Even when you're losing, slot machines boost your morale — and casino profits

Innovation Hub
A visitor to the Shell Club, a sports and social venue, plays a slot machine near the Shell Oil refinery in Geelong, Australia.

There’s a lot more to slot machines than just pushing a button or pulling a lever and hearing the clink of coins: Thanks to some complicated algorithms and talented behavioral scientists, slots are now big business, delivering as much as 75 to 85 percent of casino revenues.

“Inside they’re absolutely different creatures [than they were], and they can give you an absolutely different experience playing,” says Natasha Dow Schull, a cultural anthropologist at MIT and author of “Addiction by Design: Machine Gambling in Las Vegas.”

And it’s not just the machines that have changed. Now that gambling isn’t just relegated to Las Vegas and Atlantic City, the casino industry has shifted how people play. With the rise of residential casinos — casinos built near neighborhoods where people live — it’s no longer about winning the big jackpot. “There’s a curious turn toward [penny slots], actually — faster play at a heavier volume,” Schull says.

Advancements in data tracking also allow casinos to gather reams of information that pinpoints gamblers’ preferences and pain points. Schull says that means casinos can target specific gamblers, instead of making guesses about bigger groups of people. Schull says they “won’t have to ask this question of what’s the one number that will derive the most revenue from the population. It’s far more fine-tuned to the individual.”

While these advancements may be good news for casinos, they can spell trouble for individuals. Schull says such low-stakes slots give gamblers a false psychological boost: “You are putting in a bet and you’re getting back a portion of it almost every hand. This is a game where you put in 45 pennies, you win 30 back; you put in 30, you win five back. There can be a net loss but it feels like you’re constantly winning, and you can play for much longer.”

One person who helped the casino industry, a Ph.D. in math, told Schull he was "sure that the designs that I have out there are destroying some peoples’ lives, and we have a very addictive value proposition in our industry. What we need is more regulation, like in other countries, where there’s some kind of safety net.”

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