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Best of John G. Brokopp
The Economics of Playing Slots12 February 2003
Playing slot machines is not as "cut and dried" at it may appear on the surface. There's a lot more to think about than merely dropping in coins and hoping you'll win. If you want to be a thinking man or woman's slot player, it is important to understand the economics of play and just how big an impact the built-in house edge has on your bankroll.
As many regular readers of this column know, I like to emphasize the "cost of gambling" as it applies to average recreational casino gamblers. There is always a price to pay whether you win, lose or break even. You don't always feel the "pinch" but it's always there.
If you bring $100 to a casino for a session of slot play, where do you head? To the nickel machines? The quarters? How about the dollar or five-dollar units? Allow me to illustrate the differences in theoretical cost among the various denominations based upon the average casino "hold" from September 2002 statistics compiled by the Illinois Gaming Board.
The average hold on the 2,286 nickel machines in place on Illinois casino floors was 9.81 percent. This means that the casino made 9.81 cents on every dollar played. It also means 90.19 cents out of every dollar played was returned collectively to gamblers in winnings.
Assume you sit down at a nickel machine, play 27 coins ($1.35) on every play, and you make one play every 10 seconds. During an hour's playing time you will have activated 360 plays and "churned" $486 through the machine. Based on the average hold, it will have cost you $47.68 to play that machine for an hour.
How about quarter machines? Let's say you bet three coins (75 cents) on each play every 10 seconds. After an hour you will have churned through $270. Based on the average hold of 6.73 percent on the 3,159 quarter machines at Illinois casinos, your play will have cost you $17.90 after an hour.
In both scenarios you don't feel the pinch when you lose. Bring $100, lose $100, where's the cost? But all the spins you lost on are factored into the machine's computer program to ensure the casino a profit over the long haul and bring the machine almost exactly to its individual payback percentage, thereby impacting how much you win.
You can also conclude from the above statistics that playing the nickel slots can be quite more theoretically expensive than playing the quarters. An hour's worth of $1.35 wagers on nickels cost you $47.68, whereas an hour's worth of 75-cent wagers on the quarters cost you $17.90. Based on this, quarter machines are more economical to play than nickels.
It all depends on how much you bring, how often and for how long you play, and, quite frankly, how long your money holds up! The more frequently you subject your money to the house edge by making plays, the greater that edge will affect you. Slow down your play and you're slowing down the speed with which the edge wears you down over the long haul.
If you decide to play a dollar machine and wager $2 a spin every 10 seconds, you will have churned $720 through the machine after an hour. With the average hold on the 3,061 dollar units in Illinois standing at 5.37 percent during the month of September, it would have cost you $38.66 to play it.
This leads us to another observation: Is it more economical to play $1.35 a spin on nickels and subject yourself to an hourly cost of $47.68, or is it better to play $2 a spin on dollar machines and subject yourself to an hourly cost of $38.66? The answer is clear: In the long run you are better off playing the dollars than you are the nickels. You are betting more and it's costing you less.
Those daring enough to venture to five-dollar machines can churn $1,800 through in an hour's time. In September the average hold on the 374 five-dollar machines in Illinois was 4.38 percent, or a cost to players of $78.84 per hour. This illustrates the fact that even though the hold on the five-dollar machines is lower than dollars, playing them can still prove relatively expensive simply because of the amount of money you can bet on them in an hour.
This article is provided by the Frank Scoblete Network. Melissa A. Kaplan is the network's managing editor. If you would like to use this article on your website, please contact Casino City Press, the exclusive web syndication outlet for the Frank Scoblete Network. To contact Frank, please e-mail him at firstname.lastname@example.org.
Best of John G. Brokopp
John G. Brokopp
John G. Brokopp