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Best of John G. Brokopp

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Multi-Denomination Slots Create Accounting Problems

3 May 2006

The increasing popularity of multi-denomination slots is no doubt a convenience for players who no longer have to search for a machine that fits their gambling budget. At the touch of a button you can select the credit value you wish to play, be it nickel/dime/quarter, quarter/half-dollar/dollar, dollar/two dollar/five dollar or five dollar/ten dollar/twenty-five dollar, among other variations.

The technology is a tremendous financial boom for the casinos. Whereas before a dedicated quarter machine could only accommodate quarter players, multi-denomination capability means that half-dollar and dollar players can also sit down. The revenue-generating might of each machine was increased dramatically.

When a casino operator orders a multi-denomination slot from the manufacturer, it comes with different payback percentages depending on the credit value that the player selects. As a general rule of thumb, the lower the credit value the lower the payback percentage.

Dedicated monetary units made it easy for state gaming commissions to determine the payback percentages for the slot inventories of the individual properties, and it also made it simple to get a grasp of where each casino in the market stood in relation to one another as to how much money was being returned to players in the form of winnings for each denomination.

But as I learned from my communications with the Indiana Gaming Commission and the Illinois Gaming Board while reviewing the summary of slot activity at casinos in each state, that is no longer the case.

It is apparent that state agencies given the charge of accounting procedures for gaming revenue have been unable to keep up with multi-denomination slot technology.

Case in point is the manner in which revenue from the multi-denomination slots in place at Indiana casinos is tabulated. With the exception of the Horseshoe Casino in Hammond, all of the properties' figures reflect the total money wagered on the units based on the lowest denomination.

For example, on a quarter/half dollar/dollar machine, the revenues are reported as coin-in for quarter machines. On nickel/dime/quarter multi-denomination machines, the revenues are reported as coin-in for nickels.

In each case, the payback percentages for the higher denominations are lost. Furthermore, because those payback percentages are higher, the payback percentage for the lower denominations as reported by the properties may be artificially inflated.

At the present time only the Horseshoe's figures are reported differently but not necessarily better. All of the property's multi-denomination machines are lumped into one category of coin-in. In February the figure was $16,719,474 with a casino win of $2,769,891, which boils down to 83.54 payback percentage.

But the logical question should be, payback percentage for what? There's no way of determining the individual figures for each denomination.

On the Illinois side, multi-denomination capabilities at some casinos make it possible to punch in a credit value of two dollars, yet there are no figures given for the payback percentages on two-dollar games.

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John G. Brokopp

John G. Brokopp's gaming column appears in Chicago Sun Times (Chicago, Illinois), The Times (Northwest Indiana), The Quad City Times (Davenport, Iowa), The Courier News (Elgin, Illinois), The Gazette (Southwest Suburban Chicago) and Senior Wire (Denver, CO). He's also a regular contributor to The Colorado Gambler, Midwest Gaming & Travel, Casino Player and Strictly Slots. John possesses 28 years of experience as a professional handicapper, publicist, freelance writer, and casino gaming correspondent. He is also the author of two very popular books, The Insider’s Guide to Internet Gambling and Thrifty Gambling.

Books by John G. Brokopp:

> More Books By John G. Brokopp

John G. Brokopp
John G. Brokopp's gaming column appears in Chicago Sun Times (Chicago, Illinois), The Times (Northwest Indiana), The Quad City Times (Davenport, Iowa), The Courier News (Elgin, Illinois), The Gazette (Southwest Suburban Chicago) and Senior Wire (Denver, CO). He's also a regular contributor to The Colorado Gambler, Midwest Gaming & Travel, Casino Player and Strictly Slots. John possesses 28 years of experience as a professional handicapper, publicist, freelance writer, and casino gaming correspondent. He is also the author of two very popular books, The Insider’s Guide to Internet Gambling and Thrifty Gambling.

Books by John G. Brokopp:

> More Books By John G. Brokopp