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Slot trends favor more
high-tech games

Oct 21, 2003 3:27 AM

Over the past few years, casino customers have seen a dramatic change in their beloved slot machine. Besides going from reel spinning, one-armed bandits to high-tech video gaming machines, the modern slot has become an entertainment center with bonus features, stereo sound, advanced graphics and ticket-in, ticket-out (coinless) technology.

If last month’s G2E is any indication, those trends should continue, as well as others such as the accelerated turnover of slot games in a casino, the expansion of wide area progressives, the proliferation of coinless slot systems, and the onslaught of multi-line, multi-coin low denomination slot machines, such as penny and two-penny slots.

The notion that a casino’s slot machine inventory is turning over at a rapid rate is good news for players, as well as the manufacturers.

Customers like to see new machines on the floor because it gives them something new to play. And manufacturers obviously like to replace machines on the floor because their sales are increased.

The result is a slot floor that is "younger" than ever. "We are rapidly replacing many of the machines that don’t seem to attract customers any more," said the slot manager at an off-Strip casino. "Of course, there are a few old stand-bys. But the floor is about 50 percent filled with machines that are less than two years old."

The replacement cycle for slots on the casino floor took a dramatic turn last year. Surveys indicated that 26 percent of floor managers said over half their machines were five years old, a significant increase from 2001, when 41 percent indicated their slot floor was more than five years old.

Additionally, reports indicate that casinos plan to replace a large percentage of games this year. In 2003, 38 percent of casino managers polled said they planned to replace 15 percent of their games versus only 24 percent who said they would replace 15 percent of their inventory in 2001.

Although "coinless slots" is still a relatively new casino phenomenon, they could be the norm in virtually all U.S. casinos within at least three years, according to the president of the world’s largest slot manufacturing ­­company.

"I would say the three-to-five year time frame is probably a good one," said Tom Baker, president and CEO of International Game Technology (IGT). "That’s probably a timeline that makes sense for the roll out of cashless (slots)."

The transformation from coins to tickets in North American casinos got a huge lift a few weeks ago when Harrah’s announced it was purchasing 11,000 new slots from IGT, and would retrofit them with a ticket-in, ticket-out system it developed with Alliance Gaming.

Baker said that the number of casinos using ticket-in, ticket-out technology will dramatically increase as casinos seek to replace their slot inventory, which on average, have a shelf life of four to five years.

One of the concerns of casino operators has been whether long-time customers would accept tickets instead of time-tested tradition of collecting coins from the slot machine’s hopper.

"The IGT ticket-in, ticket-out systems have been very well-received by our customers," said Mark Sterbens, casino manager at Terrible’s Casino. "Slot players like the idea of not having to cash in and out, and it makes it more convenient to move from one machine to another."

Terribles, which opened two years ago, has about 750 gaming machines, most of which are ticket in, ticket out.

Other casinos that have opened in recent years have also started operations with cashless slots. They include the Suncoast, the Cannery, Tuscany, Green Valley Ranch and MonteLago at Lake Las Vegas.

Wide area progressives

Wide area progressive slots, such as Megabucks and Wheel of Fortune, seemed to reach a peak a couple years ago, but recently there has been renewed interest in these games, which could expand dramatically this year with new players such as Aristocrat and Bally’s.

In a survey this year, about 40 percent of slot managers said they intended to devote 6 percent of floor space to wide-area progressives, a number that was up from 30 percent of managers polled last year.

The decision to devote space to progressives is based on the perception that people like to play them: about 55 percent of slot managers said these slots are more popular than non-progressives, as opposed to 48 percent who felt that way last year.

The newest player to enter the progressive race will be Aristocrat, which could have a system up and running by early 2004.

A wide-area progressive from Aristocrat would be a nice complement to the new games the Australian-based manufacturer unveiled at last month’s G2E.

Low down on low rollers

Not long ago, the nickel slot machine was considered the ugly duckling of the casino, which kept just enough of them to satisfy bankroll-challenged players who were content to plug away, a nickel at a time.

Well, times change, and so have the fortunes of nickel slot machines. In Nevada, players annually wager nearly $20 billion on nickel slots, a staggering 500 percent increase from the $4 billion bet in 1990.

Moreover, nickel machines swallow about 22 percent of all money wagered on Nevada slots, compared with only 6.6 percent in 1990.

The bottom line for Nevada casinos is that the ugly duckling has evolved into a cash cow. Casinos win about $1.5 billion a year on nickel slots, a 37 percent increase over the win in 1999.

So how did this unlikely metamorphosis take place?

The nickel slot’s rise to prominence is the result of two factors.

First, manufacturers developed electronic games that accept a much wider range of bets than their mechanical ancestors. The range of bets now available on nickel slots can be anywhere from 1 to 90 coins (5 cents to $4.50), although the industry standard has become a maximum bet of 45 coins ($2.25).

Secondly, manufacturers are building much more compelling games. Starting with WMS Gaming’s "Monopoly," modern slot machines typically feature brilliant graphics, stereo sound effects, bonus rounds and usually an interesting game plan to keep customers interested.

In addition to the new wave of multi-line, multi-coin machines, multi-game machines have helped fuel the popularity of nickel play.

"With the new machines, players are betting up to 50 hands of video poker at once," says Steve Weinberg, an analyst with the Nevada Gaming Control Board. "Over the last three or four years we’ve seen the rising popularity of multi-game machines helping to stimulate increase in gaming win for nickel machines."

Clearly, Weinberg adds, the nickel machine is no longer strictly for low-­­rollers.

"Players are dropping in $20 bills at a time," he says. "It doesn’t seem to matter they’re playing nickel machines. The public continues to eat them up."

In the very near future, nickel machines will be seriously challenged by penny slots, which are beginning to appear in casinos in significant numbers.

Penny slots, according to Aristocrat executives, account for the majority of gaming machines in some jurisdictions outside North America, and in time they will find a sweet spot in the heart of U.S. players as well.