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You can play a slot machine before you reach the luggage point in Las Vegas: you’ll find small rooms equipped with slots in each terminal of McCarran International Airport. Once you get your rental car, don’t forget to stop at the gas station on your way to play slots in their shop. All that can be done before you reach your destination: hotel-casino where, according to the modern standards, approximately 80% of the area is filled with slot machines and 20% is used for table games.
There wasn’t a sound in the room apart from the soothing roaring of two dozen ‘sleeping’ consoles
Bally Technologies is the world leading slot machine manufacture with the headquarters located in 3 miles to the south of the Strip. When I visited Bally for the first time, Mark Trask, company’s senior marketing manager, took me to a gambling showroom so I could play a little.
Compared to a common casino with its noise, it was very quiet in Bally’s showroom with soft lighting and soothing roaring of two dozen of ‘sleeping’ consoles.
Trask, a blond-haired tall man in his 30s, showed me their new games based on popular American sitcom Friends installed on ProWave machine developed by Bally, a slick 42-inch arcuate console.
I was sitting in front of the console when Trask touched the logo in the top-right corner of the screen, chose bonus round in options and offered be to press the button to start the game. I did and heard the music theme from the TV series intro, the famous sextet smiled at me from the time of their youth, and 5 reels depicting Central coffeeshop, a guitar and images of the characters started to spin on the screen. Wheel of Fortune, bonus round, started with the video clip in the same style showing Rachel wearing a wedding dress and saying, “Happy Birthday, Grandma!”
Bally holds all of its machines in the factory's warehouse next to their game studio which cooperates with its headquarters in Vegas. In 2014, Scientific Games, Bally’s holding company, sold over 17 000 newly-made slot machines. I saw hundreds of fresh slots meeting the highest requirements of the industry lined the store walls during my visit.
Each of them was labeled with address: Oklahoma, Washington, Michigan, Canada. Only a few of them were to be sent to Vegas casinos reflecting wide national and international company’s expansion. Scientific Games acquired Bally for $5 billion in 2014. At the same time, 23 states legalized gambling and the gambling industry became heavily taxable supplementing their budgets.
Technology built in slot machines finds its supporters in Silicon Valley
Gambling expansion is, mostly, the slot machines expansion. A modern casino, as a rule, makes 70 to 80 percent of its profit from slots. Their popularity has been growing since 1970s. Before that, only 50 percent or even less of the land-based casino area was devoted to slots. Today, psychological and technical systems built in the slot machines (including reward and tracking systems) find more supporters in Silicon Valley.
At the factory, Trask and I passed a ProWave machine which was designed by Bally in mid-2014 as evidenced by its 32-inch display which looks more like a Samsung TV. According to Trask, the same games are played 30-80 percent longer on curved displays. I asked him why it happens. “It looks great with incredibly clear picture”, he said. Game designers look for ways to make the games extremely attractive; they create system which is simple but endlessly engaging in the same time, a slot machine which pulls players without their noticing and holds them in elaborated cycle of risk and rewards to keep them on the same place for hours while their pockets are getting slowly but inevitably empty. While we were standing in front of one of those machines, Trask told me about the floor in MGM with 2,500 slot machines and hundreds of various games. The Trask's mission, as he sees it, is simple: “Our job is to help you choose a game”.
The first slot was invented in Brooklyn in the mid-1800s – it was a cash register-sized machine with common playing cards used for gambling. To start the game, one had to insert a nickel and push the handle. Cards would appear in a small window in randomized order and the machine owner would pay out the winnings depending on the combinations in the window. In 1898, Charles Fey turned this simple prototype into the ‘Liberty Bells’ – the first actual slot machine with 3 reels and payouts in coins. Each reel had 10 symbols on it, giving players a 1 in 1000 chance to win a 50-cent jackpot when 3 Liberty Bells landed on the reels. The slot was a hit in bars and became a casino standard for many years; however, it wasn’t treated as any serious game for decades, only as an entertainment for card players’ wives. Accordingly, table games remained dominant in the casinos of that time while slots were treated as secondary games.
The situation started to change in 1960s when Bally presented the first electromechanical slot machine. The new platform let players bet several coins per stake and the machines could multiply jackpot values as well as offer smaller but more frequent wins. The multiline system was introduced: alongside with the classic horizontal line, it was possible to win on diagonal and zigzagged lines. The new projects attracted new players to slot games and led to the further development of stagnating industry.
William 'Si' Redd, who was in the head of some of those ‘new projects’ at Bally, played an important role in this development. “A player comes to win,” he said, “he doesn’t come to lose, so give him more, be more liberal. Let him win more, and then comes your turn so you can speed up the games as you were too liberal before”. In other words, they decreased volatility of new slots so big wins and big losses became rarer.
Video poker gained a reputation of ‘cocaine’ in gambling
In 1970s Redd left Bally to establish another gaming company which is now known as IGT. It specialized in video gambling machines (another name for them is video poker). These machines were even less-volatile so players could win only small amounts. Interactive features of video poker made them even more attractive leading to huge success of these games: players lined up in front of the machines when first of them were installed in the casinos and spent hours sitting in front of the screens so very soon video gambling machines gained a reputation of ‘cocaine’ for gamblers.
“If you have $100, you can spend about an hour playing common slot machines, but our video poker was designed to give you 2 hours of play for the same $100,” said Redd. Game designers got a task to extend time it took for the video poker machine to empty players’ pockets.
Redd also acquired the patent for the new random number generator (RNG), which computerized all calculations so they could control the volatility. A modern slot machine is essentially the same RNG which generates millions and billions of combinations. When a player presses ‘spin’ button he simply stops the RNG at a particular moment. Everything you can see on the screen and hear – music, mini-games, the design of the reels – are there to make you keep pressing the ‘spin’ button.
The total share of video poker machines produced by IGT is 93%; in the same time it’s the biggest slot manufacture. The Wheel of Fortune franchise covers all kinds of slots – reels, curved screens, various features. During my visit to their office in Vegas, I asked Jacob Lanning, IGT’s vice president of product management, what makes a game good. “Figure that out and get our job offer,” he said. “If we knew what the perfect game was, we would just keep making it over and over.”
Though nobody can tell us what the perfect game is, there are some operational principles which are built in the most of the games. The first thing, there is a certain aesthetic uniformity: under the franchise all colors must be primary or pastel and the soundtrack must be in a major key. However, multiline payouts introduced by Bally are not always that easy to get: modern slots offer over 50 and sometimes even over 100 different winning combinations – that’s the way too much so without the corresponding lighting, sounds and congratulations most of the new and even experienced players wouldn’t know if they win or lose at once .
“If we knew what the perfect game was, we would just keep making it over and over.”
To keep players in the game, all slots are built on the same basic principles discovered by B.F. Skinner in the 1960s. We have already covered this topic in one of our previous articles. Skinner is known for his experiment where he put pigeons in a box and gave them a little food when they pressed a handle. When he changed the pattern and the presses didn’t guarantee food any more (so it appeared randomly), the pigeons started to press the handle more frequently. That’s how the Skinner box was developed which Skinner himself compared to a slot machine.
The Skinner box is a combination of tension and alleviation: the absence of food after the handle is pressed creates expectation that the next press will certainly bring the food. If the reward comes rarely, the animal gets frustrated and ceases any attempts to press again; if the food falls out too often, it presses more rarely.
Like video poker, the most of the multiline slots rarely award huge jackpots, only frequent small wins. “They imitate video poker formula but in slot machines”, said Natasha Schüll, an associate professor at MIT who has been studying slots for over 15 years. In 2012, Princeton University Press published Addiction by Design: Machine Gaming in Las Vegas which was the culmination of her researches and deconstruction of slots.
Schüll claims that modern slot machines work on the Redd’s principle meaning that they don’t shock players with big wins or losses. “Big wins, as it has been proved, stop the player. He grabs his money and leaves”, says Schüll. When you play for a long time without any sufficient wins, you get into the process of waiting for the next small win, and one more after that, and more…
As a result, modern slots payout on approximately 45% of all spins instead of 3% in classic slots. “The sense of risk is not that great anymore”, says Schüll. 'Designers call them drip feed games.'
This analysis is based on an official paper from American Gaming Association (AGA). “Low-volatility games are more attractive for the local markets than for such resorts as Las Vegas or Atlantic City… Customers, as a rule, spend more time playing such games…” In other words, low-volatility games contribute to the gambling expansion in the country.
The emergence of bonus games has also contributed to increase in slots popularity: some of the combinations not just pay out a corresponding winning amount but trigger bonus games. Lanning showed me Entourage game with a bonus round where images of characters are matched to make up a winning combination. Such bonus game is called “pick-em” in the industry. “These are the most popular features”, says Melissa Price, the senior vice president of gaming for Caesar’s Entertainment. “Customers like such games”.
Moreover, they make profit from emotions: the company ordered a survey to find out why players like Wheel of Fortune so much. Most likely, the reason is the brand. “People say they heard about Wheel of Fortune from their grandmas. It reminds them of their grandmas.” How can one compete with that?
Price and I were talking on the floor of Harrah’s Las Vegas at 9:00AM – there were some people playing slot machines at that time; probably, they had spent the whole night gambling. In 2014, Caesars Entertainment, Harrah’s holding company, declared its bankruptcy as a result of growing competition. During the process, the company’s data base with information about all their customers was recognized as the most valuable asset of the company, worth about $1 billion.
Harrah’s pioneered what is now considered to be a standard in the whole industry. We are speaking about Total Rewards player tracking system. It started with punchcards in 1985 and was up-leveled with digital program and magnetic cards in the 1990s. The slots became easily-tracked and they were the focus of the program. The system became even more complex under the auspicies of former CEO Gary Loveman. He came to Harrah’s with fresh ideas from teaching at Harvard Business School which helped him in the business.
The data we have about our consumers is the envy of any other consumer product industry
It had been impossible to track players before this system was introduced. The system allowed casinos to gather information about their players; they could know which players spent the most so they could give them a bonus to make them lose even more. “We had to find more automatic way to do that”, Price said.
Price and I stood behind a woman playing Ellen Degeneres from IGT. Ellen’s head rolled down the high-definition parabolic screen of the machine. While Total Rewards player’s card is inserted in the machine, each action is recorded, including bet size, name of the game, time spent playing one or another game, etc. When the player presses ‘Cash Out’, the system saves all the data to a special file where all previously recorded information about this player is stored.
The tracking system knows the player much better than any manager: over time, Harrah’s can create a profile of the player to measure his risk tolerance, the amount of money he losses before he stops playing so they know the right time to offer him a certain bonus to return him back to gambling. Sometimes it can be a room in a luxurious hotel; sometimes $15 is enough.
In 2012, This American Life, a weekly radio series, revealed the wicked trend of usage of this system considering the example of Harrah’s in Indiana where a woman was induced to gambling with such bonuses as hotel rooms, expensive jewelry, and free trips to the Kentucky Derby. The small prizes were feeding her gambling habit until it turned out that she was $125.000 in debt.
“The data we have about our consumers is the envy of any other consumer product industry”, Price said. Now they can even develop heat maps so they can see how much money and in which area of the casino the player spends. This is another proof of Redd’s approach: a small slot player in the long run is as valuable for a casino as a wealthy one.
After my trip to Vegas, I visited the Sugarhouse casino in Philadelphia, on the bank of the Delaware River. Sugarhouse opened in 2010 and is one of 12 casinos which turned Pennsylvania into a gambling mecca after legalization in 2004. The casino’s interior – clear passages, clean line of sight from eastern to western walls. Slots play pleasant tunes; it feels like thousands of robots are blowing bubbles. Silicon Gaming, a software developer, decided that soundtracks in the key of C were the best for the casinos.
After 11 years of legalized gambling, the state has made $3 billion from table games and $17 billion from slots. Walking about the casino, I started a conversation with two slot players: Diane Singleton, a 45-year-old retiree, and Jack who refused to tell his last name. Both were playing Fu Dao Le, the name can be translated as Cherubic Chinese Babies. The game was uploaded to a ProWave machine with red Bally caption and the logo in the top-right corner of the screen.
Singleton said she threw her rewards card away as it reminded her of the money spent on gambling
I asked them what they liked about the game. Jack said that unlike other games, Fu Dao Le was interactive. He said he liked games where he could touch the display to interact with the game and touched a cherub on the screen who started laughing.
Jack and Singleton told they earned ‘black cards’ in Sugarhouse which means each of them lost over $10.000 at the place. Singleton said she threw her rewards card away as it reminded her of the money spent on gambling. I had more questions but it became clear that Singleton wasn’t listening anymore.
“She is in the zone”, Jack said.
The “zone” underlies Schüll’s theory of success and expansion of slot machines. She heard this word over and over during 15 years of her researches – players told her multiple times that they played to enter the zone where they didn’t have to think anymore.
To understand what the zone is, you need to understand what the ‘flow’ is – the concept developed by psychologist Mihaly Csikszentmihalyi which describes hyper concentration state. Time goes faster during the ‘flow’ (hours feel like minutes) or slower (reactions can be immediate) and the mind reaches the state of euphoria. Schüll in her book describes 4 Csikszentmihalyi’s criteria of flow: “First of all, each moment of activity must have its own goal; secondly, there must be clear rules to achieve this goal; thirdly, the actions must give immediate feedback; the fourth, the tasks musts meet the goal”. Slots, throughout their history, easily met 2 first criteria; after lowering the volatility, they fulfilled the third criteria; when multiline system, endless bonus rounds and mini games were introduced, they fulfilled all 4 criteria.
Having returned back to the Bally’s showroom, Trask and I decided to try Duck Dynasty. “There has never been more slot machines in the world than now”, he said. “It’s not only in the USA, but in the whole world”. The outlet of Scientific Games slot machines includes 50 countries on 6 continents. The company has started to deliver its products to Greece where gambling has been recently legalized.
The industry is ready to see decrease in the number of middle-aged consumers and competition from free-to-play mobile games. “People have too much free time and there are numerous iPhone apps so they can waste their time”, Price says. At Bally’s warehouse, Trask told me “Do you know how to get many younger consumers to gambling? Give them a fucking telephone.”
“Do you know how to get many younger consumers to gambling? Give them a fucking telephone”
Obviously, Trask is not the only man in the industry who knows the trick. In 2011, Caesar’s acquired Playtika, a developer which creates free and paid mobile games. A year later, IGT acquired DoubleDown, the free casino games app which can be played either autonomously on a mobile phone or on Facebook. Currently, the company offers table games and rich portfolio of slots including Wheel of Fortune to mobile players. In 2015, Zynga, the leading gaming giant, appointed former studio manager Jim Veevart as DoubleDown’s vice president. A year before that, Churchill Downs Incorporated which controls a casino chain in addition to its Kentucky Derby racetrack, acquired Big Fish Games, a free-to-play games developer.
Meanwhile, the technological sector is trying slot development principles for their own purposes. The tech writer Julian Dibbell developed the concept of ludocapitalism: the term which came to his mind when he was watching players digging gold in World of Warcraft to make a living in the real world. The ludocapitalism was an attempt to explain growing gamification of the society through technology. Dibbell admits that the parametres of the concept are not clear but, in its turn, it may be an evidence that capitalism can drive people play for better or worse. In fact, games are not allegories of our lives; they are our lives. As the society moves towards the>