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The gaming industry is big business in the U.S., contributing an estimated US$240 billion to the economy each year, while generating $38 billion in tax revenues and supporting 17 million jobs.

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What people may not realize is that slot machines, video poker machines and other electronic gaming devices make up the bulk of all that economic activity. At casinos in Iowa and South Dakota, for example, such devices have contributed up to 89 percent of annual gaming revenue.

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Spinning-reel slots in particular are profit juggernauts for most casinos, outperforming table games like blackjack, video poker machines and other forms of gambling.

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What about slot machines makes them such reliable money makers? In part, it has something to do with casinos’ ability to hide their true price from even the savviest of gamblers.

The price of a slot

An important economic theory holds that when the price of something goes up, demand for it tends to fall.

But that depends on price transparency, which exists for most of the day-to-day purchases we make. That is, other than visits to the doctor’s office and possibly the auto mechanic, we know the price of most products and services before we decide to pay for them.

Slots may be even worse than the doctor’s office, in that most of us will never know the true price of our wagers. Which means the law of supply and demand breaks down.

Casino operators usually think of price in terms of what is known as the average or expected house advantage on each bet placed by players. Basically, it’s the long-term edge that is built into the game. For an individual player, his or her limited interaction with the game will result in a “price” that looks a lot different.

For example, consider a game with a 10 percent house advantage – which is fairly typical. This means that over the long run, the game will return 10 percent of all wagers it accepts to the casino that owns it. So if it accepts $1 million in wagers over 2 million spins, it would be expected to pay out $900,000, resulting in a casino gain of $100,000. Thus from the management’s perspective, the “price” it charges is the 10 percent it expects to collect from gamblers over time.

Individual players, however, will likely define price as the cost of the spin. For example, if a player bets $1, spins the reels and receives no payout, that’ll be the price – not 10 cents.

So who is correct? Both, in a way. While the game has certainly collected $1 from the player, management knows that eventually 90 cents of that will be dispensed to other players.

A player could never know this, however, given he will only be playing for an hour or two, during which he may hope a large payout will make up for his many losses and then some. And at this rate of play it could take years of playing a single slot machine for the casino’s long-term advantage to become evident.

Short-term vs. long-term

This difference in price perspective is rooted in the gap between the short-term view of the players and the long-term view of management. This is one of the lessons I’ve learned in my more than three decades in the gambling industry analyzing the performance of casino games and as a researcher studying them.

Let’s consider George, who just got his paycheck and heads to the casino with $80 to spend over an hour on a Tuesday night. There are basically three outcomes: He loses everything, hits a considerable jackpot and wins big, or makes or loses a little but manages to walk away before the odds turn decidedly against him.

Of course, the first outcome is far more common than the other two – it has to be for the casino to maintain its house advantage. The funds to pay big jackpots come from frequent losers (who get wiped out). Without all these losers, there can be no big winners – which is why so many people play in the first place.

Specifically, the sum of all the individual losses is used to fund the big jackpots. Therefore, to provide enticing jackpots, many players must lose all of their Tuesday night bankroll.

What is less obvious to many is that the long-term experience rarely occurs at the player level. That is, players rarely lose their $80 in a uniform manner (that is, a rate of 10 percent per spin). If this were the typical slot experience, it would be predictably disappointing. But it would make it very easy for a player to identify the price he’s paying.

Raising the price

Ultimately, the casino is selling excitement, which is comprised of hope and variance. Even though a slot may have a modest house advantage from management’s perspective, such as 4 percent, it can and often does win all of George’s Tuesday night bankroll in short order.

This is primarily due to the variance in the slot machine’s pay table – which lists all the winning symbol combinations and the number of credits awarded for each one. While the pay table is visible to the player, the probability of producing each winning symbol combination remains hidden. Of course, these probabilities are a critical determinant of the house advantage – that is, the long-term price of the wager.

This rare ability to hide the price of a good or service offers an opportunity for casino management to raise the price without notifying the players – if they can get away with it.

Casino managers are under tremendous pressure to maximize their all-important slot revenue, but they do not want to kill the golden goose by raising the “price” too much. If players are able to detect these concealed price increases simply by playing the games, then they may choose to play at another casino.

This terrifies casino operators, as it is difficult and expensive to recover from perceptions of a high-priced slot product.

Getting away with it

Consequently, many operators resist increasing the house advantages of their slot machines, believing that players can detect these price shocks.

Our new research, however, has found that increases in the casino advantage have produced significant gains in revenue with no signs of detection even by savvy players. In multiple comparisons of two otherwise identical reel games, the high-priced games produced significantly greater revenue for the casino. These findings were confirmed in a second study.

Further analysis revealed no evidence of play migration from the high-priced games, despite the fact their low-priced counterparts were located a mere 3 feet away.

Importantly, these results occurred in spite of the egregious economic disincentive to play the high-priced games. That is, the visible pay tables were identical on both the high- and low-priced games, within each of the two-game pairings. The only difference was the concealed probabilities of each payout.

Armed with this knowledge, management may be more willing to increase prices. And for price-sensitive gamblers, reel slot machines may become something to avoid.

Slot machines feature a number of vibrant sound effects. You may think that these sounds are just part of the entertainment.

However, research shows that sound effects from slot machines are about more than entertainment. In fact, these noises are meant to both draw and keep you playing slots.

Slot machines ringing out with triumphant noises and exciting music aren’t inherently evil. However, the matter becomes more serious if these sounds cause you to play slots longer than you’d like.

Obviously, you don’t want to be convinced to keep spinning the reels beyond what you’re comfortable with. That being said, keep reading to find out more about the study and how you can keep from falling victim to enticing sound effects.

What Research Reveals About Slot Machine Sounds

Mike Dixon, a psychology professor at the University of Waterloo, has been involved in several prominent slot studies over the years. His research on these games’ sounds is one of his best works.

For example, you might bet $1 and only earn back $0.30. However, celebratory noises that ring out from the machine may convince you that you’re truly a winner.

Specifics of the Study

Dixon’s research featured 96 participants. Each gambler played two sessions on a slots simulator.

The professor and his team measured the players’ physiological responses to the slot machines’ outcomes. Wins, losses, and losses disguised as wins (LDWs) were all measured with the sounds both turned on and off.

The gamblers’ palms gave away how they were feeling in each situation. Their palms, which were tested for skin conductance, became sweaty when they got excited. Their heartbeats also became faster during periods of slots arousal.

In the first session, LDWs and wins were reinforced by celebratory noises and animations. In the second, only the animations were left on while the music was turned off.

When the sessions were finished, researchers asked the gamblers which round they had more fun with. The team also inquired about how the players thought they did in terms of wins and losses.

Heart rates were faster and skin conductance tests were greater during the session with sounds. Gamblers also felt like they won more money in the first run.

The reality, though, is that the players severely overestimated how much they won in the initial session. Estimates on wins were 24% in the first round versus 15% in the second session. In reality, the winnings were relatively the same for both rounds.

The study authors concluded that,

“Although sounds may have contributed to players’ enjoyment of the game, sound may also lead to an overestimation of winning.”

They added, “Both of these effects may contribute to gambling problems, such as misbeliefs about the true chances of winning, and persistence that some players experience when playing slot machines.”

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Should You Be Bothered by the Addictive Nature of Slots Sounds?

The study doesn’t exactly cast slot machines and their developers in a good light. Developers purposely add sounds that convince players to gamble longer.

As a result, you may feel leery about playing slot machines or even visiting casinos in general. After all, you’ll hear these noises immediately upon walking into a casino and perhaps be drawn to them.

Assuming you’re able to play responsibly, then you may even find that the music and sound effects enhance your experience. After all, who doesn’t like hearing a triumphant noise after netting a payout?

The key, though, is to fully realize what happens on each spin. You want to understand whether or not you actually won, not just rely on the noises.

Other Factors That Can Attract You to Slot Machines

Sound is far from the only aspect that makes slot machines addictive. Plenty of other aspects make these games alluring, including the following.

Flashing Lights

You can expect to see flashing lights accompany triumphant sounds during any payout. These lights also reinforce wins, no matter how big or small.

Much like with sound effects, you need to be skeptical of these lights. Just keep in mind that a game will light up regardless of how much you win, even if it’s just $0.30.

Themes

The slots world offers a large variety of themes to appeal to many types of players. Fantasy, holidays, sports, and wild animals are some of the most common themes in slot machines.

A typical trend over the last decade involves rolling out slots based on popular movies and TV shows. These well-known themes have become huge hits on casino floors.

A gambler who loves Ridley Scott’s Gladiator, for example, will be attracted to Playtech’s Gladiator online slot. That said, developers know what they’re doing with regard to themes.

Bonuses and VIP Rewards

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The casino industry has done a great job at convincing players that casino comps are more valuable than they truly are. Some gamblers will actually extend their slot sessions just to upgrade to a better comp.

You should realize, though, that these bonuses and rewards aren’t worth nearly as much as they appear to be.

In fact, most slots VIP rewards are only worth around $0.02 per $1 in theoretical losses.

Considering the chances of you losing 50x the value of comps, you certainly don’t want to overestimate the worth of these rewards.

Jackpots

Most slot machines feature some kind of jackpot. Many of the most popular games offer seven, or even eight figure top prizes.

For example, Microgaming’s Mega Moolah has paid out a number of multimillion-dollar prizes. In 2019, it delivered a record-online slots jackpot worth over $21 million.

This prize is an exception to the norm. However, the fact stands that jackpots worth six, seven, or eight figures draw big crowds.

Psychological Factors

Slots makers don’t just rely on physical aspects like sounds and flashing lights to attract gamblers. They also program games to take advantage of certain psychological factors.

For instance, LDWs convince players that they’re winners even when they lose money overall.

Here’s an example of an LDW:

• You bet $0.50
• You spin the reels and win $0.10
• ($0.50) – ($0.10) = $0.40 net loss
• Music begins playing and the machine flashes
• You feel like a winner but you lost $0.40

Slot machines have the ability to put you into a trance based on their speed of play, animations, and other entertaining factors. You may begin mindlessly spinning the reels without realizing how long you’ve been in the casino.

This scenario is what’s referred to as a slots trance. A good way to keep yourself from falling into these trances involves being aware of the current time and how long you’ve been in the casino.

Gambling establishments don’t put clocks on the wall for this very reason. But you can simply refer to your smartphone every so often to check the time.

Friends Who Play Slot Machines

Slot machines may seem like a solo affair. However, they can turn into a social excursion when you’re with a friend.

Playing slots with a friend or two definitely adds to the experience. But it also serves as another draw to these games.

As long as you and your friends play responsibly, then gambling with buddies is a positive aspect. On the other hand, you definitely don’t want to gamble too often with those who go overboard on slot machines.

Conclusion

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Dixon’s research proves that slots sound effects can keep you spinning the reels longer. They provide positive reinforcement on all wins, even those that come in LDW form.

If you’re playing on autopilot, you’ll be more likely to fall for these tricks. After all, the sounds are purposely designed to make you feel good about any payout.

The key is to ignore the noise and analyze each spin. Did you actually win money during a round, or did you just win a small payout that doesn’t even equal the spin cost?

The latter is an aspect that you should be fully aware of while playing. Furthermore, you need to know when you’re truly winning money versus losing it.

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Awareness will help prevent you from playing too long. That being said, pay attention to each spin and don’t be fooled by the sound effects.