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Are Slot Machines Getting Tighter?

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  • Are Slot Machines Getting Tighter?

    In our August newsletter we ran the below story by gaming writer Bill Burton:
    Are Casinos Lowering Their Slot Machine Payback Percentages?

    Casino gambling author Bill Burton discusses some of the most popular myths about slot machines and if casinos really lower the payback percentages on their machines.

    In response to that article, I received an email from an old friend of mine, Rick Alm, who was the gaming writer for the Kansas City Star before retiring a few years ago. Below is what Rick wrote to me about his experiences with slot machines in the Kansas City area.

    Bill Burton’s observation (reproduced below) in the latest ACG Newsletter may well be true as a reflection of some overall national trend. But I do know that it is not true for Kansas City. For 15 years now I’ve been tracking the monthly payback rates for Kansas City’s casino slots. And there is no doubt that these days the vast majority of slots here are tighter.

    My research charts a running six-month average payback rate for penny, nickel, quarter and dollar slots at each of the KC market’s four casinos (Ameristar, Harrah’s, Isle and Argosy) to determine the “loosest” casino for each denomination. When I worked as the casino reporter for The Kansas City Star I updated and published this data every month. I’ve continued to maintain the charts since retiring in 2009.

    When I went to my charts this morning to test Burton’s conclusion, here’s what I found in a comparison of running averages for the KC market’s loosest casino for each denomination in June 2005 versus June 2011:

    Penny slots: 90.4216 % payback in 2005 versus 89.4000 in 2011. Tighter by 1.0216 percent.
    Nickel slots: 92.0166 % payback in 2005 versus 94.2633 in 2011. Looser by 2.2467 percent.
    Quarter slots: 94.0883 % payback in 2005 versus 93.5933 in 2011. Tighter by 0.495 percent.
    Dollars slots: 95.4283 % payback in 2005 versus 93.3833 in 2011. Tighter by 2.045 percent.

    Overall, Missouri’s entire inventory of electronic gaming devices (including VP) appears to have tightened during the same time span, from a statewide average of 92.146 percent reported in June 2005 to 90.888 percent in June of this year. That’s 1.25 percent tighter.

    But even if the slots are a bit tighter gamblers probably shouldn’t be feeling too fleeced if they consider that inflation has been growing at a 2-3 percent annual rate for years. According to the U.S. Bureau of Labor Statistics, a gallon of whole milk that cost an average $3.12 in June 2005 cost $3.62 in June of this year. That’s a 16 percent bump in the price of merely wetting your Wheaties. On the other hand, whose income is keeping up with inflation?

    (BURTON’S QUOTE: Many of the gambling jurisdictions around the country require the casinos to report the overall payout percentages on a monthly basis. (California is not one of the States) These figures are a matter of public record and are published in some newspapers and gaming publications. I looked back on these figures over the last year and saw that there was very little change most casinos around the country. In some instance there was even some of the payback percentage had increased.)

    Rick Alm
    Kansas City, Mo.

  • #2
    Re: Are Slot Machines Getting Tighter?

    Yes and when will it stop? Inflation is one thing, but it doesn't make much sense for a slot machine, especially since table games never seem to change. This I predict will one day lead to a crash of the industry, since they take the same belief the housing markets did thinking they can just take more and more money. Eventually this source will dry up. A long term slot payback chart would be very interesting to see and to push it out 20 more years to see if this is realistic and not just theoretical.