Machine gambling is essentially a house-banked gambling operation. Certainly the player is wagering against a machine. As many states have lotteries or allow only games such as bingo that are played among players, the states have sought to keep Native American tribes from having slot machines of the type that are found in casinos. For instance, in California, the state spent a decade fighting the tribes, insisting that the tribes had to have only machines that were linked together so that players had to electronically pool their money, from which 95% – or some percent – could be awarded as prizes. Only the voters who passed Proposition 1A in March 2000 were able to change the situation, and now by popular approval, the tribes have slot machines. In the state of Washington many tribes agreed to have these pooled arrangements for their machines. Although the state may seek to find some legal technicality that makes pools acceptable and regular slot play unacceptable, the players will have a hard time telling the difference. Moreover, the state is doing a major disservice to the notion that the player should be given an equal chance to make the big win on every play as he is in Las Vegas, rather than having a list of winning prizes that diminishes every time a player takes a win. In Las Vegas and other places with regular slot machines, the machines have random number generators that are activated with each play. The player has the same chance of winning a jackpot, a line of bells, bars, or other prizes with every single pull, and the casinos could conceivably lose on every single pull. It is called gambling, after all.
The reality is, however, that the law of large numbers applies to slot machine play, and the payout rates are very consistent over time. Table 1 shows the rates of returns for each of the casinos in New Jersey, Illinois, Indiana, and Iowa over each month of 1999. Even if the state mandated a specific return, as it does for a lottery or for a bingo game, the returns could not be much more consistent. Note that some states and casinos have better returns than others – actually Las Vegas casinos offer the best returns – consistently over 95 percent. In no way does the different return amount come from any manipulation of the computer randomizer chip in the machines. Quite simply, it comes from the payoff schedule. Two machines can have exactly the same play dimensions, but payout percentage returns to the player can differ greatly simply by setting the win for a certain configuration (say three bells) at 18 rather than 20, or on a poker machine making the wins for flush and full house 5 and 8 instead of 6 and 9. Sophisticated players know the machines, and they can discern the best payout machines by simply looking at the prizes listed on the front of the machines. For obvious reasons, payoffs are better at the higher-denomination machines. A five-cents machine may cost as much to buy as a dollar machine; therefore the casino expects that it needs to hold a higher percentage of the money played on the nickel machines. Actually today all the big casinos have very high denomination machines; indeed, several have machines that take $500 tokens in play – and to win the best prizes on these machines, the player has to play three coins a pull – you would not want to make my mistake on a $500 machine.
Machines have appeal to both the player and the operator. In most cases they can be played alone. The player can study the machine before playing it. It is rare that a player will criticize the way another one plays (I enjoyed one of those rare moments), and with a little study the machine playing is easy to learn. Operators like machines because they do not involve much labor, they are very secure (although cheating has been a historical problem), and they can be left alone to do their job without complaining.
Machine play is the bread and butter for most casinos around the world. Machine gambling offers opportunities pursued by many lotteries and offers the golden hope (or silver bullet) that many feel can save the racing industry. Machines have also crawled into Nevada convenience and grocery stores, and if policymakers allow them, they will be in bars and taverns across the country, all across the globe. It could easily be predicted that machine gambling is the wave of gambling in the future, but now the Internet has come onto the scene, and perhaps it is that machine that will soon be the most lucrative and alluring gambling device.
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