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Why do casinos move machines?20 April 2009
Dear Mary Pat,
Let's start with your last topic, why casinos move games. Casinos move games for many reasons. They might be moving slant-tops and uprights, for example, to improve sight lines. They might be reconfiguring their layouts to create shorter aisles and more comfortable niches for the players to play in. Another reason casinos might move machines is to move popular into underperforming areas to see if they can improve the results in those areas. One final reason casinos might move machines is because they have an aisle in which they traditionally put new machines and now it's time to make room for another batch of new machines.
Casinos remove games for many reasons also. The usual reason is because they think they can make more money with a different game. Casinos also sometimes turn over a portion of their slot floors to slot manufacturers and let the manufacturers determine which games to put in their areas.
As for casinos dropping the paybacks on new machines after they've been on the floor for a while, I don't think the economics of this strategy works. New machines usually go through a honeymoon period in which many players want to give them a try. Demand for these machines is high enough that casinos could pay the statutory minimum on them and they would still get play. After the honeymoon period is over, the demand is down and so casinos should lower the price to play to stimulate demand.
But under your theory, the casino leaves money on the table by having a low price to play during the high demand period and then earns no money because the machines sit idle after their paybacks have been lowered. Wouldn't they have been better off leaving the payback percentage the same and maybe getting some play on the machines? Some play is better than none.
Another problem with your theory is deciding when to raise the house edge on the machines. How long should a casino wait to raise the house edge and soak it to the players? People visit casinos with different frequencies. Just because the machines are now old to you, they aren't old to someone who visits the casino less frequently than you do.
Haven't you ever played a bank of machines and done well on them sometimes and done poorly on them other times? That's the most likely explanation for what you have experienced. That and some selective memory, remembering the times you have done well on new machines and poorly on the same machines once you consider them old and forgetting the times you have done poorly on new machines.
There may also be a self-fulfilling prophecy at work. You think the new machines pay well, so you may be willing to feed them through a cold streak, maybe even quitting with a profit. Once you consider the machines old, though, you think they don't pay as well so you won't try to play through a cold streak and you're more likely to quit with a loss.
Best of luck in and out of the casinos,
Send your slot and video poker questions to John Robison, Slot Expert, at firstname.lastname@example.org. Because of the volume of mail I receive, I regret that I can't reply to every question.
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