Casino Enterprise Management

One indisputable goal of slot manufacturers and their casino customers is to make slot products more and more entertaining. This way, patrons can spend quality time on machines and, presumably, walk away at least feeling entertained. Perhaps the most popular solution is the multi-line, multi-wager penny slot with complex bonus rounds. The attraction of these games is clearly the excitement of entering a bonus screen, where the game holds the possibility of large rewards.

These bonus rounds tend to take one of three forms: the most common is “free spins,” where the base game is played multiple times without any additional wager; another type of bonus involves the player selecting various graphic “doors,” which conceal different bonus amounts; and finally, there are bonus games that have the appearance of being skill-based, such as solving a puzzle or selecting targets to shoot at. All these types of bonuses have numerous variations and enhancements designed to increase the game’s excitement and attraction.

Some researchers and anti-gambling advocates have recently argued that these games have become too successful in their efforts to make players play longer, faster and more “aggressively” so that they will “play to extinction.” At least one regulatory body, the Ontario Alcohol and Gaming Commission, is reportedly considering new slot standards to address claims that some games subliminally stimulate play by rapidly flashing jackpot symbols, distorting odds, and clustering winning symbols in suspicious patterns.

Regulators, of course, have no business dictating the aesthetics of game design any more than they do specifying the color of a casino’s carpet. There is nothing inherently wrong with a game that is attractive, interesting and exciting. Regulation should not penalize creativity. However, regulators need to be vigilant to ensure that entertainment does not cross the line into deception.

The “Near Miss”

In the late 1980s, after slot machines had become the dominant form of gambling and had evolved into a fully electronic mode with virtual reels, Nevada regulators discovered that the displays of losing results on certain games were not random. Take, for example, a 3-reel game with a single payline, or a multi-line game with only one payline selected, where nine symbols are displayed for each game played. When the actual random result of a particular game was a losing combination, the game would properly display a randomly chosen set of symbols on the playline, indicating the losing combination (e.g., Bar ­– Blank – Blank). However, in such cases, these games had been programmed to select particular symbols for display just above and below the payline displaying the losing combination. The effect was that top jackpot symbols (e.g., three Red 7s) would appear just above or below the payline much more often than random chance would dictate. The implicit and subtle message to the player was that he or she had just barely missed winning the jackpot. This encouraged the player to either play more lines (bet more) or remain on the game longer in hopes of winning big.

Nevada responded to this deceptive practice by enacting Regulation 10.040(2), which effectively outlawed this form of “near miss.” Essentially, this regulation required that every possible combination of game elements that produce winning or losing game outcomes must be available for random selection at the initiation of each play and, further, that the mathematical probability of a symbol appearing in a position in any game outcome must be constant. In other words, whatever symbols the random process produces have to be displayed to the player without any programmatic intervention. 

Entertainment vs. Deception

In general, gaming is a “buyer beware” form of specialized entertainment. It is not the role of regulation to protect the foolish, uninformed or careless gaming participant. Regulation, therefore, assumes that players are sophisticated. It also seeks to ensure that basic, accurate information about game play is equally available to all players. For example, most regulations require games to have some form of graphic or video “help” display that shows the paylines, winning symbol combinations and associated rewards, and bonus play information. Odds information is not required, but regulations typically require minimum theoretical payouts (usually 75–85 percent, depending on the jurisdiction) and maximum award probability (e.g., 1-in-50,000,000). Finally, despite popular mythologies about “hot” or “due” machines, regulations ensure that each play is a pattern-free, discrete random event.

Is it possible, then, for a device that meets all of the above requirements, including the “near miss” prohibition, to have an element of deception?

It is first necessary to define “deception.” Generally, the term encompasses an act, behavior or artifice that intentionally misleads a participant by providing untruthful information or concealing important information. Thus, the essence of deception is a form of trickery, or deceit. The old-fashioned street-corner shell game was — and still is — deceptive because slight of hand by the operator removes the pea as the shells are rapidly shuffled. Near-miss machines were deceptive because the program overrode normal random distribution in the display of results.

These types of intentional efforts to mislead someone to his or her detriment must be distinguished from circumstances where the participant either misinterprets the communication or insists on drawing wholly erroneous conclusions. As author Saul Bellow put it, “The worst of all deceptions is self-deception.” In other words, you can’t blame a slot machine if the deceit is principally a product of the player’s mind.

In our view, “deception” in the context of an electronic gaming device must involve some intentional representation that would lead a reasonable player to believe something that is not true.

A controversy from several years ago illustrates this issue. Some gamblers filed suit against a well-known game manufacturer, alleging that the bonus wheel on a popular game was misleading. The wheel contained 22 equally sized segments, with each assigned a numeric credit value. One of the 22 segments was assigned the top award of 1,000 credits. The gamblers argued that this was deceptive because the actual random odds of the wheel stopping on the 1,000 credit segment were far less than 1-in-22. The challenge was rejected on grounds that a reasonable, sophisticated gambler understood that the wheel was merely a results display device and not a representation of an equally weighed spin game. In other words, the information provided with the game made it sufficiently clear that, upon entering the bonus round, the revolving wheel was simply displaying a random credit award determined by the game program and not by the spin of the wheel itself. The game, therefore, was not deceptive.

Another example of potential confusion concerns the introduction of a skill element into bonus rounds. There have been several such bonus games introduced in the past that did not catch on with the gaming public. Recently, Bally Technologies sought approval for a bonus game based on the Pong® video game. When three paddles are lined up in the 5-reel base game, the player enters a 45-second bonus round during which he or she controls a paddle and is awarded credits for keeping the video “ball” in play. According to Bally, flawless bonus play versus being shut out produces a 7 percent variance in theoretical payout. The Nevada Gaming Control Board has reviewed the game and recommended approval, noting that regulations requiring randomness in the base game do not apply to bonus rounds. The board, however, placed two conditions on its recommendations: 1) there must be a minimum award for reaching the bonus round; and 2) game signage must clearly state that the skill factor is a bonus and not a component of qualifying play. These requirements make it clear to the player that skill is required in the bonus round and that it can directly impact the credits obtained over and above the minimum.

It seems obvious that drawing a clear distinction between bonus rounds that are either wholly random or partially skill-based and providing this information to the player removes any possible element of deception.

Flashing Bonus Symbols

With 10, 20 or even 30 paylines on many modern video slots, it’s a common observation that “almost” reaching the bonus is a frequent event. However, it’s not just that all but one of the bonus-triggering symbols appear often during the base game, but the technology of the game also dramatically highlights these events with multiple visual and auditory emphases. The nonverbal message is, “Hey, look! You just missed getting to the big bonus round!” One need only observe the intense look on many players’ faces as they rub the screen over these symbols before playing the next spin, or excitedly point out the symbols to a neighboring player, to appreciate the effectiveness of this stimulus.

Yet it is clear that these games are not intentionally deceptive, at least not in the sense that the appearance of these symbols is the result of a programmatic override of random selection. No doubt the phenomenon fully complies with the letter of the “near miss” prohibition. However, if entry into the bonus round is only a 1-in-70 event, and all but one of the necessary symbols shows up every three or  four spins (as a result of purely random occurrence), can it be argued that there is an element of deception due to the frequency of non-winning bonus symbols appearing in the game outcome, particularly when these symbols are emphasized by auditory and visual highlights?

We don’t think so. As regulators, we must be careful to not confuse the entertainment value — lights, sounds, colors — of a device with deception. The possibility that some players may perceive certain display combinations as suggesting an imminent bonus event, contrary to the common knowledge that such bonuses are relatively rare random occurrences, does not make a machine inherently “deceptive.” Some players might draw the same erroneous conclusion even if the bonus symbols were not highlighted by auditory and visual emphasis.

Our take is that a machine that merely permits self-delusion is not deceptive, but one that affirmatively encourages mistaken beliefs or erroneous assumptions could be. A machine that randomly displays all but one of the bonus symbols with light and sound emphasis does not strike us as deceptive. If, however, the machine added a verbal or scrolling written enticement (such as, “Oh! You almost got the bonus!”), we would find it more problematic.

Hope Floats

“You pays your money and you takes your chance.” Punch, Vol.10, p.17, 1846¹

Gambling depends to a large measure on hope. When players sit down at a slot machine, they need to believe that a positive outcome is possible despite odds to the contrary. Even the most sophisticated player, who knows that the top jackpot is a million-to-one shot, hopes the next spin will be the lucky one.

Regulators take considerable effort to ensure that the chance is fair and honest. Games are rigorously tested and analyzed to verify that the pay tables accurately reflect game play and that individual game events are random and independent of each other. In the field, security measures (such as individual game inspection) identify and eliminate defective or compromised programs.

As we noted earlier, the doctrine of caveat emptor is particularly applicable to gambling. There is little that regulators can, or should, do to prevent players from projecting their individual hopes and desires with respect to the operation of a wholly emotionless device. The real problem is that any appearance can be deceiving because, ultimately, it’s all in the mind of the beholder.

Footnote
1 British humor magazine recording a common Cockney catch phrase of the day.

Pat Leen, co-owner of Gaming Regulatory Consultants, was a founding member of the Michigan Gaming Control Board. He can be reached at (517) 256-8619 or pleen[at]grcgaming.com.

Tom Nelson, co-owner of Gaming Regulatory Consultants, was the first Director of Licensing and Enforcement for the MGCB and served for 22 years as Michigan’s Assistant Attorney General. He can be reached at (719) 440-6611 or tnelson[at]grcgaming.com.