DAILY MEMO: GAMING:

Penny machines have growing appeal, but also a price

Sam Morris

Gamblers play penny slots at South Point. These games allow players to win more often, but ultimately hold more for the house.

By Liz Benston (contact)

Monday, Sept. 14, 2009 | 2 a.m.

Headlines from the Vegas gaming industry

Strip gaming revenue falls for 19th month (7-29-09)
Nevada casinos find that profits from penny slots really add up (3-7-08)
As slots get tighter, so do some retirees (10-3-08)

The media have focused on penny slots as an increasingly popular form of entertainment for newly budget-conscious players.

The image of pennies supplanting quarters and dollars resonates in this economy, but, in fact, penny slots represent a technological transformation that began years before the recession and continues, though at a slower pace as casinos can less afford to replace older slot machines.

Much like the MP3 players and high-definition flat screens that have overtaken CD players and big-box TV sets, penny slots have replaced older slots that were configured to accept a minimum of a quarter or dollar per bet.

Penny slots contain electronic wizardry that allows the addition and tracking of dozens of paylines that zig and zag across a digital screen. Whereas machines in years past might have required a minimum bet of a quarter, many now offer bettors the chance to wager as little as one cent on each of 25 paylines — each one offering an opportunity to win a small prize.

Given the choice of betting a dollar to line up three or five symbols in a straight line or spreading the same money across 100 paylines, many gamblers will opt for more bets. The option is much like being able to bet multiple hands of blackjack at once but without the hassle, as these devices automatically place, track and pay bets like any slot machine.

These devices seem to be a win-win for players and casinos — boosting the bottom line while hitting more often than the slots of old.

But penny slots, according to state revenue figures accumulated over the many years these slots have been in use, tend to pay back less of gamblers’ money over time than single-denomination games requiring a higher initial bet.

Statewide, the difference is a return to players of roughly 95 percent for higher denomination games vs. 90 percent for penny slots.

For Nevada casinos, which live and die by these averages, lower-payback games can add millions of dollars in profits each year.

This difference is virtually meaningless for most slot players, as even lengthy gambling sessions aren’t long enough for the theoretical return of any particular slot game to emerge. For players, more paylines simply mean more chances to win, which means they will hit more often.

Netting a win is another matter.

Players rarely bet a cent per spin, which makes the “penny slots” name a creative marketing gimmick but one that doesn’t fool gamblers. Rather, most players will bet several pennies per spin, often maxing out multiple paylines for a shot at a bigger jackpot.

Casino managers know that so-called penny players are just as likely to be high-rollers as penny-pinchers. The Bellagio, for example, offers “1 cent” machines steps away from some of its finest restaurants.

A typical penny game might cost as little as 25 cents for an initial bet. But many players are betting at least a dollar per spin and sometimes $3 or more — well above the minimum requirements for quarter and dollar-denomination machines.

Yet even the popularity of multi-payline video slots can’t make up the revenue casinos have lost in the recession.

Gamblers wagered $20.1 billion less on slot machines in Nevada for fiscal year 2009, which ended June 30 compared with a couple of years ago — a figure that underscores the state’s financial woes more than any other single statistic.

It’s also a sign of just how many gamblers have switched to newer games, as that drop includes a $3 billion increase in wagering on penny-denomination slots over the same period and a drop of $3.3 billion for so-called multi-denomination games that offer several games on one machine, often including penny slots.

Rather than maxing their bets, some gamblers are spending less per spin. People who traditionally bet a dollar per spin might bet only a quarter — or nothing at all.

Slot manufacturers like International Game Technology — which says it isn’t devising new games with the economy in mind given the ease with which players can change their bets — has yet to figure out how to make a recession-resistant slot machine or one that is guaranteed to attract new players.

Discussion: 32 comments so far…

By melbedewy

9/14/09 at 6:03 a.m.

Suggest removal

Lousy payout slots can be found all over the world. To draw people back to the state the legislature should require ALL slots to have a minimum 97% payback.
By Rocco

9/14/09 at 6:16 a.m.

Suggest removal

you rarley win anything on these...
By mr23257

9/14/09 at 6:27 a.m.

Suggest removal

Any serious VP player knows that there's only one game to play --- 10/7 draw poker, in $1, $5, $10 or $25 denominations.

Anything else is a fool's wager as 10/7 draw returns the absolute best odds.
By acesbet

9/14/09 at 7:33 a.m.

Suggest removal

Try 97% for (30) to come up with a statistical figure.

Ho Hum (Harvard Graduate)
By tvegas

9/14/09 at 9:13 a.m.

Suggest removal

If you ever watch the dolts that play these machines you will see that they have no idea that they are being taken by the casinos.

Lots of lights and noise amuse them..like babies watching a mobile.
By JoeF

9/14/09 at 9:18 a.m.

Suggest removal

I would not call anyone that plays slot in this city "dolts".

I lost interest in playing when Las Vegas casinos became penny arcades. Also, I hear that the penny machines are the new $5 machines.
By tvegas

9/14/09 at 9:26 a.m.

Suggest removal

Sorry JoeF

If you play slots you are a dolt.
By davidwayneosedach

9/14/09 at 10:37 a.m.

Suggest removal

This is an interesting gaming evolution. But how much can a player lose playing penny slots in one session? Would this be equal to or less than 25 cent and $1 slots?
By PeterGun

9/14/09 at 10:57 a.m.

Suggest removal

To call somebody playing penny slots a "dolt" is a little out of line.

You could basically call anybody who gambles on any game a "dolt" when it comes down to it.

99.9% of people who gamble lose their money so why are you singling out penny slot gamblers as "dolts"

Gambling is not healthy to your pocketbook no matter what game you are playing.

No game is designed to let people make money. The games are designed to make the casinos money.
By revbobdobbs

9/14/09 at 11:14 a.m.

Suggest removal

I think the name of the slot bank kind of says it all.
By Det__Munch

9/14/09 at 12:25 p.m.

Suggest removal

tvegas
YOU obviously dont' know how to PLAY a penny slot machines, or maybe you play and never win. You can win money onthese things with just $20. I've won as much as $300 with just $20 and I was playing with that $20 quite a while.

And you can also lose that $20 quickly too and not just on penny slot machines but 25 cent, 50 cent and any other game in the casino. that's why it's called GAMBLING.

Callin people 'dolts' is uncalled for. And tacky.
By tvegas

9/14/09 at 12:59 p.m.

Suggest removal

Obviously you guys have no idea of the hold on these machines (not just penny but any slot)and are therefore the dolts I was referring to.
By Harley

9/14/09 at 1:09 p.m.

Suggest removal

Casinos are nothing but adult arcade parlors, while it is a historical fact according to the Nevada gaming revenue numbers that the penny-slot machines offer the best percentage holds for the house i.e. worst payouts for the player.

Typically, the higher the machine's denomination the lower the house hold, while the converse is true.

All the bells, whistles and color monitor images merely attempt to enhance the appeal and amusement factor of the experience at an additional cost to the consumer -- making it more "fun" to lose?

LOL : )
By BorisR

9/14/09 at 1:15 p.m.

Suggest removal

What do you guys think of the Optimum Play banks? DD bonus looks like a break even game there, but the deuces wild game must be ok with 100.60 per cent. Am I wrong with that?
By tvegas

9/14/09 at 1:21 p.m.

Suggest removal

Boris

OK if you MUST play anything other than live poker
By Det__Munch

9/14/09 at 3:34 p.m.

Suggest removal

tvegas
NO ****! Like we don't know this. And no amount of banging on the buttons or touching the screen is going to change anything. the RNG is already set and ONLY the slot maker can go in and change the RNG at the request of the casino. all the machines are set in the factory and the RNG is the same on the same machine in every casino unless the casino requests it to be changed. We're not dolts. We all get it.
By formervegas76

9/14/09 at 4:59 p.m.

Suggest removal

95% and 90% payback, lol
By spocanon

9/14/09 at 4:59 p.m.

Suggest removal

Slots, as any casino game, are for entertainment, and a game of chance. If you think you are going to win or beat the machine you are wrong. I have paid many $20k jackpots, but have seen many more losers. I have been in the slot biz for the past 6 yrs and have seen too many sad sad stories. It is not the casinos fault that you don't win. They are a business and in business to make money. If you don't like the odds, then don't play. Personally I prefer the sports book.:)
By billykydd

9/14/09 at 6:49 p.m.

Suggest removal

Well Tvegas,it's these dolts they help keep Vegas afloat. When people come on vacation they like fun. They are not all odds crazy. Lighten up and stop insulting others who are not such a successful pro as yourself,(who happens to be posting on a message board?)
By Bakersfield

9/14/09 at 9:27 p.m.

Suggest removal

I never liked these cartoon machines. Too many choices, options, etc. I never even cared for the multi line machines. The 3 reel, single line machine is my game of preference, (usually 4 reels on the progressives). But even there, I limit my gambling. Do they still have the "nevada nickels" progressive game? I once went to the Frontier, bought 2 rolls of nickels, played for 3 hours and cashed out 28 bucks in nickels. Good cheap entertainment, even if I hadn't had the small "win". My preference are the double diamond with the bonus clicks and the Haywire machines. I've never taken more than $50 from the slots, but I've never left more than $20 at a sitting either. Low roller all the way!
By saltydawg

9/15/09 at 6:44 a.m.

Suggest removal

The penny slots are fun to play but I hardly ever win in the long run. My wife, however, usually breaks-even or wins. She claims she can tell when the machine is getting really to pay. To her, the games are pure entertainment and she is constantly looking for new games.
By scoopie

9/15/09 at 9:16 a.m.

Suggest removal

Regarding Optimum Play machines..
my son has been playing Deuces Wild for quarters and has tracked his winnings/losing/hands played/etc. for a year. He (not including comps, points earned on club cards) has made more money than I do working! But, you have to be very disciplined, accurate (he uses the Bob Dancer method) and patient. There are many losing days, but multiple pay days also.

Suncoast, imho, made a big mistake in taking out their Optimum Play deuces. They exited a few people who do play at 100%, but they also got rid of me, who is not quite at 100% and would play penny slots if I won at Optimum or got bored watching the paint dry :-).
By rabiablue

9/15/09 at 12:33 p.m.

Suggest removal

Okay, so first this article is not exactly correct. The average setting is not 90%.
Pennies are set as such:
87 to 88% setting on the strip. Yes, 87% to 88%
Off strip up to 90% for pennies.
Dollars run from 90% to 92% on strip.
5 Dollars 92% to 94%
10 Dollars 94% to 97.5%

Sorry folks. just wanted to be accurate here.
As for the the max bet on pennies, I've seen as high as 100 lines x 5 per bet. So, 5 Dollars on a penny machine. Pretty damn high.

If you're betting a dollar or higher go to a better set machine. You're money will last much much longer. a 2% difference in setting is exponential so your funds will last approximately TWICE as long, not simply 2% longer.

Of course, enjoying gambling as I do, do whatever you want as long as your having fun, and can afford it :)

Best.
By adam1885282

9/15/09 at 1:54 p.m.

Suggest removal

Playing slots does not make you a dolt. Thinking you can PLAY slots in such a way to increase your odds makes you a dolt. Each event is entirely random. If it wasn't, it wouldn't be in the casino. People "smarter" than you or I would quickly realize patterns and bankrupt the casino if slots were anything but random.
As for "electronic wizardry that allows the addition and tracking of dozens of paylines that zig and zag across a digital screen," a 5-year-old Dell PC could do that.
By Det__Munch

9/15/09 at 4:20 p.m.

Suggest removal

"electronic wizardry that allows the addition and tracking of dozens of paylines that zig and zag across a digital screen

I dont even pay attention to those " lines".I think it's funny that when playing all the lines, you win some crappy amount like a $1 betting max line and 60-80 cents a bet. All that color and stuff and thepayouts suck! I move on from those machines. All pizazz and nothing else.

I've had people ask me how to play penny machines. I just tell them put in your m oney, press max lines and whatever amount you want to gamble (sometimes I'll explain how much the bet will actually be). I've seen people put in their $10, play max coins and then wonder what happen to their money afater just a few spins! sometimes they ask "how will I know if I win" that's when i bite my tongue and be nice to the tourists because if they can't figure it out then they shouldn't be in a casino gambling but my guess is the casinos LOVE people like that!
By Krases

9/15/09 at 5:03 p.m.

Suggest removal

The odds are tilted in the casino's favor with customers thinking of themselves as the exception to the statistical likeliness that they will lose?

I AM APPALLED. Now if you will excuse me, I have a rather short yellow school bus to catch.
By Det__Munch

9/15/09 at 7:44 p.m.

Suggest removal

with customers thinking of themselves as the exception to the statistical likeliness that they will lose

Doesn't everyone who gambles think like this? If we didn't, no one would be gambling here.
By BiscuitMKE

9/15/09 at 8:43 p.m.

Suggest removal

Whenever I visit Vegas (was there this past May), I use the Penny Slots as a 'break' from my normal gaming, which was once quarters and dollars but is now nickels and quarters. My partner and I find that playing pennies at a relaxing pace and betting a predetermined amount (9 lines x 2 or 9 lines x 5) gives us plenty of time to conversate and observe (when possible) the environment (people watch).

Even though Vegas has greatly changed over the past three years, I yet enjoy visiting the city. There still is NO PLACE like Vegas! So, bring on the Quarter, Nickel or Penny Slots... I will still visit and enjoy Vegas. It is PURE entertainment.
By Krases

9/15/09 at 8:52 p.m.

Suggest removal

Thinking of one's self as being the exception to the rule is common amongst all of humanity. That is why gambling will forever exist in one form or another. The only thing Vegas really does different is to add additional experiences on top of gambling such as enjoyable visual stimulus, tantalizing smells (most casino's add perfumes to the ventilation systems) and touch (other than the sports book, most gambling games are hands on).

A background in psychology can make one very wealthy in Vegas. Targeting specific psychological norms and exploiting them can make someone spend more, stay longer and return more often.
By Vegasvampire

9/15/09 at 9:41 p.m.

Suggest removal

All 99% of slot machine really don't hand you money, you get a ticket. So Penny Slots don't have pennies in them anymore, that is why all those billion ways to put on those slots are so fun. If you max bet on them, it will cost you somewhere between $1 to $5. They are like the Quarter and Dollars Machines when you look at it.
By BorisR

9/17/09 at 4:43 a.m.

Suggest removal

tvegas, I can't agree 100 per cent with your comments. You say that Optimum Play is OK if you have to play anything but live action poker. Look, we all know that live poker is a game mainly dominated by the right decision making. However, the casinos decided to implement the luck factor by raising the rake and taking off additional promotional dollars from every pot. A 1-2 no limit game with 10 per cent rake plus high-hand/jackpot drop plus the well-seen dealer tip is anything but beatable if the table set-up has not at least 3 donks. Especially the day games filled with retired locals with 25+ years of poker experience are anything but easy to beat. Pots are small, rake and tips keep flowing out of the players pool, and big action can't be seen that often.
Once you understand that you need the bankroll to play Optimum Play machines and that there will be weeks without the Royal, then this game can be just as profitable as boring live action poker with rocks from the neighborhood.
I think that live poker can be played profitably if you stay away from all low limit games. By that I mean anything below 15/30 limit and also 1-2 or 2-5 no limit. The 30/60 limit games at Bellagio and 5/10 no limit games at Bellagio and Wynn seem to be good but this is a game for somebody who has a 250,000 usd bankroll and enough skills in his repertoire to beat the game. Optimum Play, especially the deuces version with 100.60 per cent payback is more of a recreational game that gives you comp points (South Point/East Side Cannery) and is definetely less volatile than a 5/10 n-l game (live). The thing about poker is that everybody believes to be the best or a winning player. When you lose, it's always bad luck or suck-out, and when you win, of course, it's only skill. I am tired of listening to bad beat stories :)
Can you agree with me on that one?

Greetings from Switzerland
By BorisR

9/17/09 at 4:52 a.m.

Suggest removal

oh, i forgot one thing: There are so many poker books available in the market. Hard to find a book that also explains the rake/tip-problem. Must be some kind of an agreement that the casinos don't like it when the players discuss this highway-money-machine-method to skim the players' pool. It's fine to get the buffet comp or the dollar-per-hour being added to your card. However, the rake the players are paying, especially in the lower limits, are way to high to make it a winning game. I saw 2-4 limit games with a 10 per cent rake plus high hand bonus drop and then the players still (having to) tip the dealer the dollar out of a 14 dollar pot. Hard to understand for me how somebody can play in such a game and still believe that after 4 or 5 hours being at the table he possibly could be in the winning zone unless he has the session of his life....
summary: Before I'll go and play 2-4 limit under such conditions , I much rather sit down on an Optimum Play Bank and have fun with my 200 Dollars.
From Switzerland