
How casinos get you to spend more money - bennesvig
http://www.vox.com/2014/8/7/5976927/slot-machines-casinos-addiction-by-design
======
oscilloscope
An interesting experiment in gambling addiction was the Bitcoin betting site
Just-Dice. There were two ways to participate:

1) Choose your bet size and chance to win. The house always had a 1% edge,
reflected in the payout. This edge is much lower than slot machines in Vegas.

2) Invest in the house. Every bet affected your bankroll based on your %
invested relative to the total bankroll. The house edge was on your side.

The operators of the site, Deb and Doog, encouraged anyone trying to make
money to invest. They argued the expected value was positive, even though
high-rollers sometimes went on winning streaks.

Despite the warnings/statistics Doog produced and the fact that there was a
+EV way to play (investing), players still got addicted to the dice game
itself. The rolls resolved in a fraction of a second, so some players would go
on a tear and bet 3-4 times a second. The minimum payout was 1% of the house
bankroll, so single bets of several hundred bitcoin were possible.

Several high-rollers ("whales") played for 14-16 hours straight in a state of
intense "flow", generally winning early on and losing everything by the end.
Sometimes hundreds of thousands of dollars of bitcoin (1000+ btc) lost in a
single session. Sometimes coins would come out of cold storage to continue
playing. The site had a chatroom where even investors encouraged the player to
stop before they were ruined, but the players would generally deny addiction
and continue rolling.

After losing it all, some players described the experience they were having as
a chemical rush- as if they had just taken a drug.

Even users who were invested and had made sizable profits from investing were
not immune to the lure of the game. Several withdrew their invested bankroll
just to "play around" and fell in the same inevitable fashion.

~~~
DanBC
That's a deeply disturbing account of people knowingly exploiting vulnerable
people to extract maximum money from them.

~~~
darkFunction
Who exactly was being exploited here? Everything was completely transparent.

~~~
coldtea
Something being transparent and people being exploited is not contradictory.

If someone needs food because he is starving and you make him a (trasnparent)
proposition to, say, have sex with you in exchange for food, he is still being
exploited.

~~~
true_religion
Is every case where you don't commit charity to the starving exploitation or
is it only since sex is involved?

~~~
coldtea
No, only the cases where you, you know, exploit the starving to get something
out of it.

You could not commit charity without also asking them to have sex with you (or
work for minimum wage for you).

~~~
true_religion
Define 'exploit'. If people are starving, essentially if you don't feed them
for free, you're exploiting them unless you too are starving.

That's the rule of charity that I live by. But ofcourse people have different
definitions of exploitation, because like 'evil' its a pretty nebulous word.

~~~
coldtea
> _Define 'exploit'. If people are starving, essentially if you don't feed
> them for free, you're exploiting them unless you too are starving._

Well, you can either feed them for free, or if you DO want their work, pay
them a fair compensation, even if you can get away with paying them a near-
substinence BS wage.

Feeling good with yourself with paying a BS amount because "at least I gave
them work and they won't starve this way" is the basis of modern exploitation.

Sure, what's "fair" might not be scientifically and mathematically derived
value, but it's not like it's totally opaque either. If your company is
enjoying large profits, you pay your execs top dollar for their golden
parachutes, and you are paying your employess just enough to live hand-to-
mouth, then increase that.

------
doomlaser
The straight-up gambling industry relies on whales in an eerily similar way to
many f2p games.

From the linked WSJ article [1]:

"The Bwin data also offer a peek at the economics of the casino industry that
only insiders normally glimpse. Among the findings is an extreme reliance on
revenue from a small number of gamblers.

Of the 4,222 casino customers, just 2.8%—or 119 big losers—provided half of
the casino's take, and 10.7% provided 80% of the take.

Such revenue concentration long has been quietly acknowledged in the casino
industry, but the Bwin information may be the first to show it with hard
public data."

Compare that to the f2p industry. From Re/Code in February [2]:

"In a mobile monetization report released today, app testing firm Swrve found
that in January, half of free-to-play games’ in-app purchases came from 0.15
percent of players. "

"Some game companies talk openly about the fact that they have whales, but
others shy away from discussing them publicly. It costs money to develop and
keep a game running, just like those fancy decorations and free drinks at a
casino; whales, like gambling addicts, subsidize fun for everyone else."

[1]
[http://online.wsj.com/news/articles/SB1000142405270230462610...](http://online.wsj.com/news/articles/SB10001424052702304626104579123383535635644)

[2] [http://recode.net/2014/02/26/a-long-tail-of-whales-half-
of-m...](http://recode.net/2014/02/26/a-long-tail-of-whales-half-of-mobile-
games-money-comes-from-0-15-percent-of-players/)

~~~
hopfog
I've worked in the industry for one of the biggest online brands and can
second this. It was not unusual to see a single customer spend over a million
euros. We even had a couple who maxed the account limit of 5 million euros and
had to create a second one.

These VIPs have their own account managers who often talk to them on a daily
basis and they are given lot of gifts which are expensive (trips, luxuries
etc) but nowhere near the sums they are spending.

~~~
rebel
Very interesting information, but I can't tell which industry you mean as the
parent was referring to both casinos and f2p games? I assumed f2p but I've
never heard of account managers giving gifts in f2p games, that would blow my
mind.

~~~
hopfog
Sorry, I was referring to gambling.

VIP account managers in F2P is an interesting thought. I wonder if they exist.

------
kens
I read a paper a while ago that explained a bunch of tricky design that goes
into slot machines. The odds of a particular symbol on a reel showing up
aren't uniform - they use "virtual reels" behind the scenes. The reels are
designed to show a lot of "near misses" where you almost win. They have a lot
of partial "wins" that pay less than you put in. They "nudge" reels so it
looks like you're getting closer to a win, but the odds don't change. They
arrange the reels so you see a lot of "good" symbols, but not in places that
actually help you.

I'm not sure this is the paper I read originally, but it explains all this in
detail (ignore the dodgy domain name): [http://stoppredatorygambling.org/wp-
content/uploads/2012/12/...](http://stoppredatorygambling.org/wp-
content/uploads/2012/12/PAR-Sheets-Probabilities-and-Slot-Machine-Play-
Implications-for-Problem-and-Non-Problem-Gambling.pdf)

~~~
Gusfoo_2
> The reels are designed to show a lot of "near misses" where you almost win.

That used to be true but is not any longer after the regulator cracked down.
It wasn't the reel design (the strips are fixed) but instead the reel position
value.

------
GuiA
I come from a country where casinos are much rarer than they are in the US,
and I recently went in my first casino ever after living in the US for 4+
years.

So I entered this weird place in Montana, with colorful machines everywhere. A
more experienced friend instructed me to play a certain machine, in which I
put $5 and got 100 virtual "tokens" in exchange. Then the machine asked me to
pick 7 random numbers from a 10x10 grid. I touched the 7 numbers, and pressed
a flashy "Go" button. The machine "randomly" (of course I have no certainty
that it was truly a random process) picked 7 numbers, and only 1 of mine
matched. Total gains: 0. I repeated the process several dozen times: select
your numbers, press a button, watch the machine make funky sounds as it
"randomly" selects number, see if yours match. The best round I got was when 3
of mine matched, and I got back something like 10 credits, going from 47 to
57. 10 minutes later, I was at 0.

It strikes me as a tragedy of our modern society that such contraptions make
for a significant portion of state income, and that they are as popular as
they are. It is sad that the average American citizen does not have a
sufficient grasp of basic probabilities to even consider putting money in such
a machine, because it means that the school system essentially fails at
preparing kids for the real world. And it is sad that governments are
encouraging those temples for theft to prosper the way they do. Because it
really is theft - just a kind of theft where the victim is coaxed into it with
the help of smoke, mirrors, and free booze (not unlike the phone scams that
prey on the elderly and manage to extract thousands of dollars from them). And
not only is it institutionalized theft, it is institutionalized _classist_
theft, as the vast majority of the victims are from the lowest socio-
economical classes of society.

~~~
dm2
There only in a few cities in the US where you can gamble like that, it's
illegal in most places.

Las Vegas, Atlantic City, Indian reservations, cruise ships, and casino boats
are the only places I can think of that allow gambling in the US.

I'm not sure if there is a loophole for horse racing tracks or how that works.

Video gaming machines might be what you what you saw but they're really not
much different than an arcade that spits out tickets. I think those video
gaming machines are becoming more rare / illegal.

Our brains aren't wired to correctly calculate the fact that we're more likely
to lose than win.

Same with lottery tickets, people get addicted to those things and don't stop
until they run out of money. Even people in Haiti would receive a little money
(meant to be used for food and other essentials) and spent it on lottery
tickets.

~~~
xxs
I believe gambling is legal in Michigan[1]. It was done in attempt to bring
some money in the state.

[1]:[http://www.gambling-law-us.com/State-Laws/Michigan/](http://www.gambling-
law-us.com/State-Laws/Michigan/)

~~~
dm2
Looks like they're making a lot of money from those taxes, hundreds of
millions per year.

I've never heard of MGM Grand Detriot, interesting,
[http://en.wikipedia.org/wiki/MGM_Grand_Detroit](http://en.wikipedia.org/wiki/MGM_Grand_Detroit)

------
FreeKill
From a software/hardware engineering perspective, how difficult is it to get
into the slot machine game? I imagine it must have quite a rigorous set of
guidelines and testing procedures that must be followed diligently to avoid
running afoul of regulations set out by gambling states.

Also, I assume it must require a lot of trade show visits to try and sell
major casinos on your machine, since the number of customers for your machines
is severely limited. Is it an upfront cost business (aka, they pay you $XXX
for each machine) or is it more of a partnership with the makers where the
casinos share profits on the machines with the developer/designers? Off the
top of my head, I'd think the latter would be more feasible as I'm sure
popularity of machines must be somewhat short lived, as there always seems to
be different machines all the time.

Anyway, I'm curious if anyone with more experience in this area could give
some brief highlights on what it's like working in that arena. I've always
been curious :)

~~~
joezydeco
I worked in the business for a number of years and still have
friends/colleagues that are there.

From an engineering perspective slot machine design isn't very hard at all.
It's pretty much video game design. There's a relatively recent CPU putting
down images, playing back video, doing some light/sound choreography, and
maybe doing some mechanical motion on some games. Let's put it as slightly
more complex than Candy Crush but way less complex than writing Halo. There's
also a mechanical component with artists and designers making cabinets, art
glass, and wacky add-ons that sit on top or around the machine.

The hard work in slot machine design is in the _math_ of the slot machine.
You're trying to design a game that balances something interesting on-screen
with enough volatility that keeps players hooked. If you decimate their bank
in the first 100 spins that player will never come back. One typical way to
manipulate this is through the secondary games or bonus games that pop up on
certain reel combinations. At first this was a way to work around certain
patents (the most famous being IGT's _Telnaes_ patent) and now players just
come to expect various levels of extra action when certain slot reels are hit.
Every player likes something different, of course. IGT's _Double Diamonds_
reel-spinning slot is over 25 years old and players still look for it.

The math also has to jive with the gaming board. Certain states will mandate
minimum payout percentages, or a mixture of these that average a certain
payout. (This is why dollar slots in Vegas pay way better than penny slots. As
long as all the action in the casino averages to the legal minimum, they're
okay). Your typical slot manufacturer has a number of math/stat MS or PhDs
working out the numbers on paper as well as a testing department that tries to
verify the math empirically. I'll say "tries" because some designs are so
complex and non-deterministic or dependent on player choice that it can't be
verified entirely on paper anymore. Almost all American jurisdictions employ
independent gaming labs that inspect the code and verify the math as well
before the slot is approved to release in a given state. If you can get
approved in Nevada, you're usually good everywhere as a rule of thumb.

And then yes, the theme of the slot has also become incredibly important.
Licensing pop culture items (movies, TV shows, dead musicians, celebrities,
etc etc etc) is a constant fight between the manufacturers to capture and
leverage into a usable slot idea. Some think it is creatively lazy to grab the
next hot movie and turn it into a slot. Some think that's what you need to do
to attract people's attention in a visually crammed environment. C'est la vie.

A slot machine designer worth his salt can mix and meld all of these things
into an interesting game. New and different game mechanics are hard to come
by, though. When something _does_ hit, you'll see that model replicated dozens
of times with slightly different math or new themes slapped on top of it. You
throw a lot of shit at the wall to see what sticks.

Business wise, up until a few decades ago, slots were sold by manufacturers
and entirely owned by the casinos. In the last 20 years or so this has
transitioned into a participation relationship where the manufacturers own,
maintain, and operate the games themselves and share a percentage of the
handle with the casino. This has made the business a lot more cutthroat
because a streak of lousy games can get you kicked off a property (or
corporation) entirely. This is the downside of throwing shit at the wall, so
you test and test continuously at smaller properties. Participation also
allows interesting game mechanics like multi-casino slots (like Megabucks)
where the manufacturer is holding the jackpot in an interest-bearing account
in their reserves. Think about that when the jackpot is in 9 figures and
nobody has hit it for a year.

Anyway, if you're really interested, the big companies are always hiring.
These days it's IGT in Reno, NV and WMS in Chicago, IL. There are smaller
companies here and there (Konami, Aristocrat, Mikohn) and then a constellation
of independent design groups that consult and design games on spec for the big
dogs. Most designers work their way up from programming games or designing art
for slots but if you have any video game or casual game experience there's
always room for new talent.

~~~
jedberg
> IGT's Double Diamonds reel-spinning slot is over 25 years old and players
> still look for it.

It's the only slot I'll play because it has the best pay table in the casino.
It's the only one that pays 1600 coins for a 2 coin bet with sufficient
payouts otherwise.

~~~
toong
Euhm, I don't know anything about slot machines, but isn't the (statistical)
expected value not always about the same ?

The payout-distribution could be different, maybe that's what you like about
it ?

(anecdotal: I calculated the expected value for a few games on a gambling site
a few years ago and they were all about the same, for every game, for every
size of bet: expected value was around .96 dollar for every 1$ bet. YMMV.)

~~~
lewispollard
That expected value is known in the industry as RTP - return to player - and
is generally in the 85-98% range. Once a game is certified as having that RTP,
it can't change - BUT the standard deviation can vary wildly from machine to
machine, with some paying out little and often, and others having a more
'lumpy' distribution of not paying out much and then paying out large prizes
every so often. High rollers will often go for these lumpier machines, staking
large amounts and hoping for the elusive x1000 multipliers.

~~~
joezydeco
Very good point. But players should also know that a given machine can be
released in multiple payout levels. You can have a row of identical games but
the game in the middle could be set at 95% and the others around it set to
87%. And the casino doesn't have to identify which is which. Sometimes you can
glean this from the payout tables, you can almost always glean it from video
poker games.

There's a voodoo science around how casinos are laid out and how games are
arranged to maximize cashflow. You can get a degree in this at UNLV.

~~~
lewispollard
I don't know about the US - but here in the UK all machines are required to
clearly display the return to player value in the terms of the gambling
license.

~~~
joezydeco
Yeah, sorry about the US-centric answer. Having payouts labelled is a very
nice thing. Obviously Las Vegas was built on the players not knowing or
understanding their long-term odds.

------
leeoniya
pardon the hijacking, but what's with this trend of everything above the fold
looking like an entire complete page with almost no content? half the time i
land on sites like this, i sit there for 5 seconds wondering where the hell
the content is. the scrollbar is _not that visible_ , guys. if i dont see
partial content hiding at the bottom of the fold which would clue me into the
fact that there's 10 more pages worth of scrolling, i'm not gonna "get it" by
noticing a scroll bar.

the pretty UI is not worth the horrid UX

EDIT: i think repliers are focusing too much on scrollbar visibility. this
isnt the main issue. i have no problem with the scrollbar being visible on
other sites. it's plenty visible on my Win 8.1 / Firefox 1080p res. The
problem is that A) i dont want to scroll an entire page before i begin reading
and B) i dont want it to be the primary (and sole) indicator of additional
content. I have to look over to the side to get the only cue, it's really
annoying.

/rant.

~~~
dm2
I've noticed that too and also do not like it.

I'd prefer the traditional style article and thumbnails where necessary (not
just for the sake of cramming images into articles).

Maybe they've done testing and this style article gets read/shared more, it
certainly looks more official and permanent but it's still just a blog post /
news article.

This is where I first saw it, and it's annoying to read the huge text and
adjust to the images that float under text: [https://medium.com/war-is-
boring/that-time-an-air-force-f-16...](https://medium.com/war-is-boring/that-
time-an-air-force-f-16-and-an-army-missile-battery-fought-each-other-
bb89d7d03b7d) Apparently they never even considered what it would look like
when someone tries to print that article, the 1st half of the page is a solid
black image, then the text is laughably large.

~~~
NotAtWork
That page you linked is horrendous!

~~~
dm2
This link from the same site is on the front page of HN today:
[https://medium.com/@sachagreif/in-the-past-couple-years-
star...](https://medium.com/@sachagreif/in-the-past-couple-years-startups-
have-started-realizing-that-good-design-can-make-the-difference-2fdeb90d390a)

It's a decent article and fairly interesting (though not surprising), but the
layout is like navigating a minefield, it's still better than the multi-page
layouts that are common on some sites. Try to print this article though, 17
pages. 17 pages.

Their main business is offering content in a format that is readable and
accessible to users. One solution would be to have an alternate layout with
normal sized text, no giant header image, and thumbnails rather than half-page
images, and that layout preference would be both saved in a cookie and
settable via a URL parameter.

------
downandout
All of this is interesting from an engineering perspective, but the reality is
that casinos don't have to use engineering to get you to spend money. They
rely on addiction for their income, and there's no evidence that better slot
machine technology has swayed addiction rates one way or another (although
TITO - ticket-in ticket-out - has made it easier to lose one's money faster).
According to one study, 2.8% of the player base accounts for 50% of net casino
win; the top 10.7% provides 80% of the win [1]. Without the very small
percentage of their visitors that become addicts, every casino on the planet
would cease to exist in short order.

[1]
[http://online.wsj.com/news/articles/SB1000142405270230462610...](http://online.wsj.com/news/articles/SB10001424052702304626104579123383535635644)

~~~
DanBC
"Fixed Odds Betting Terminals" are in UK news quite often.

[http://en.wikipedia.org/wiki/Fixed_odds_betting_terminal](http://en.wikipedia.org/wiki/Fixed_odds_betting_terminal)

[http://bbc.co.uk/news/uk-politics-25619683](http://bbc.co.uk/news/uk-
politics-25619683)

[http://bbc.co.uk/news/magazine-22934305](http://bbc.co.uk/news/magazine-22934305)

[http://m.bbc.co.uk/news/uk-scotland-glasgow-
west-27926213](http://m.bbc.co.uk/news/uk-scotland-glasgow-west-27926213)

Glasgow has a population of about 600,000 people. Gamblers are not travelling
to Glasgow - gambling is legal in Scotland so these machines are available in
most towns. £200m is $336m

------
spacefight
"Alternatively, Schüll discovered, some video machines actually make internal
adjustments if they notice that a player is on a losing streak and is reaching
their "pain point." This has to be done carefully — it's illegal for casinos
to change the odds in a game once a player has started playing. But, she says,
casinos can reduce the volatility of a game in a way that still preserves the
overall payback percentage. That's technically still legal."

Yeah, right... technically legal but that sounds totally rigged to me.

~~~
adrianmsmith
That was the only thing I didn't quite understand in the article, what does
"volatility of a game" mean?

~~~
spacefight
It might be realted to how you feel being on the winning/losing side while you
play. If you give more wins in a shorter timeframe, the player will feel is on
a winning streak even though the overall odds are the same...

------
fiatmoney
I would heavily recommend the book they mention ("Addiction By Design"). In
addition to the bits about the casinos, there are a lot of fascinating
insights into the minds of committed slot machine gamblers.

------
wmt
Strange that adding smaller wins to slots has only just arrived, as such more
complex betting systems have been proven to make playing feel more rewarding
for decades.

E.g. in Finland all supermarkets and roadside cafes have slot machines, and
complex betting tactics described in the article have been there at least from
the 1990s. They do differ a bit from Vegas slots, as the profits go to charity
and the jackpots are ~50€, but still they are carefully designed to maximise
the profits on the long run.

------
netcan
I like the choice of 'story' or 'full interview.'

------
unsignedint
So some thought about this, as I used to be regular of a local casino, not
because I felt I had to go, just to play with cash vouchers, they used to
send, maybe occasionally putting in a 10 dollar bill or two. I didn't make
money out of it, but I did not lose my own money. I guess when they realized
they are not making money from me, they stopped sending me those vouchers...
Bummer! :-)

Those machines are really designed to salami slice players. You can play many
of those machines from a penny per line, which equates to about 15 to 30 cents
per play for full lines, depending on a machine. There are people who play at
higher stakes, like a max bet of $2 per play, or even $5, but observing
people, majority seems to be played at much lower bet of a penny or two per
line, so I'm guessing they consists of high fraction of profit a casino is
making from.

It's fairly easy to lose a sense of spending when you are doing literally a
thousand play per hour. (At 30 cents per play, You'd be spending fairly long
time to spend $20, or even $10. At this level, a typical win would get you
around $2 to $5, maybe $40 if you are quite lucky -- and perhaps real jackpot,
being very, very rare, $200 or so.) Those "wins" really give you the joy that
you'd anticipate for the next, and a lot of time, they'd put more money in
just to anticipate another win, because when they have lost plenty of money,
it's about a time they will start winning, right?

Knowing someone who really got into it, one sign I started seeing from them is
that they'd start making a statement like "I'm not playing it for money, I
play it because the game is fun." He would play the game literally for hours
per session, often visiting there multiple times a week. Usually ends up
losing -- maybe the only good thing is that he'd have accumulated quite a bit
of free restaurant credits.

So if you are inclined to play, here's some suggestions, though for those
people who would feel these suggestions are useful probably find the best is
not to play at all:

1) Set a budget -- don't bring extra money. (And don't bring ATM card/credit
card if you feel like you can't resist getting extra money out of them...)

2) Record every win/lose -- I've had Google Doc that keeps track of every
wins/lose every machine. Every time I cash in, I'd record, every time I cash
out, I also record that, that would give me balance sheet how much I'm
spending/making.

3) Bet generously -- Don't bet a penny per line, go higher. You won't go
anywhere with such low bet anyways. You'll have a better chance getting a
better outcome going through that $20 in 2 minutes than spending 2 hours on
it. Yeah, it may only last 2 minutes, but then you have good reason (See #1)
to leave at that point -- and you are giving less chance for a machine to
alter your psychology.

~~~
nostromo
All great tips.

Once I had a big win (for me) in Vegas playing craps. I walked away with like
$2000, and each of my friends did (to varying degrees) as well.

So, what did we do? We lost it all back over the rest of our vacation.
However, that big win did something chemical in my brain. I remember it very
well and think back fondly of it. But I don't even remember how I lost it all
back. The win is still salient and the losses forgotten.

I don't regret it because I had a great time, but all of your tips apply. 1 &
2) It's easy to remember your wins and forget your losses, so budget and keep
track. 3) Go in big, because the more you roll the dice, the more likely it is
you'll revert to the mean.

I'd add one: 4) don't use the machines and learn one of the table games. The
odds are better and it's a social interaction, rather than an expensive video
game.

~~~
unsignedint
And to amend to your 4), if you must play on machines, learn to play video
poker (I personally like Jacks of Better variant) as they often have a
slightly better payout, and at least you are doing "some" work :-)

~~~
joosters
Definitely. Unlike slot machines, it is actually possible to tell what the %
returns are on a game of video poker (but unlike a slot machine, you have to
play it right in order to do well)

See [http://wizardofodds.com/games/video-
poker/](http://wizardofodds.com/games/video-poker/) for details of the
expected % return from these games. You'll still likely lose money, but it
will last a lot longer :)

