Slot manipulation possible

By Liz Benston

Friday, Nov. 17, 2006 | 6:55 a.m.

On any given weekend, casino bosses at Treasure Island can lower a few slot machines' odds with the push of a few buttons in a back room, making it less likely that those slots will pay back as much money as they otherwise might.

The casino also could seat a VIP at a game and improve the odds for that player while the person sitting next to him plays a machine with lower odds.

The casino hasn't yet taken such steps, and executives at other properties eyeing the technology say they won't manipulate odds on the fly as a way to squeeze a few extra dollars and cents out of gamblers.

Others say it would be foolhardy not to capitalize on a relatively painless way to boost profit during special events or busy times of day by changing a slot machine that pays back 99 percent of every dollar to, say, 95 percent. Some casino execs and slot manufacturers say that's bad for business.

"That would kill the business opportunity for server-based gaming," said Ed Rogich, vice president of marketing for slot maker International Game Technology. "The last thing you want to do is lose the customer's trust."

At the Global Gaming Expo, which ended Thursday at the Las Vegas Convention Center, companies revealed more advanced prototypes of so-called "server-based" systems, which allow casino bosses - or even players - to download different games onto machines on the casino floor from a centralized computer system.

Nevada's regulations require that machines have the same payback percentage for all players - in other words, that VIPs don't get preferential treatment. But some regulators appear open to giving casinos leeway to tweak odds as long as they pay back the minimum percentage required by law.

"That's a decision that should be left to operators," Gaming Control Board member Mark Clayton said.

Harrah's Entertainment, which owes much of its financial success to customer tracking software and other high-tech innovations, will be launching its own test of downloadable games over the next few months at a tribal casino that the company manages in San Diego. Such games could be available in Nevada casinos by mid-2007.

Offering better odds to preferred players isn't much different from a bank offering more favorable loan rates depending on a person's credit history, Harrah's Chief Operating Officer Tim Wilmott said in an interview at the conference Wednesday.

Many gamblers already believe that slots and slot jackpots are somehow "fixed" and that bosses know when machines are due to "hit."

"The hardest challenge is perception," said Joe Bertolone, chief of the state Gaming Control Board's technology division, which tests new machines.

"You wouldn't believe now many phone calls I get about the 'little green men in the box,' " he said.

In Nevada and other casino states, slot machines are governed by computer chips that determine a random outcome. By physically changing the computer chip in each machine - a process that can take hours for multiple machines and involves notifying state regulators - slots can be modified to pay out a certain percentage of bets over tens of thousands of hands.

Nevada regulations allow casinos to download new odds - along with new games and denominations of games such as pennies, nickels and quarters - over a period of about eight minutes.

For the majority of players, a 1 percent difference in payback percentage is negligible - a number noticeable mostly by the mathematicians hired by slot companies to test the devices.

For casinos, however, a change indistinguishable to the masses can mean millions of dollars in increased revenue over thousands and thousands of spins. Systems enabling two-way communication between a machine and centralized server also can cost millions of dollars.

Casinos are still figuring out how to use the systems to boost long-term profit rather than simply pay for itself after a few years, said Richard Haddrill, chief executive of slot maker Bally Technologies.

The benefits of today's systems may be overblown, he said. Gamblers can already choose between several varieties of poker games and denominations on one device, for example.

Choosing between hundreds of potential games may be overwhelming for players, although having casino bosses pick and choose games can more effectively weed out underperforming themes, making casinos more efficient, experts say.

The faster, more advanced systems companies are developing over the next couple of years will appeal more to gamblers and therefore make more money for casinos, Haddrill said.

As early as next year, some manufacturers expect to introduce systems that can greet customers by name and offer discounts to favorite restaurants.

Future systems also will also be able to create on-demand tournament games, offering side jackpots for those who opt into competitions with players gambling elsewhere in the casino.

The transformation won't occur overnight. Software upgrades that take a few months to implement in other industries can take at least two or three years for casinos, highly regulated businesses with rules that differ by state. Gaming equipment makers are just starting to work together to develop compatible systems - an approach taken by engineering firms in other industries to spur innovation and growth.

One game tester described the process as "flying the space shuttle with a compass," Bruce Rowe, a gaming consultant and former Harrah's executive, said at the conference.

"The technology is there. We just don't know how to manage it yet."