Hitting the SLOTtery

January 14, 2008 3:24 AM
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Can’t get enough slots? Well, hold on to your coin purse. Thousands of additional slots are headed for U.S. casinos over the next few months.

As of January 1, the U.S. had 767,418 electronic gaming machines in operation, an increase of 6.4 percent from a year earlier, according to Casino City Press, an industry publication.

The country now has slots in 37 states — up from 31 in 2000 — and the equivalent of one machine for every 395 residents.

The numbers will increase over the next few years. More than 100,000 new slot machines already have regulatory approval or could get it this year:

”¡California. Voters decide Feb. 5 whether to approve a deal to allow 17,000 new slot machines at tribal casinos.

”¡Maryland. Voters in November will decide whether to allow 15,000 slot machines at racetracks.

”¡Florida. The federal government last week approved Gov. Charlie Crist’s deal with the Seminole tribe to expand its seven casinos and add Class III slots.

”¡Kentucky. Gov. Steve Beshear has made a statewide referendum to legalize slots a top priority.

Massachusetts and Texas legislators will consider slot machines this year. Ohio, where voters rejected slots last year, is the only large state without slots or an active push to get the machines. Indiana, Kansas, New York and Oklahoma are among states that will dramatically expand slots this year or get them for the first time.

The reason for the sudden legislative interest in legalizing slots is simple: They are a quick, clean and easy source of revenue for state governments. The weakening economy has slowed state revenue growth to its lowest level in five years. States get $8 billion a year in gambling taxes and fees, spending it on education, economic development and other programs. Unlike lottery proceeds — often reserved for schools — most states give legislators free rein on how gambling revenue is spent.

Also, the success of Pennsylvania’s new slot machines has attracted national attention. The state took in $580 million in slot machine revenue in 2007, its first year of gambling, and only 12,000 of the maximum 61,000 slots are operating.

As states continue to approve new slot machines, new and younger customers surface to play them.

"For people who’ve grown up using computers and playing video games, today’s slot technology is like second nature to them," Andrew Smith, research director of the American Gaming Association, told USA Today. "Slots are especially popular in rural, less affluent markets where many new, smaller casinos are being built."

In addition to more slot machines, gamblers can expect a wider variety of games.

"We’re trying everything. Anything for a hit," Ed Rogich, vice president of marketing at International Game Technology (IGT) told USA Today, adding that IGT introduces hundreds of game variations a year. That includes themes related to Star Wars, I Love Lucy and Elvis.

By the end of 2008, the industry’s latest technology — server-based slot machines — may begin to appear in Nevada casinos. The technology connects "generic" slot machines with a central computer that can change the game, denomination and payback percentage from a central server.

The payback percentage — the amount of money returned to players — determines how or "loose" or "tight" a slot machine is. Obviously, players want to play on the loosest and payback percentage from a central server.

The payback percentage — the amount of money returned to players — determines how or "loose" or "tight" a slot machine is. Obviously, players want to play on the loosest machines because more of the money bet is returned to the player.

Sot machines typically pay back 85 percent to 98 percent of the money that gamblers put in. In Nevada, the average is 94 percent for the gambler and 6 percent for the casino. The casino’s share — worth $8.5 billion last year in Nevada — goes for profits and expenses, such as wages and taxes.

Most hard-core, gambling experts say other casinos games — blackjack, craps and poker — are better bets for players because skill and strategy can increase the players’ chances to win.

Michael "the Wizard of Odds" Shackleford, a gambler, former Social Security actuary and author of Gambling 102, suggests staying away from the tightest machines.

It also makes a difference where you play slots. In Las Vegas, for instance, the tightest slots are located on the Strip, while the loosest slots are downtown.

For example, nickel and quarter slot machines return 91.66 percent and 94.60 percent of the money played in downtown slot machines, while the same slots on the Strip return 88.53 percent and 91.48 percent, according to the latest Gaming Control Board revenue report.

The lowest paying slot machines in Nevada are the statewide progressives, which work like state lotteries: a portion of losing bets from many gamblers are rolled into ever-larger jackpots that can exceed $10 million.

These "Megabucks" slot machines put back only 87 percent of money into the prize pool.