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Tuesday, September 1, 2009

Tightwad Tuesday: Casinos earn coin from penny slots

I find this article on USAToday.com is disturbing in a couple of ways. First, in a 'down economy' should you be at the casino? The casino is the last place many people should be especially if you have lost your job or behind on the bills.

Second as an ex dealer, I have horror stories about people staying and playing beyond their limits. I know that playing longer is exactly what the casinos want. The longer you stay the more the odds become in favor of the casino. The more likely you are to loose more money. Then people chase good money after bad.

Lastly, playing with or reducing your play to the smallest monetary denomination is still playing! I understand the attraction people feel to gambling but I do not understand the need to play.

The penny slot machine, once a joke among serious gamblers, is the hottest form of betting during this recession.

Even casinos that cater to wealthy gamblers are replacing $1 machines with video slots that accept bets one cent at a time. "You can play longer with less money on penny slots," says Ed Feigenbaum, editor of Indiana Gaming Insight, a newsletter.

The penny machines accounted for 36% of bets at Indiana casinos in July, up from 8% in 2005.
USA TODAY examined gambling data in seven states and found penny slot revenue soaring everywhere. National numbers are not available.

Las Vegas was slow to pick up on the trend to penny slots, but it has jumped on board, too. In the past two years, Nevada casinos have added more than 7,000 penny slot machines and removed 12,000 machines that require bigger bets.

Revenue from every form of gambling has fallen in Nevada during the recession — except penny slots. Penny slot revenue was up 3% in the year ending June 30. The 32 other types of gambling tracked by Nevada regulators — from sports betting to roulette — plummeted 19%.

"Bigger casinos used to frown on penny slots," says Bob Sobczyk, vice president of casino operations at penny-slot innovator Ameristar, which owns casinos in six states. "A consultant told us it was a joke to put all those penny machines in. Then we showed him our revenue," Sobczyk says.

He says penny slots are a hit because they're video terminals — full of visual glitz and betting variety — that a mechanical slot machine can't match by lining up three cherries.
Modern penny slot machines don't even accept pennies or pay jackpots in coins. Gamblers use dollar bills or casino tickets containing a cash balance.

Gamblers can make 100 penny bets simultaneously for $1.

Penny slots are usually set to pay off the gambler more frequently — as much as 70% of the time for every $1 bet — but pay smaller prizes. Casinos make more on penny slots, even though gamblers bet less. In Missouri, penny slots account for 42% of bets and 63% of casino profits.
What should a slot player do if they're interested in making money? "Tell them to invest in a college education," Feigenbaum says.

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