Sep 28, 2015 3:40 PM

As gamblers shun stingier slots, casinos shake things up

The Associated Press

LAS VEGAS (AP) Move aside one-armed bandits. The casino floor is making room for game zones with oversized popping dice, digital spinning Big Six wheels and virtual roulette, with an eye on adding arcade-style video games in the not-so-distant future.

As gamblers appear to be shunning stingier slot machines that don't offer as many payouts, game-makers and casinos are keen on coming up with the next big thing to keep people playing.

The changing casino floor will be on display this week at the industry's premier trade show, the Global Gaming Expo on the Las Vegas Strip, and in properties across Sin City in the coming months.

Here's what the casino industry has been facing and their plans:



Slot machines have long been suspected of keeping a tighter grip on the money gamblers feed into them.

The proliferation of penny slots, in particular, with minimum and maximum bets that far exceed a single copper coin and carry with them inherently worse odds at getting one's money back, has meant a gambler's wager doesn't last as long as it used to.

Casinos across the country, with few exceptions, have been keeping more of what's wagered on slots, according to research commissioned by the Association of Gaming Equipment Manufacturers.

But their bottom lines haven't gotten an obvious boost. Revenue earned from slots has been on the decline for years. That's because gamblers may be walking away from what they see as a raw deal, among other reasons, said Marcus Prater, executive director of the industry group.

In Nevada, where the average payback on slot machines is 93.6 percent of every dollar wagered, machines must offer no less than a 75 percent average payback to the player. Most vary based on the minimum bets.

Changing the hold the amount the casino keeps isn't as easy as pressing a button. Prater said it requires alerting regulators and switching out a chip in the machine.

Tom Jingoli, with slot-machine maker Konami and the association's president, said he hopes the survey's results spark conversations during the conferences between companies like his and casino operators, none of whom would comment on the survey except for the Downtown Grand near Fremont Street in Las Vegas.

CEO Jim Simms called the reasons for falling slot revenue, including slot-hold, "nebulous" and touted the Downtown Grand's increasing rewards for loyal slot players.

Casinos devote most of their gambling floor to slot and video card-game machines, though the number in Nevada has dropped by nearly 15 percent since 2005, to 152,263 slot machines as of last year, according to Gaming Control Board statistics.

The number of slot machines dropped 19 percent on the Las Vegas Strip.



Whether it was the recession, worse odds of winning or disinterested would-be younger gamblers, the industry has realized they need to appeal to players wanting a challenge based on skill.

This month, Nevada regulators approved rules allowing for a player's skill to play a role in winning, whether in part or in whole, which could lead to casinos looking a lot more like an arcade.

Casinos such as MGM Grand have already redesigned parts of their floors to accommodate elaborate electronic versions of dealer-less table games, including craps, roulette and stadium-style seating for baccarat.

Justin Andrews, the casino's vice president of slots, said they have crunched the numbers and players on those machines are 11 years younger on average than players on the rest of the casino floor.

"Millennials are more attracted to the electronic table games than the traditional slots," he said.

Casinos aren't abandoning their most reliable and loyal gamblers who still prefer traditional slots.

New York resident Lisa Navarro, 48, said she played a penny-slot game all week while vacationing in Las Vegas and was sitting in front of it again Monday at the Linq before leaving.

She acknowledged that it's usually a 50-cent or dollar bet, not a penny, but says the bonuses drew her in.

"It keeps you entertained for a long time," Navarro said.

She didn't consider her trip a big win, but she said wasn't disappointed, spending what she had budgeted.

Slot revenue still accounts for 61 percent of the $11 billion Nevada casinos earned from gambling in 2014. But casinos and game-makers are hoping to broaden their reach with an eye on the future.



The Downtown Grand is redesigning its casino floor with plans to add skill-based games akin to an arcade at its entrance sandwiched between two bars as early as January.

Nearby screens would broadcast live sports as well as footage of e-sports in which spectators watch video-game players compete for cash. The hotel hopes to eventually host its own e-sports tournaments, the "icing on the cake" for their casino floor, said Seth Schorr, chairman of Fifth Street Gaming that operates the casino at the Downtown Grand.

Schorr also sits on the board of GameCo, a young company developing video game gambling machines for casino floors that will reward players who show some skill when playing first-person shooting or racing games, for example, with math behind the scenes not unlike video blackjack or poker.

"They've 'gamblified' them," Schorr said.

Blaine Graboyes, co-founder and CEO of GameCo, said younger players aren't interested in a "passive chance-based" game.

"This is really the opportunity for casinos to reinvigorate slots," he said.


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