[We’re pleased to welcome authors Dr. Anthony F. Lucas of the University of Nevada and Katherine Spilde of San Diego State University. They recently published an article in Cornell Hospitality Quarterly entitled “How Changes in the House Advantages of Reel Slots Affect Game Performance,” which is currently free to read for a limited time. Below, they reflect on the inspiration for conducting this research:]
Our motivation for this research stemmed from inquiries regarding extant policies for par selection and from the results of our previous research projects. Our prior work suggested that the highly skewed outcome distributions of modern slot machines would obscure even considerable differences in programmed casino advantages (i.e., pars), especially given the limited number of trials produced by individual players. In spite of these results, many industry stakeholders and casino operators contended that experienced players from high-visitation segments would be able to detect such differences over time. It was for these reasons that we decided to conduct the longitudinal field study with data collected from venues relying on a repeat clientele.
Our work is the first to focus on the longitudinal effects of par on unit-level game performance, within live casino settings. The results of our study were surprising in a couple ways. First, the high par games outperformed their low par counterparts, in terms of theoretical win. This surprised many operators who believed that frequent players would quickly recognize the value of the low par games, which were located a mere three feet away. Second, there was a lack of evidence of play migration, i.e., from the high par games to the low par games. The time series analyses failed to indicate a statistically significant and positive change in the magnitude of differences for both daily coin-in and theoretical win levels, over the sample periods. That is, the data failed to indicate a growing recognition of the differences in pars. If players were able to detect such differences we would expect to see both increased play and theoretical win levels on the low par game, over time. We would also expect to see simultaneous decreases in the same metrics on the high par game. To the contrary, these difference metrics remained stable within each two-game pairing, in spite of the clear economic disincentive for players to risk and lose bankroll to the game with the greater par.
Our results present an empirical challenged to the innervate wisdom regarding player hypersensitivity to par settings. Other slot operating paradigms related to “price” positioning and revenue optimization strategies are also contradicted by our findings. Because these all represent critical operating platforms, we are not sure how this work will ultimately impact the gaming industry. In large part, it depends on the willingness of those within it to re-examine longstanding beliefs and predispositions, and place evidence above instinct. While we expect some operators to accelerate in-house experimentation, it is likely that many will wait for future research, which we have in the pipeline.
It should be noted that without the cooperation of willing casino operators this research cannot be completed. They deserve a great deal of credit for bringing this work to light. Open minds bring positive change.