It looks like a bone yard — a warehouse of ‘90s reel slot titles. The newest 3-reel stepper game in this room is an IGT Triple Diamond, circa 1996. You might guess that this is some forgotten casino roadhouse between Las Vegas and Reno, but it’s not. It’s the high-limit room at Barona Valley Ranch Resort & Casino, one of the hottest gaming properties in California.
In a world where the lifespan of a video slot title is quickly approaching six months, it is amazing that reel slots more than a decade old are still the preferred machines in the quarter, dollar and high-denomination segment. It is not, however, a surprise.
Low-denomination video has been the growth story since the late ‘90s brought the acceptance of TITO. Over the last decade, slot manufacturers have focused almost exclusively on low-denominations, with most of their creative energy devoted to new penny game titles. Manufacturers myopically ignored reel slots in an effort to cash in on the video craze. In fact, if you believed the hype back then, you’d have thought steppers were going to disappear by 2008.
Obviously, that has not happened. Just like some slot players want a lot of time on device, which they can achieve on penny video slots, others prefer the thrilling-but-achievable jackpots of higher-denomination play. And it’s tricky to get a video slot to work in any denomination besides penny or nickel. It’s not that it can’t be done; it just hasn’t been done very well yet. With a lack of quality development (with some noted exceptions, like Bally’s Monte Carlo™ series), the older machines remained on slot floors, waiting for game developers to put some effort into creating compelling dollar products. Now reel slots are experiencing something of a revival — and it’s about time. Driven by more lines, 5 reels and a lower minimum bet, these games are a hot new category. Players have always liked penny reel slots, but casinos couldn’t afford to put them on the floor with only three coins per spin. With new models offering 25 lines and more, it starts to make sense, and customers are flocking back to these stalwarts of the gaming industry.
But even with the latest 5-reel stepper craze, there is still a segment of the market that isn’t getting any respect: the dollar player.
The Dollar Player
The dollar player is very different than the low-denomination video slot player. She is looking for a respectable payback return and a chance to win something a little more significant. She likes the mechanical slots because she trusts them and, more importantly, she understands them. There are not a lot of confusing lines and funny cartoon graphics to figure out. When she pulls the handle, she can easily see if she has won or lost. She has probably also been in love with the mechanical reel slots since her first trip to Las Vegas 30 years ago. There is an imprinting that occurs with slot machines. When people first learn to play and hit that big win, they remember that game for as long as they live. If they get a chance to play it several more times and have a similar experience, they are hooked for life. Given the chance, players will develop a loyalty for a game, even down to the machine’s exact location on the casino floor. Try moving some of those Blazing 7™’s or Red White & Blue™’s around, and see how many complaints you get.
It isn’t just habit that keeps dollar players coming back, either. These all-but-ignored reel slots have held their 40 and 50 percent floor share in the wake of so much video development thanks to a concoction of pay-back percentages, minimum and average bet, paytable, and volatility.
Some casinos have tried to put penny slot games in a dollar denomination. However, for the most part, penny video products have been designed for high hit frequency and time on device. It doesn’t reward a player in the same way a dollar game does. The mapping of the pays for a penny game doesn’t provide the same play experience that a dollar player is looking for. There is a true art to choreographing the frequency and size of wins, which is closely tied to the level of wager. With dollar product, players talk about “tray money,” referring to mid-level wins that keep them going while they wait for the $1,000 jackpot. The size of the jackpot is also critical in that it must be significant but achievable. For this reason, translating penny jackpot awards into a dollar game becomes a challenge. Plus, the dollar player has an instinct for those games that have a better return.
Now, by definition, since reel slots are usually quarter denomination or above, their hold percentages tend to fall in the 90 percent and up category. Dollar slots are commonly in the 92 percent range. Some would argue that they should be set even higher; after all, players are betting $3 a whack. One critical distinction between dollar reel slots and penny or nickel video slots is the minimum bet, which drives the hold percentage a casino is willing to set. Even though penny video players can bet $10 per handle on a 1,000 credit max bet game, the operator expects to get only $.50 to $.75 per pull, and therefore pushes up the hold percentage of the game. The better players get penalized with the lower pay back.
I recently got into a robust conversation at CasinoFest4™ with some good friends (Bruce Rowe from Bally Technologies, George Levine from CDI and Mark Pace from WMS) about hold percentages. One camp firmly believed that a player can’t tell the difference between an 88 and a 92 percent game. The other argued that it is tribal myth, as opposed to player perception, that pushes higher pay-back percentages. This now-famous “humidity factor” theory clearly states that the moisture content in the air from where the slot director originates is inversely proportional to how loosely the machines are set. I happen to err on the side that players can tell the difference, especially dollar players. True, I am a liberal even when it comes to the gambling business, believing every slot player deserves a bigger chicken in his pot. But being from the school of Warren Nelson, Bill Boyd and Michael Gaughan, I’m convinced that a more-satisfied player breeds loyalty and makes us all more money in the long run. Perhaps infrequent tourist players can’t tell the difference with their $100 bankroll, but get enough of them on a plane headed back home talking about how well they did (or did not do) at Sassy Sally’s, and it will change how they wager their money next time.
The Next Hot Slot
Nevertheless, almost every slot director I have ever spoken with has told me that there is a shortage of good dollar product, even though their dollar games are making proportionally more money than their respective footprint. It feels like a golden opportunity for manufacturers. Of course, it doesn’t just have to be in stepper games, but in my mind, they hold the greatest potential.
Some major manufacturers are already realizing that potential. WMS recently introduced some 3-reel, 5-coin games like Wild Zone and 2X Wild & Crazy™, which have fantastic early results. Bally and Konami, meanwhile, are introducing minimum bet typology on some of their new stepper products. This betting method forces players to cover all lines on lower-denomination games to raise the average bet and justify lower hold percentages. This should allow for more dollar-type math and top awards. I know IGT will be showing a lot of new dollar products at G2E this month.
There are cycles in gaming business, like everything in life. What is popular today will eventually get replaced with something newer and more exciting. In the late ‘90s, 3-reel steppers were pushed aside for nickel video machines, and then penny video became the mantra. Now penny reel slots are coming back. Will dollar reel slots, armed with the latest technology, more bet options and bonusing features be the next hot slot category? That will remain to be seen, but one thing is for sure: The dollar player certainly is not dead, nor is her desire for mechanical reel machines.
Mick Roemer is the President of Roemer Gaming, a product development and consulting company. He can be reached at mroemer@roemergaming.com or (702) 497-3355.
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