adam @ 404

One of my New Year’s resolutions is to learn a card game well. Yesterday, I went down to the Central Library to find some books to read on card games. Looking through the Games section I found a book, “Slot Machine Strategy: Winning Methods for Hitting the Jackpot.” My first response was to laugh; I had to read this book.

It’s a quick read, written in an, at times, war story-like style by a “slot veteran.” Even after reading it, the skeptic in me thinks some casino owner union paid the author with the golden pseudonym, Macintyre Symms, to write a book to give people enthusiastic hope that there is actually a winning strategy to a game that is probabilistically stacked against them. The other part of me thinks that somewhere past the cheerleading (”be proud of slots”), annoying over-reliance on anecdotal evidence (especially in the case study section where someone is quoted as saying “slot machines are a lot like the stock market”), and seriously obvious common sense (e.g. don’t gamble on illegal machines or do illegal stuff) , there are some pretty keen tips and observations about the business of slot machines that build a general strategy of slot machines.

The number one reason I think the book is leading people astray is that it doesn’t reinforce the idea that in fact the odds are always against you when playing the slots. It’s truly a gamble and chances are you’re going to lose. If you want a better bet on earning money, go invest in bonds or mutual funds or better yet, work instead of going to the casino. It is mentioned in the book that casinos wouldn’t have slot machines if their aggregate returns didn’t turn a profit on total plays, but it isn’t stressed that every single machine (unit of gambling/dealer) on the floor is going to return a profit over time (even factoring in fixed-costs like the building and machine itself). No matter what machine you play, the odds are against you. Chances are going to be better on certain table games, and in some cases, they can actually be in your favor. But in those cases, the casino can rely on free alcohol, variable pacing, quick talking dealers, wait staff and other elements to serve as distractions to confuse and throw-off gamblers of these thinking games. There are relatively few of the same effective distractions in the “mindless” world of the slots.

Below are my initial takeaways from the book, categorized:

Gambler Returns Enhancement (Damage Control)

Keep in mind that enhancing returns will never give the gambler an advantage against the house.

• Play the cash value (number of coins) that maximizes the return. This happens in multi-coin slots that offer jackpots for a certain thresholds of coins per play only. It also happens on multi-coin slots that offer multipliers per extra coin entered ( X 3 per extra coin as in 1-3-9). Multi-coin slots seem to just be a way for casinos to get cheapsters to give themselves suboptimal returns. Note that some multi-coin slots don’t offer a better pay-out given more coins per play (as in payoff of 2-4-6 for 1, 2 and 3 coins). To simplify, just avoid multi-coin machines unless that machine has been proven as having a higher return than others from a reliable source.
• It has been documented by state gambling boards that higher bet machines have better returns. For example, there are better returns for a $1 machine than a quarter machine. The author surmised that this might be because those playing these machines expected better results for their money and would get more irate if they didn’t win, so the casino adjusted the values. My guess is that its pure market economics for the casino: If you bet more money, they can afford to give a larger return rate since they are making a much larger top line per spin (which could act as a positive reinforcement for higher betting behavior). I’m not proposing you loss/spend more money on gambling (you should maintain a max loss per visit limit), but spending more per spin/bet may yield better chances. If you spend 4 times coinage per spin, you might think about making less spins per visit, else your net loss is potentially more. See: Why do the rich keep getting richer, except when playing slots?
• If a machine has a good return value but the largest portion is devoted to extremely low probability combination(s) (Jackpot-only machine), then the return value is a relatively meaningless marker to anyone except those only hoping to win really big (in one of their nine lives). It’s probably safe to bet that most machines aren’t this way, offering the majority of the return in results that will happen enough and at moderate levels to keep people at machines.
• If you’re playing progressive slots with an increasing jackpot, find the machine or bank of machines with the highest jackpot as it is just as likely to hit as lower jackpots of other progressive machines. Given two progressive machines with the same rate of returns without the jackpot value, the one with the higher jackpot will have a larger overall rate of return.
• This one’s a little shakier, but for progressive machines that are contributing to the same jackpot (banked progressive machines), it stands to reason that it is better to bet on larger banks of machines. The idea is that the likelihood of hitting the jackpot is quite small but equal for each machine in the bank regardless of the number of machines in the bank. If more machines are contributing there is either going to be a potentially larger jackpot (highest pay-out) and higher return, or each machine is going to be contributing less of a percentage to the customer jackpot which leaves more of the bet to be returned by moderate and more likely winning slot results. In essence, a large bank of progressive machines mean better returns than a smaller bank with a comparable jackpot.

Myths Debunked

• Machines don’t go through hot and cold phases. Their returns are pre-programmed or changed via hardware/firmware updates on periodic basis that require a technician. This one is important folks. State gambling boards would probably have a field day with this if it were any different.
• The book talks a lot about how to observe ‘tight’ and ‘loose’ machines, or those with bad and good returns respectively. Which is strange since there’s a section on the math of returns. I think for the most part this only serves to drive people into the casino to spend money while trying to figure out these two types of machine types via participant observation. The only surefire way, short of buying and installing the machines yourself, to determine the return rate of a machine is to know its pay outs, and know the probability of each of those pay outs. The next best method is to play the machine a lot, record each spin and, through this large sampling, estimate probability of results and match that to pay-outs. The next best method: talk to the change-making employees who probably stare at these machines day-in and day-out. But walking in over the weekend and determining a machine’s looseness through personal observation is simply a myth. The existence of variable returns between machine is not a myth though, which leads to the next section on reverse engineering casino strategies based on consumer behavior and psychology.

Reverse Engineering Casino Strategy or Reasoning Casinos As Strategic Businesses

I find this aspect of slot machines the most interesting since it explores the true nature of Casinos: they are a business. They use psychological techniques on crowds and individuals to get people to buy, and make decisions based on consumer behavior and psychology to maximize profit. These tips are based on guesswork for once again doing damage control.

• Slot players have a convention of playing two machines at once. There is an etiquette of not playing more than two though. Don’t ask me why. Casinos have observed that these two machines are usually next to one another, with this they have alternated low and high return machines next to one another. The advice here is to never play more than one machine at once to avoid this trap of machine locality.
• Novelty machines, don’t play ‘em. They’re just like the impulse purchases at the check out line. Impulse purchases always have a great rate of return for supermarkets because people don’t think much but move on the novelty or impulse of the moment. The same applies to any novelty machines in the casino, which are often those big ass machines (Big Bertha) in the entrances of casinos with a lot of foot traffic.
• The casino wants others to see people when they win. It’s intensely motivating for other gamblers to see someone win. There are exclusive, dark poker rooms, but guess what, there’s no such thing for slots. The point: don’t play slots in dark corners, or too far away from other gamblers that only a few people would notice an ecstatic winner. It was also mentioned that table players are annoyed by slots, and especially slot winners but I find this reasoning less cogent. In my mind, everyone loves a winner.
• It’s true. When you play slots, you are paying to play. The only difference is that in this case, the you is the aggregate customer, since through chance some individuals are ultimately paid to play. If the laws of competition driving down prices holds true for casinos, then that aggregate cost to consumers should go down. For this reason, gamble in places you can shop around, places where there are competing casinos. If a casino has a local monopoly, there are fewer reasons to give good returns to a captive audience of slot junkies. Also, look for slot salons that get a larger percentage of their profit from slots than do resorts and hotels, especially if they are accessible near one another. The salons rely on slots as their bread and butter and they can’t afford to be beat out by businesses with multiple channels of revenue especially captivating accomodations.

Common Sense of Gambling

• Read the machine instructions first so you know what you’re playing
• Don’t let anything rush betting decisions. Ignore timers, bells, etc…
• Before going to the casino floor, determine your absolute loss threshold per that visit and stick to it.
• Quit the visit to the casino floor as soon as you’re winning. If the odds aren’t in your favor and you’re temporarily beating the odds, it’s highly likely that the odds will reinstate their fascist reign of terror sooner than later. My addition to this is that this really only matters if you’re playing to firstly win, and secondly have fun. If fun is the only return you care about, then it doesn’t much matter. I might add that if you’re winning by enough and you quit while you’re ahead, use those winnings as your seed money for your next gambling visit and hope lady luck stays on your side.

The book has more, but that’s really the core stuff. It’s a lot to think about for something that at the end of the day will probably not pay off though. I really need to learn that card game… for fun.

This entry was posted on Monday, January 28th, 2008 at 12:04 am and is filed under Personal Journal, Tech and Science. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.