Designing Slot Machines for Harm Reduction
- posted by Jim Leitzel @ 11:32 PM

The designers of slot machines are amazingly adept at prodding gamblers to have another spin. Are there any modifications that can be mandated for slot machines that would lower the harms that arise when gambling addicts interact with these machines, without appreciably diminishing the enjoyment of recreational gamblers? (Such mandates would be consistent with vice policy robustness.) Maybe. A November, 2005 article in International Gambling Studies reported on an Australian experiment which tweaked three features of slot machines, alone and in combination: (1) the maximum rate of play; (2) the maximum bet size; and (3) the maximum value of banknotes that could be read by the slot machine's banknote acceptor. (Previously it has been shown that allowing slot machines to accept banknotes directly (instead of coins or tokens or some such contrivance) is a good way to increase the amount that gamblers spend. Allowing smoking, too, seems to help.) As it turned out, most gamblers didn't even notice the different set-ups of the machines. (Each gambler played a control machine and a tweaked version.) Another finding was that problem gamblers -- after they played, the participants filled out a standard survey designed to uncover troubled gambling behaviours -- received less enjoyment from playing, relative to non-problem gamblers. Smaller bet limits combined with lower denominations for bill acceptors didn't appreciably reduce gambler satisfaction. There was a small decrease in enjoyment associated with playing slower machines. Nevertheless, there was no difference in players' reported interests in continuing to play the control or tweaked machines. In some settings, problem gamblers preferred lower maximum bets, even when recreational gamblers did not -- as if the problem gamblers are sophisticated about their control problems, and appreciate machine alterations that help them combat those problems or lower the harm from succumbing.

Labels: Australia, gambling, harm reduction, robustness, slot machine

 
US Military Gambling
- posted by Jim Leitzel @ 10:17 PM

Stars and Stripes has been investigating gambling on US military bases abroad. It turns out that in places like South Korea and Germany, there are slot machines located on-base:

The U.S. Army and Air Force generated more than $83.6 million in revenue via 1,191 slot machines in South Korea in fiscal 2007, according to data provided by the Army’s Family MWR [Morale, Welfare and Recreation] Command and the Air Force Personnel Center.

The Army, which also runs the machines on Navy facilities in South Korea, earned the lion’s share: about $73.5 million with 927 machines. As a comparison, the Army’s 1,550 machines in Europe, including machines the service runs on Air Force and Navy installations, brought in $38.5 million during the same time period.

South Koreans are not supposed to gamble on US military bases but it appears that some of that revenue did come from officially-ineligible Koreans. Some of the revenue comes from military personnel or family members who gamble pathologically.

At least one congressman wants to put an end to on-base gambling. I have some sympathy for that point of view, but I also have another suggestion. Require every person who wants to gamble at an on-base facility to have pre-committed to a daily, weekly, and monthly (and possibly annual) total bet limit. Rig the slots so that they only operate when the player inserts his card into the relevant card reader, so that the previously recorded betting limits can be enforced electronically. (That is, the betting limit cards are like "frequent player cards" that casinos use to track betting and to target freebies.) A gambler who is afraid of his own susceptibilities to addiction can then choose low limits, or even totally self-exclude by not acquiring a card with limits in the first place. This voluntary system is not foolproof, but it is helpful. If this suggestion is seen as too tepid, then the limits can be chosen by the military.

Back in 2005, the New York Times explored some of the problems associated with gambling on US military bases abroad.

Labels: addiction, gambling, Korea, military, self-exclusion, slot machine

 
There is a Limit
- posted by Jim Leitzel @ 11:30 PM

Just how much casino expansion can take place in the US before existing casinos begin to see a drop-off in their business? Today the New York Times has an article pointing out how gambling in the Catskills region in New York is doing poorly, partly as a result of competition from all those new slots in Pennsylvania. And yet a leading analyst of the gambling industry is quoted as saying 'The demand for gambling seems to be insatiable.' Well, insatiable sounds a bit too strong. Tomorrow's New York Times (ah, the magic of the web) reports that for the first time since legal casino gambling came to Atlantic City, revenues fell by 5.7% in 2006 [correction: 2007] at the resort's eleven casinos. But Pennsylvania took in significant revenue from its initial flurry of slots -- many more will come on-line soon in the Keystone State -- so other states are taking notice. Will they notice Atlantic City and the Catskills, too?

From yesterday's USA Today:

The USA had a record 767,418 slot machines and video poker games in operation on Jan. 1, up 6.4% from a year earlier, according to Casino City Press, an industry publication. The nation now has slots in 37 states — up from 31 in 2000 — and the equivalent of one machine for every 395 residents.

The trend will accelerate in the next few years. More than 100,000 new slot machines already have regulatory approval or could get it this year.

This related article in USA Today provides some information about a venerable Vice Squad topic, the workings of slot machines. In the course of reading the article, we learn that an icon of our youth, "I Love Lucy," (in re-runs, of course, we aren't that ancient) has now been co-opted to draw in electronic gamblers. Someone has some splainin' to do.

Labels: gambling, slot machine

 
Slots in Maryland
- posted by Jim Leitzel @ 10:54 PM

Vice Squad was in Baltimore this past weekend, perhaps explaining the blog neglect. But the news in Baltimore is pretty similar to the news in Chicago -- lots of talk of government budgetary shortfalls and slot machines as one way of dealing with them. Maryland lawmakers seem ready to pave the way for the number of legal slot machines in the state to rise from zero to 15,000. Millions of dollars in lobbying expenditures and campaign contributions from gambling interests have not affected the political debate, of course. Illinois and Chicago also appear to be headed towards a gambling expansion. Is there any ceiling to how much gambling can expand? Yes, but Illinois and Maryland are probably below that threshold right now. In Las Vegas, on the other hand, August 2007 gambling revenues were 4.4 percent lower than in August, 2006.

Speaking of gambling, Vice Squad is slated to attend a conference in New Orleans later this week. New Orleans contains a casino that holds a local monopoly but somehow managed to go bankrupt twice. Posting will remain limited until next week, I am afraid.

Labels: gambling, slot machine, solipsism

 
Bonfire of the Vanities, Indiana Style
- posted by Jim Leitzel @ 8:16 PM

What is it about goods associated with vice that makes authorities of various sorts want to destroy those goods, in public or with witnesses, if possible? Bonfires in Pakistan, crushing by a "double-roller" in Oregon -- and today, we learn that an Indiana judge has sentenced a man convicted of a gambling crime to pay some restitution. Oh, and to watch as the 38 gambling machines that were taken from his nightclub are destroyed, of course.

Meanwhile, it is a legal gambling machine that has a New Mexico man in a bit of a lather, understandably. The nickel-slot machine announced that he had won a jackpot worth more than one and a half million dollars. Casino authorities soon informed him, however, that he hadn't really won. The machine was just kidding, or rather, malfunctioning, and the rule written right there on the machine says that if the machine kids, winnings are voided. The disappointed gambling man is not folding yet; he is suing, but the case is complicated by the fact that New Mexico is unlikely to have jurisdiction, as the dodgy slot machine is located on a Native American reservation. [Thanks to Overlawyered for the pointer.]

Labels: gambling, Native Americans, slot machine

 
Iowa Lottery Contretemps
- posted by Jim Leitzel @ 6:37 PM

On October 7, the New York Times initiated a series on state lotteries in the US. Vice Squad noted at that time that the data from the Times's interactive map had some weird entries for Iowa. On October 14, the Times published the second installment of the series, about privatization of state lotteries. The odd Iowa numbers, which indicate very high administrative expenses (relative to lottery revenues), seem to be connected with a sort of quasi-privatization -- and one that should serve as a warning to other states.

The story is nicely told in "The Iowa Lottery's TouchPlay Debacle," an article by Keith C. Miller that appeared in Volume 11, number 2 of the Gaming Law Review. While the Iowa lottery has been around for more than two decades, it was only in 2003 that lottery operations were moved from the state fiscal authorities to the nonprofit "Iowa Lottery Authority," which adopted a corporate outlook and aimed at increasing profits. Earlier, in 2002, the Iowa legislature had asked the Lottery to look into the prospects for dispensing lottery tickets via terminals with video screens. By April 2004, such video terminals were available on a statewide basis -- but the numbers were small, and the terminals tended to be placed in bars. In January, 2005, 422 of the machines -- known as TouchPlay -- were available across the state.

What do these machines actually look like? Well, as Vice Squad has noted before, it is possible for clever designers to arrange games that fall under the legal definition of bingo or lotteries nevertheless to look and play almost identically to slot machines -- and this was what the TouchPlay machines did. (They apparently had much lower rates of return than actual slot machines in Iowa, however, which are regulated to return at least 80 percent of bets on average.) So the adoption of video terminals by the state lottery looked a lot like spreading slot machines into new, non-casino locales. This might have been tolerated, except that those 422 machines of January 2005 suddenly morphed into 4,876 machines one year later (with some 4,000 more ordered); the machines often were located in grocery stores and other places where kids were a standard part of the clientèle. Iowans rebelled against the stealth invasion of slots into their daily lives, the legislature listened, and a ban on TouchPlay machines commenced on May 4, 2006. Why the high administrative costs? Presumably because the Lottery had to rely on contracts with private companies to provide the machines and ancillary services, and those firms needed to receive payment -- but this is just a guess.

The Performance Report of the Iowa Lottery Authority for fiscal year 2006 (July 1, 2005 to June 30, 2006) is available online (13-page pdf here), and it appears to be the source for the Times's Iowa lottery data. Here's an understated bullet point from page 1: "Net revenue from TouchPlay machines totaled over $121.4 million in fiscal year 2006, compared to $6.4 million in fiscal year 2005. The TouchPlay program was ended in May 2006." On page 5, we learn that the more than $121 million in TouchPlay revenue compared with the performance target of, er, $17 million -- a piece of Stakhanovite plan overfulfillment.

As for state lottery privatizations, Miller's article contains (page 96) an implicit warning, based on the change in lottery oversight to a non-profit organization charged with being more businesslike than the state entity that preceded it: "One might conclude that the 'depoliticization,' of the Lottery contributed to a climate of lax legislative oversight, and that the TouchPlay controversy was an outgrowth of this environment."

Labels: gambling, lottery, slot machine

 
Macau
- posted by Jim Leitzel @ 5:35 PM

Labels: China, gambling, Las Vegas, slot machine

 
McCain Rushes In Where Supremes Fear to Tread
- posted by Jim Leitzel @ 6:58 PM

How do you know when the chairman of the US Senate's Indian Affairs Committee is launching an attack on Indian gaming? "'I don't want this hearing to be viewed as some attack on Indian gaming,' [Senator John] McCain said."

One of the main issues, it seems, is that bingo machines have evolved to where they look and act a lot like slot machines. That is a problem for states where Indian casinos are permitted to operate bingo machines, but not slot machines. And although it is not mentioned in the linked article, it is also a problem in states where Indian casinos are permitted to operate slot machines along with bingo machines. Why? You will be surprised to learn that there is a revenue angle. The pacts that such casinos sign with the states often include a provision whereby the tribes pay a per-slot-fee to the state. Federal appellate courts have ruled that bingo machines are not slot machines, and the Supreme Court has not taken up appeals -- so state gambling revenue is on the line.

Labels: bingo, gambling, Native Americans, slot machine, Supreme Court

 
Electronic Gaming Machines
- posted by Jim Leitzel @ 5:26 PM

Vice Squad has an established, long-term interest in slot machines. Fueling our compulsion is a review article in the January issue of Addiction. The article is "Electronic Gaming Machines: Are They the 'Crack-Cocaine' of Gambling?", and it is written by Nicki Dowling, David Smith, and Trang Thomas. Here is a more-or-less random sample of tidbits drawn from the article.

The majority of gaming machines across the world are not slots, but pachinko machines. These machines, especially popular in Japan, have lower play rates and lower maximum bets than do typical slots or video lottery terminals ("high-intensity gaming machines"). Most of the world's slots (er, high-intensity gaming machines) are located in the US, but in per-capita terms, Australia is unsurpassed. The per-adult frequency of such machines is more than twice as high in Australia as it is in the US. Per-capita expenditure on electronic gaming machines in the late 1990s was about $420 in Australia, and between $80 and $160 in the US, UK, Canada, and New Zealand.

Did you ever wonder if those virtual reels spinning on modern slot machines actually are like mechanical reels, in the sense that the relative position of the symbols is fixed? Turns out they are: "the symbols on any given reel are always in the same relative position on every 'spin' [reference omitted]."

The answer to the question in the title of the article concerning the relative addictiveness of electronic gaming machines is "not proven". Now researchers conduct more-or-less controlled trials, trying to determine what features of a machine render it more reinforcing. Machines that accept banknotes tend to do much better (in terms of collecting bets) than machines without bill acceptors.

Labels: addiction, Australia, gambling, slot machine

 
No (Or Few) US-Style, High-Payout Slot Machines for Britain
- posted by Jim Leitzel @ 8:25 PM

Britain continues to back away from some of the elements of its proposed gambling liberalisation plan of 2002. Today's casualty was high-payoff, electronically linked banks of slot machines, which are typical in US (and, apparently, continental European) casinos. The Culture Secretary now suggests limiting such slots in the UK to the few places that might construct large, Vegas-style casinos. This limitation is in line with the recommendation of a joint Lords/Commons committee, as noted in April by Vice Squad.

Labels: Britain, gambling, slot machine

 
Vicewire, 9/20/2004
- posted by Ryan @ 10:22 AM

1) Check out Mark Kleiman's excellent post on drug policy.

2) A New York judge has ruled it is ok to be drunk or high while performing jury duty. She cited the 1987 Supreme Court case that ruled mind-altering substances could not be considered outside influences on jurors.

3) Rockport, MA (dry since 1856!) is considering lifting its ban on alcohol.

4) California is being sued by in-state racetrack owners, who say that the government gave special treatment to American Indian reservations in allowing more slot machines to be built there in exchange for $1 billion a year.

5) In Colombia, the largest pharmacy chain was shut down by police, who say that it was funded by money from drug traffickers. It entailed taking over 400 stores in 28 cities.

Labels: alcohol, Kleiman, slot machine, Vicewire

 
How Slot Machines Operate
- posted by Jim Leitzel @ 6:12 PM

In May, following a fine story in the New York Times Magazine, Vice Squad looked a little bit at the design of slot machines. The July, 2004 edition of the on-line Electronic Journal of Gambling Issues (it just changed its name from egambling) provides more details in an article titled "How do slot machines and other electronic gambling machines actually work?" It covers the pseudo random number generating processes, the myths that slots players cling to, and the addictive potential of slot machines, among other things. Here's a scenario that many slots players have reported. They play a given machine for an hour, without success, and then quit. Seconds after they leave, someone else walks up, and on the first play, wins a significant jackpot. It seems as if the original bettor would have won that jackpot if he or she had just played one more time. Turns out that reasoning is incorrect: "the RNG [Random Number Generator] runs continuously and a millisecond difference in the button press will lead to a different outcome."

Labels: gambling, slot machine

 
Is California the New Nevada?
- posted by Jim Leitzel @ 4:36 PM

In gambling terms, that is. According to this article (originally from the L.A. Times), some observers expect California's gambling revenue to grow markedly, possibly even exceeding Nevada's gambling take by the end of the decade. Right now, there are 60,000 slot machines in California, and 220,000 in Nevada, and Nevada also provides more gambling options: "Unlike Nevada, California does not allow sports books, craps or roulette, although tribes have devised card games that mimic the classic casino games."

The article also claims that the growth in gambling in California is in part a response to the adoption of property-tax limiting Proposition 13.

Labels: California, gambling, Nevada, slot machine

 
Vicewire, 8/22/2004
- posted by Ryan @ 8:49 PM

1) A man is being charged with murder after a fire that started with wires and lamps used to grow his marijuana plants killed two firefighters.

2) Governor Schwarzenegger has given his okay for thousands more slot machines to open across the state of California. 25% of the profits will go to the state government, an estimated $200 million a year.

3) And the indictment for the University of Colorado has been handed down for those accused of using prostitutes to lure potential football players.

Labels: California, marijuana, prostitution, slot machine, Vicewire

 
Pennsylvania OKs Slot Machines...
- posted by Jim Leitzel @ 11:29 AM

...up to 61,000 of them, in fact. This will make for 18 states with legal slots, not counting those states that have slots only in Native American casinos. The Pittsburgh Post-Gazette has an interesting article today that looks at legalized gambling's impact on Atlantic City, New Jersey, and how things are likely to differ with legal slots in Pennsylvania.

In what I am pretty sure is unrelated news, I am slated to leave Chicago and even the good ol' USA for a bit more than a week; blogging is likely to be slow from me, but Vice Squad has an entire squad, you know.

Labels: gambling, slot machine

 
How Are Vegas Slot Machines Regulated?
- posted by Jim Leitzel @ 7:56 PM

Today's New York Times has the latest contribution to its series of editorials ("Making Votes Count") on the process of collecting and counting votes. "Gambling on Voting" draws a comparison between how slot machines are regulated in Nevada, and how those newfangled electronic voting machines are regulated across the good ol' USA. The Times makes the important point that the voting machines are "cheap and untrustworthy" in comparison with the slots. But in doing so, to the delight of vice policy hounds, we learn quite a bit about the regulation of slot machines. I particularly enjoyed point 3:

There are meticulous, constantly updated standards for gambling machines. When we arrived at the Gaming Control Board lab, a man was firing a stun gun at a slot machine. The machine must work when subjected to a 20,000-volt shock, one of an array of rules intended to cover anything that can possibly go wrong. Nevada adopted new standards in May 2003, but to keep pace with fast-changing technology, it is adding new ones this month.

It's comforting to know that if lightning strikes the casino and all the people are temporarily put out of commission, the slots will still work correctly, no?

Labels: gambling, Nevada, slot machine

 
Gambling With a Lawsuit over Slot Machines
- posted by Jim Leitzel @ 5:26 PM

Vice Squad recently (on May 9 and May 15) has been talking about the reinforcing qualities of slot machines, the ways in which today's computer-chip driven slots are engineered to induce players to spin the reels one more time. Some players (presumably not those who have actually won money) are not amused by these reinforcing qualities, and have been pursuing a class-action lawsuit for the last decade. The lawsuit charges "that casinos, slots manufacturers and cruise ship operators - virtually the entire gambling industry - have fleeced machine patrons with a knockout cocktail of computer technology, crafty marketing and outright deception.

The case is pending in the U.S. 9th Circuit Court of Appeals in San Francisco."

According to the linked article, the plaintiffs charge that the casino industry disguises the odds on slot machines and video poker terminals; the fiction of a near-miss is also part of the complaint. David Boies, Al Gore's Florida recount advocate, is the lawyer for the plaintiffs. (Boies's son is currently involved in a lawsuit against alcohol manufacturers claiming purposeful marketing to underage drinkers.) One of the plaintiffs hit upon the idea of suing, apparently, following twelve straight losing hands at a video poker terminal in 1990.

Gambling is far from a "perfectly competitive" industry, and we seem to want it that way, out of concerns with problem gamblers and the exposure of kids to wagering. As a result, there is no reason to believe that the disclosure of information is "optimal." I don't really object, then, to a requirement that each slot machine indicate the payout rate. (I realize that such rates vary based on the type of wagers made and whether there is some sort of cumulating jackpot, but a minimum payout rate based on a one-unit bet could still be determined.)

Labels: casino, gambling, robustness, slot machine

 
What Constitutes a Slot Machine?
- posted by Jim Leitzel @ 6:38 PM

Last week I mentioned an article detailing how slot machines are designed to induce us to fill them with money. Just as the pleasure pathways in our brains evolved in a world without purified cocaine or distilled alcohol, so did they evolve without slot machines. People seem to be programmed to find intermittent reward schemes to be particularly motivating: if things always turn out good or bad, there's little reason to put forth any effort. But lots of negative feedback combined with occasional, random positive reward, can be quite reinforcing, as we "search" for what we can do to reproduce the good outcome. Such an "intermittent reward" system has been brought to a state of near perfection by the designers of slot machines, and some people succumb to gambling addiction.

But today's question is, what is the definition of a "slot machine"? The reason it matters is that Indian tribes that operate casinos have to sign agreements with the state in which they are located. The agreements detail what payments the casinos have to make to the states. A typical term in the agreement is that the casinos pay to the state a percentage of the revenue earned by slot machines. But what if you have a machine that looks and acts a lot like a slot machine, but somehow falls outside the definition? Then the revenue raised by that machine doesn't fall under the slot machine provision, and you can avoid those payments to the states.

The Supreme Court of the United States, believe it or not, was recently asked to resolve the "what is a slot machine" issue, but it declined to take it up. Here's the story from SFGate.com; here's an excerpt:

States fear Indian tribes with casinos could avoid sharing revenue with them by replacing slot machines with machines that look and play much the same but are classified differently, under recent federal court rulings.

The Denver-based 10th U.S. Circuit Court of Appeals, which covers New Mexico, has ruled that machines featuring bingo- and lottery-like games are not slots under the federal Indian Gaming Regulatory Act. The 8th Circuit, based in St. Louis, has ruled the same.

The Bush administration, backed by nine states, had asked the Supreme Court to hear an appeal of the rulings, arguing the machines were "indistinguishable in any meaningful sense from any other slot machine along the casino wall." The Supreme Court on March 1 declined to hear the appeal.

Labels: addiction, bingo, gambling, Native Americans, slot machine, Supreme Court

 
Designing Reinforcement
- posted by Jim Leitzel @ 7:38 PM

My venture into a New Orleans casino two weeks ago reminded me of something that I had already sensed: the designers of slot machines have really figured out how to get a customer to put another quarter in, to play one more time..and one more after that, and so on. This is the chief marker of an addictive good or activity, that it displays "reinforcement": past consumption begets future consumption. Today's New York Times Magazine offers up a fascinating article (registration required) on how that reinforcement is designed into the sophisticated slot machines of the computer age.

The tricks vary with the intended audience. Novices like machines that have lots of small wins; these are called "cherry dribblers," as they take your money in small increments, not in big chunks. The notion of the "near miss" is important, too, in reinforcing play, although there really isn't such a thing as a near miss -- there are only wins and losses. Having two "bars" out of the requisite three is a loss, and no "closer" to a win than having no bars.

It is the computer chip that has resurrected slots, and now they take $30 billion per year from gamblers in North American casinos -- 70 percent of casino winnings. Most slots, according to the article, are aimed at women over 55 years of age.

Probably more on this excellent article tomorrow...surely that tease will keep the Vice Squad reader coming back!

Labels: addiction, gambling, slot machine

 
Foreign Vice Developments: Moscow (gambling), India (alcohol), Malawi (prostitution)
- posted by Jim Leitzel @ 2:41 PM

Three unrelated but somewhat exotic stories, at least given their locales....

(1) "Moscow has been transformed over the last two years as gambling businesses have flooded the city's streets, shops and metros, enticing passersby with chances to win or lose their money....

There are now 53 casinos in Moscow, 35,000 slot machines and 2,000 igroviye zaly, or slot machine arcades in the city..." London, similar in population to Moscow (13,945,000 in the London metropolitan area, 11.2 million in Moscow), has 29 casinos, according to the linked Moscow Times article. Moscow also now sports its first Gamblers Anonymous group.

(2) The Indian state of Gujarat has prohibited alcohol since 1960. The son of one of the state ministers has had more than 750 crates of alcohol confiscated from his house, which neighbors on his father's home. The father's portfolio in the cabinet is not one you would find everywhere: he is Minister for Religious Places and Cow Protection.

(3) The lame-duck president of Malawi has been issuing a spate of decrees as elections approach. Following a long tradition of scapegoating women for sexually transmitted diseases, he recently ordered that women out at night be arrested, as a precaution against the spread of AIDS. Four law students challenged the decree, and the High Court granted an injunction that has caused the implementation of the decree to be postponed.

Labels: alcohol, gambling, HIV, India, Russia, slot machine