Reprinted with permission by Billhere and Steve Bourie.

VIVA LAS VEGAS

LAS VEGAS, July 12,2000-----In this newsletter we will report on:

THE SLOT MANAGER

by Guest Columnist Steve Bourie

The average U.S. casino makes about 65% of its profits off its various slot machines. Although the technology constantly changes, one thing remains the same: the person responsible for the operation of the slot department is the slot manager. It is the slot manager who determines how the slot department will be laid out and how much the machines will be set to pay back.

You've probably had a few questions about how a slot department works. Well, the person with the answers to those questions would be the slot manager and I found one who was gracious enough to sit down for an interview to answer some questions about how their departments work and what goes into some of their business decisions.

Rich Marino is Director of Slot Operations, at the Luxor, the giant pyramid-shaped casino-resort in Las Vegas. Luxor is owned by Mandalay Resort Group, one of the largest gaming companies in the world and the hotel itself, with more than 4,400 rooms, is the world's third largest hotel.

Rich began his career working downtown at the Union Plaza in 1976 in the coin room pulling the buckets under the machines. He eventually became the shift manager and a few years later he moved to the Gold Strike which later merged with Circus Circus. After a one-year stint at the Elgin Riverboat in Illinois, Rich returned to Las Vegas to help open the Luxor casino and he's been there ever since.

Rich has more than 200 employees working for him in his slot department, including: change people, floor people, money runners, booth cashiers, supervisors, assistant shift managers and managers.

Here is the interview:

Bourie: What goes into your decisions when you lay out the slot floor and are deciding where to put slot machines?

Marino: Traffic flow is the most important consideration when laying out a slot floor. Placing lower denomination machines in high traffic flow areas to insure that the property always looks busy. Also, I place the more popular machines in slower areas to draw people to those locations. I look for what types of machines people are playing and I also run reports continually: which locations are doing best, my top 10 machines, my types of machines, etc.

Bourie: How about your decisions concerning the physical layout and where you want to place the machines?

Marino: What I try to do initially is create excitement by the front entrance of the casino so when a customer walks in they see people playing and having fun. I put popular nickel games up front because it seems the nickel games always fill up first. (Pulls out floor plan of the casino and points to various locations). As you can see I've located a couple of nickel banks up front and some Wheel of Fortune games next to them.

I try to draw the customers in and create a good flow through the casino. This is the entrance (pointing to a different area of the layout) from the Excalibur when you come over from the moving walkway that links the two properties. Here, I try to create the same scenario by putting Wheel of Fortunes on this wall and the Williams games adjacent to them. And, like I said, I try to create excitement in each area and I do that with the types of machines or denominations. The nickel games kind of shield the front areas and we also put them in the back areas because customers are going to find them there. They're going to find them no matter where you put them because they like playing nickel machines.

The reality is that the casino has the edge. You know that and I know that and everybody knows that, but what you've got to do is let people have as much fun as they can, so that even if they don't win, they're still having fun. It's an entertainment experience. If you're sitting there and take out a $20 bill, and you're playing and that $20 bill is gone and you don't hit anything, you've got a negative experience.

Bourie: I'd like to address some common beliefs that players have about slot machines and here's the first one: "the casino can flip a switch to make the machines hold more." Or, "the machines are set tighter on the weekends." I've actually heard people say "there's a big convention coming in this week and they're going to reset all the slots to make them tighter." Any truth to those kinds of thoughts?

Marino: There is no magic switch. The only time we change a machine is when we convert it to a newer or more popular model. And, of course, when you get a new model, then you would change the e-prom (the computer chip that controls the payback percentage) to that new model. The manufacturer initially sets all the percentages for the machines when ordered. I determine the hold percentages I want by the denomination of the machine. The hold percentage averages for the Las Vegas Strip are 11% for nickels, 6.5% for Quarters, 4.5% for dollars, and 3.5% for five dollars and above.

Also, gaming-wise to do that, it's not just going in and changing a chip. You have to go in and you actually have to take all of the money out of the machine. It's got to be returned to the cashier's cage, that money has to be counted and you have to assign a new number to that machine because that's a new machine once you change the e-prom. So, gaming regulations require you to change the statistics on the whole new machine. It's a whole day process to do that. It's not just to go in and change the chip and leave and say ? "Okay, I've tightened them up for the weekend."

Bourie: Another thing many players believe is that "the best paying machines are on the aisles."

Marino: Not true. That's a perception people have because most of them like to play machines on the aisle. They'll walk up and play the machines on the end because they don't want to play with somebody next to them. That's why they appear to be looser to the customers because they get more play and more action and more people are playing them and they cycle more. And, they get into those better cycles more often.

If you've got a person playing here, another one here, and another here, you're not going to go right next to those people. You're going to go to the end so there's nobody next to you. That's why we've gone to these round configurations.

People don't like sitting next to each other. So, we're going more and more to the round ones because people really like that a lot and these games do a lot better than the normal straight rows of slot machines.

But as far as the tighter and the looser machines, I set them up by model types. I mean, if I have a bank of quarter machines, I'll have a Double Diamond; a Red, White and Blue; and my percentages on those quarter machines are all the same. So, it doesn't matter which machine I put where.

Bourie: Then you wouldn't have a situation where a high-paying machine would be sitting next to a low-paying machine?

Marino: No. If the machines were the same denomination on a particular bank the hold percentages would be virtually the same. In my dollar machines I order everything at between 4% and 5%. So, you're talking the difference between one percentage point and that's only because certain models are only available at certain percentages. I mean, I would never put an 8% dollar machine next to one at 4%. I don't do that here. Some places might do that, I don't know. I try to give everybody an equal shot no matter what.

Bourie: Which brings us to the next question, "Do machines get 'hot' and pay out more frequently?"

Marino: Sure they get hot, they also get cold. Through the cycle of a machine it's percentaged to pay out a certain amount over a period of time based on the number of handle pulls the machine receives. However, the hot and cold cycles are random and indeterminable.

Bourie: When you order a slot machine do you have to tell the manufacturer what you want it to pay?

Marino: Yes.

Bourie: And, each manufacturer tells you the pre-approved percentages you can choose from?

Marino: That's correct. (goes to shelf, pulls down a book and opens it to a page). This book contains all the available hold percentages for these particular models and the denomination of a machine is what determines the hold percentage I would order for it.

This is what I order:

Quarter machines at 92.4% which would be right around 7.5% hold for the house. If it's dollars, I order this one (around 95%) and for twenty-five dollars (around 97%) or hundred dollars (around 98%). It goes up, like that. If it's nickels, you start down here (around 89%). That's the way it works.

Now, over a period of time, this quarter machine is going to pay back 92.4% and it's going to hold around 7.6% for the house. And when I say over a period of time, that means over 10 million handle pulls.

Bourie: 10 million handle pulls is the life cycle? On every machine?

Marino: 10 million is the number of handle pulls the manufacturer has determined it would take a particular machine to achieve that 7.5% hold calculation. Getting to that number though, may take a year. That means in January, that machine might be hot, or today it may be hot. So, I may be holding...it's a volatility index they call it...for the first two months of the cycle when that machine goes out on the floor, I may be in the negative. I may be paying out 400% or 500% on that game. But, the next month it may be tighter and at the end of that cycle, it's going to hold 7.5%.

Bourie: So, you always have a variable there?

Marino: Right. There's a variance there. We do a comparison at the end of each month of winners and losers. Then we look at the coin in and we see how long they've been on the floor. Most of the time, I'll look at a year-to-date number, or a lifetime number on the machine to see where they are actually at.

Bourie: Will this tell you how many actual pulls were made on that machine?

Marino: Sure. You just divide, or you go to the machine itself and you could see exactly how many handle pulls. Normally, you just divide it by the number of coins in and you could tell the handle pulls. That's basically what we do, but we don't tighten them up, or loosen them up. Once they're out there, they're out there. The only time we do conversions is when we see a model not getting enough play. Then we say it's not popular and we try something else. What you would then do is take your bottom 20% of your machines and convert those to more popular models.

But to go back to what you were asking before, the hot and the cold factor? That's definitely true. The machine can be hot today and colder than anything tomorrow. It will pay out 400% today to you and tomorrow it might take 400% from somebody else.

Bourie: Okay, but there's no way to tell if it's going to stay hot, is there? It reminds me of when I talk to people about playing craps. They all say ?"just find a 'hot' crap game." I say, "fine, you may find a 'hot' crap game, but all you know is what happened in the past. You don't know what's going to happen in the future."

Marino: Sure, It's the same as a "hot" slot machine, you just don't know what the next pull will bring.

Bourie: Right. But people say, "well, if it's a 'hot' machine, it's going to keep paying out." People are under the assumption that it's going to keep paying out, and I tell them "no, it's purely luck."

Marino: You're right. They don't pay out forever. All it is, is luck. Being in the right place at the right time.

Bourie: How about this one: "don't play a machine that just hit a jackpot?"

Marino: Well, it doesn't matter.

Bourie: One last question. Do you have any suggestions for players?

Marino: The only suggestion I have is to just play the machine that you enjoy the most and that you have a good time at. I mean...I play a little bit. I go out with my wife and she'll play video poker machines. I'll play video poker with her, but I just play the machines that I enjoy playing. I'll play machines that I see paying back the most to the customer (by looking at the pay table). Those are the ones I'll look for, and locals also do that.

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About the Author:

Steve Bourie is author of the book "American Casino Guide" which has over 445  pages. Half the book has excellent articles about all aspects of gambling and the other half has excellent information on every U.S. casino. This comprehensive  book is a "billhere" must read. It's now available to the readers of this Newsletter  as item (468) in the Viva Las Vegas coupons-lists index, which is on the internet  at: http://www.billhere.com/coupons-lists.htm

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