hoping to make my $20 buy-in last beyond a few minutes.

An Aristocrat sales rep had told me earlier in the week that Mr. Cashman's appeal was that its bonus rounds were completely random—you never knew when Mr. Cashman himself was going to pop up and bestow a favor. And lo, on only my fifth spin a catchy digital crescendo announced that Mr. Cashman was about to visit me with one of those random bonuses. A smiling, anthropomorphic golden coin, part Pac-Man and part Planters peanut man, decked out in a top hat and tap shoes, danced onto my screen, superimposing himself on the video reels. He tipped his hat and then proceeded to "spin" two of my five reels for me, producing 40 bonus credits—the most amusing forty cents I have ever won.

I was hooked. As the reels spun to the sound of galloping hooves (go figure!), I was treated to a rat-a-tat of little but near-constant "winning" hits, returning eight, twenty, thirty credits at a time. (So that you can keep the ledg er straight: I was getting back eight, twenty, or thirty cents on bets of sixty cents—in other words, I was slowly losing.) When I turned up a bonus peacock after matching two 9s with a zebra, the machine seemed to pour out credits—hundreds of them. But it was harder to figure out exactly why I had won than it is to count the cards in a game of six-deck blackjack. No matter, I was having too much fun. After a full hour of play, five variously entertaining appearances by Mr. Cashman, and the occasional windfall, I had amassed 2,668 credits. Sated and delighted, I cashed out my $6.68 in winnings and felt like Donald Trump. It was infinitely more entertaining to play the quick-hit, low-payout Mr. Cashman than it was to labor over the parsimonious Megabucks and its elusive, if not totally illusory, multimillion-dollar jackpot. I loved Mr. Cashman. What more could I ask? I got plenty of TOD and six bucks in winnings.

his new generation of gambling machines has, predictably, produced a new generation of gambling addicts: not players who thrive on the adrenaline rush of a high-wager roll of the dice or turn of a card but, rather, zoned-out "escape" players who yearn for the smooth numbness produced by the endlessly spinning reels. Industry critics say that the lion's share of slot-machine profits come, also predictably, from a relatively small percentage of the players—the compulsive and the addicted. Gambling researchers describe these slot zombies as being fearful that another player will sit down on a neighboring stool and distract them by trying to talk to them.

In his Designing Casinos to Dominate the Competition, an exhaustive 600-page, eight-pound study of every major casino in Nevada, the former casino executive Bill Friedman recognizes the cocooning allure of machine gambling, implicitly arguing that the snugger and more isolating a casino space is, the more inviting it is to machine players. The most productive joints, he writes, are "segmented into ... separated gambling areas that ... create intimate playing settings." Never mind elaborate theme d cor. Friedman contends that the perfect gambling environment is a low-ceilinged, dimly lit maze of nooks and crannies that encourage players to curl up by themselves in front of their favorite machines, much as they do in front of the home TV—unmolested, unobserved, and entranced. Who fifty years ago would have figured that television was a gateway drug that would lead to gambling addiction? (Of course, it has also led to adolescent video games like Grand Theft Auto, which—in a sign of the times—some consider to be much more pernicious than mere gambling devices. Note that the former Christian Coalition leader Ralph Reed has lobbied for slot-machine interests, whereas Senator Hillary Clinton recently denounced the more prurient aspects of Grand Theft Auto.)

In this world of quiet but desperate gambling-machine dependence, video poker is the undisputed crack cocaine. Its rapid-fire reinforcement schedule (clinical jargon for fast pacing and frequent payoffs) is an accelerant to addiction. Experts say that whereas horse-race betting, for instance, can take ten or fifteen years to mature into a pathological addiction, getting hooked on video poker often takes only a few months. Around since 1978, and now making up about a quarter of gambling machines, video poker is alluring in that—unlike other gambling devices—it involves a measure of skill; you are playing live poker against a computer, and it actually matters which buttons you push. Since 1981, when the gambling theorist and poker master David Sklansky wrote an article in Casino and Sports outlining how an experienced and skillful player can gain a slight (very slight) odds advantage over the house, beating the machine has been an obsession for millions. However, since video poker is governed by RNGs set for paybacks similar to those of slot machines, the best even a topnotch gambler can achieve—playing computer perfect on the most generously set machine—is a less than one percent advantage.

In his straightforward Video Poker Optimum Play the retired computer expert and part-time poker-dealer instructor Dan Paymar starkly outlines the matter. "Suppose you're playing 600 hands per hour on a five-coin $1 Deuces Wild at 100.75% average payback," he says of one of the machines known to pay back more than they take in. "At five dollars per play, you're wagering $3,000 per hour. Over the long term, you can expect to gain an average of .75% of your wagers, or $22.50 per hour ..." In other words, if you are willing to risk $24,000 a day, "over the long term" you might make a little more than $150 a day. You might.

Wage slavery, by comparison, suddenly seems like a hell of a good deal.

If video poker is the crack cocaine of machines, then the Multi-Strike game is the mound of snow that Tony Montana sticks his face in at the end of Scarface. A few weeks after the Biloxi exhibition I played a session of Multi-Strike in a San Diego area Indian casino. A clever, rather insidious contraption, it lets the user play not one but four hands of poker each round, each hand paying odds twice as high as the previous. As with an arcade game, however, the player has to continue winning in order to advance. Get to the fourth hand and the payout is eight times as high as in the first hand.

I found myself immediately entranced by the digital music that accompanied my play. I could aurally "read" my progress—the musical riffs, and my level of tension, escalated one key each time I got bumped up to the next hand. I was finished piddling around. Playing twenty dollars per round, five bucks on each of the four hands dealt out, I harbored a certain giddy anticipation of making it to the fourth hand, hitting a royal flush, and bagging $32,000. The beauty of Multi-Strike, at least from the casino point of view, is that although it theoretically pays back the same as any other video-poker machine, its play is so complicated, there is so much happening on the screen, the betting must be so strategic, that it requires NASA-level concentration to play perfectly.

Several days before my Multi-Strike session I started reading a stack of articles and tip sheets on how to compete with its computerized brain. But within the first few minutes of real-life play I was hopelessly adrift, mesmerized by the complexity of decisions I had to make, distracted by the fetching music, confused by the differing strategies needed for each succeeding hand.

My reverie of a five-figure win faded quickly. No single round paid me more than $180 (against a $20 bet). After twenty minutes I walked away $400 poorer, with a pounding headache and a pain in my stomach. I might as well have blown through a pile of coke. But I wasn't about to go cold turkey. I knew instinctively the only effective antidote for such a foul mood: I needed a half hour of mindless entertainment with the smiling and much more generous Mr. Cashman.

The URL for this page is http://www.theatlantic.com/doc/200512/slot-machines.