How casinos get you to spend more money
vox.com
vox.com
1) Choose your bet size and chance to win. The house always had a 1% edge, reflected in the payout. This edge is much lower than slot machines in Vegas.
2) Invest in the house. Every bet affected your bankroll based on your % invested relative to the total bankroll. The house edge was on your side.
The operators of the site, Deb and Doog, encouraged anyone trying to make money to invest. They argued the expected value was positive, even though high-rollers sometimes went on winning streaks.
Despite the warnings/statistics Doog produced and the fact that there was a +EV way to play (investing), players still got addicted to the dice game itself. The rolls resolved in a fraction of a second, so some players would go on a tear and bet 3-4 times a second. The minimum payout was 1% of the house bankroll, so single bets of several hundred bitcoin were possible.
Several high-rollers ("whales") played for 14-16 hours straight in a state of intense "flow", generally winning early on and losing everything by the end. Sometimes hundreds of thousands of dollars of bitcoin (1000+ btc) lost in a single session. Sometimes coins would come out of cold storage to continue playing. The site had a chatroom where even investors encouraged the player to stop before they were ruined, but the players would generally deny addiction and continue rolling.
After losing it all, some players described the experience they were having as a chemical rush- as if they had just taken a drug.
Even users who were invested and had made sizable profits from investing were not immune to the lure of the game. Several withdrew their invested bankroll just to "play around" and fell in the same inevitable fashion.
That is an insane level of product-market fit. Can you imagine if you got to claw back all of the equity you gave up at seed and Series A, because your investors wanted your product even more?
If someone needs food because he is starving and you make him a (trasnparent) proposition to, say, have sex with you in exchange for food, he is still being exploited.
You could not commit charity without also asking them to have sex with you (or work for minimum wage for you).
That's the rule of charity that I live by. But ofcourse people have different definitions of exploitation, because like 'evil' its a pretty nebulous word.
Well, you can either feed them for free, or if you DO want their work, pay them a fair compensation, even if you can get away with paying them a near-substinence BS wage.
Feeling good with yourself with paying a BS amount because "at least I gave them work and they won't starve this way" is the basis of modern exploitation.
Sure, what's "fair" might not be scientifically and mathematically derived value, but it's not like it's totally opaque either. If your company is enjoying large profits, you pay your execs top dollar for their golden parachutes, and you are paying your employess just enough to live hand-to-mouth, then increase that.
The bigger legal issue, so far, besides the gambling and the one they actually got in trouble for was for selling unregistered securities to the investors. He got a 15k USD fine for that.
1) The house edge is 1.9% rather than 1%
2) Every bet is a transaction on Bitcoin's blockchain. So the rapid-fire style betting of Just-Dice is not possible as each bet needs to be verified.
3) The investment model was through shares that paid dividends. On months the site ran at a loss, a dividend was not paid.
The anonymous Dooglus ran statistical analysis of Satoshi Dice for almost a year on the Bitcoin forums (to verify its odds were honest), then started Just-Dice as an experiment in a different investment model.
Dooglus lived in Canada and closed the site due to a new virtual currency law there several months ago. He also ran the site Doge-Dice. He left the two sites running just so investors and gamblers could withdraw all their deposits, but new deposits and bets could not be made (almost the exact opposite of what happened at MtGox when it shut down).
dopamine. We're dopamine junkies by design. Be it HN posts/karma or gambling or crystal meth ...
http://www.theguardian.com/science/2013/feb/03/dopamine-the-...
You mean "maximum" and 0.5% (after 1% was found to be too much).
"Investing" in the house was generally too slow and boring for gamblers to consider. They are used to being able to double (or lose) their stake in a fraction of a second. By being part of the bankroll they get to make a 1% return per week if they're lucky. The site ran for a year and made investors a total of just over 40% in that year.
For a gambler accustomed to making 100% (or -100%) per second, 40% per year is insignificant. To anyone else of course it's huge.
From the linked WSJ article [1]:
"The Bwin data also offer a peek at the economics of the casino industry that only insiders normally glimpse. Among the findings is an extreme reliance on revenue from a small number of gamblers.
Of the 4,222 casino customers, just 2.8%—or 119 big losers—provided half of the casino's take, and 10.7% provided 80% of the take.
Such revenue concentration long has been quietly acknowledged in the casino industry, but the Bwin information may be the first to show it with hard public data."
Compare that to the f2p industry. From Re/Code in February [2]:
"In a mobile monetization report released today, app testing firm Swrve found that in January, half of free-to-play games’ in-app purchases came from 0.15 percent of players. "
"Some game companies talk openly about the fact that they have whales, but others shy away from discussing them publicly. It costs money to develop and keep a game running, just like those fancy decorations and free drinks at a casino; whales, like gambling addicts, subsidize fun for everyone else."
[1] http://online.wsj.com/news/articles/SB1000142405270230462610...
[2] http://recode.net/2014/02/26/a-long-tail-of-whales-half-of-m...
These VIPs have their own account managers who often talk to them on a daily basis and they are given lot of gifts which are expensive (trips, luxuries etc) but nowhere near the sums they are spending.
VIP account managers in F2P is an interesting thought. I wonder if they exist.
But if it turns out there's a really small subset of people that spend a lot, too much probably, then it's quite possible that this business model relies, preys even, on people who have an addiction or similar problem.
With some exceptions, probably, like pay-per-episode games.
I'm not sure this is the paper I read originally, but it explains all this in detail (ignore the dodgy domain name): http://stoppredatorygambling.org/wp-content/uploads/2012/12/...
That used to be true but is not any longer after the regulator cracked down. It wasn't the reel design (the strips are fixed) but instead the reel position value.
So I entered this weird place in Montana, with colorful machines everywhere. A more experienced friend instructed me to play a certain machine, in which I put $5 and got 100 virtual "tokens" in exchange. Then the machine asked me to pick 7 random numbers from a 10x10 grid. I touched the 7 numbers, and pressed a flashy "Go" button. The machine "randomly" (of course I have no certainty that it was truly a random process) picked 7 numbers, and only 1 of mine matched. Total gains: 0. I repeated the process several dozen times: select your numbers, press a button, watch the machine make funky sounds as it "randomly" selects number, see if yours match. The best round I got was when 3 of mine matched, and I got back something like 10 credits, going from 47 to 57. 10 minutes later, I was at 0.
It strikes me as a tragedy of our modern society that such contraptions make for a significant portion of state income, and that they are as popular as they are. It is sad that the average American citizen does not have a sufficient grasp of basic probabilities to even consider putting money in such a machine, because it means that the school system essentially fails at preparing kids for the real world. And it is sad that governments are encouraging those temples for theft to prosper the way they do. Because it really is theft - just a kind of theft where the victim is coaxed into it with the help of smoke, mirrors, and free booze (not unlike the phone scams that prey on the elderly and manage to extract thousands of dollars from them). And not only is it institutionalized theft, it is institutionalized classist theft, as the vast majority of the victims are from the lowest socio-economical classes of society.
Las Vegas, Atlantic City, Indian reservations, cruise ships, and casino boats are the only places I can think of that allow gambling in the US.
I'm not sure if there is a loophole for horse racing tracks or how that works.
Video gaming machines might be what you what you saw but they're really not much different than an arcade that spits out tickets. I think those video gaming machines are becoming more rare / illegal.
Our brains aren't wired to correctly calculate the fact that we're more likely to lose than win.
Same with lottery tickets, people get addicted to those things and don't stop until they run out of money. Even people in Haiti would receive a little money (meant to be used for food and other essentials) and spent it on lottery tickets.
I've never heard of MGM Grand Detriot, interesting, http://en.wikipedia.org/wiki/MGM_Grand_Detroit
http://en.wikipedia.org/wiki/List_of_casinos_in_the_United_S...
I learned a new term today, Racino, had never heard that before, Racetrack/Casino.
Only 12 in PA, that's still not too many.
The interesting thing to me is that probably the same people paying for variance by gambling are also paying to remove variance via car, health, and home insurance.
You do, as it happens. In order to operate, all machines must pass fairness and randomness testing. They are also under a spot-check regime to ensure there are no post-manufacture changes or defects.
> It is sad that the average American citizen does not have a sufficient grasp of basic probabilities to even consider putting money in such a machine, because it means that the school system essentially fails at preparing kids for the real world.
You're not playing as an investment/to win, you're playing because it's fun. The probability of winning is a factor that affects the 'fun' element.
>And it is sad that governments are encouraging those temples for theft to prosper the way they do. Because it really is theft
No, it is entertainment. It's not at all theft in any way, shape or form. You may not enjoy it, and that's fine. But other people do enjoy it.
It is more than just black box testing.
Can be said for many other things too. Including things that are outright illegal, heinous and criminal. Slippery slope and all that.
Many of the machines actually aren't random. Rather, large batches of results are (semi)randomly chosen such that there's a particular distribution of results in the next several thousand (or a million) results.
Also, I assume it must require a lot of trade show visits to try and sell major casinos on your machine, since the number of customers for your machines is severely limited. Is it an upfront cost business (aka, they pay you $XXX for each machine) or is it more of a partnership with the makers where the casinos share profits on the machines with the developer/designers? Off the top of my head, I'd think the latter would be more feasible as I'm sure popularity of machines must be somewhat short lived, as there always seems to be different machines all the time.
Anyway, I'm curious if anyone with more experience in this area could give some brief highlights on what it's like working in that arena. I've always been curious :)
From an engineering perspective slot machine design isn't very hard at all. It's pretty much video game design. There's a relatively recent CPU putting down images, playing back video, doing some light/sound choreography, and maybe doing some mechanical motion on some games. Let's put it as slightly more complex than Candy Crush but way less complex than writing Halo. There's also a mechanical component with artists and designers making cabinets, art glass, and wacky add-ons that sit on top or around the machine.
The hard work in slot machine design is in the math of the slot machine. You're trying to design a game that balances something interesting on-screen with enough volatility that keeps players hooked. If you decimate their bank in the first 100 spins that player will never come back. One typical way to manipulate this is through the secondary games or bonus games that pop up on certain reel combinations. At first this was a way to work around certain patents (the most famous being IGT's Telnaes patent) and now players just come to expect various levels of extra action when certain slot reels are hit. Every player likes something different, of course. IGT's Double Diamonds reel-spinning slot is over 25 years old and players still look for it.
The math also has to jive with the gaming board. Certain states will mandate minimum payout percentages, or a mixture of these that average a certain payout. (This is why dollar slots in Vegas pay way better than penny slots. As long as all the action in the casino averages to the legal minimum, they're okay). Your typical slot manufacturer has a number of math/stat MS or PhDs working out the numbers on paper as well as a testing department that tries to verify the math empirically. I'll say "tries" because some designs are so complex and non-deterministic or dependent on player choice that it can't be verified entirely on paper anymore. Almost all American jurisdictions employ independent gaming labs that inspect the code and verify the math as well before the slot is approved to release in a given state. If you can get approved in Nevada, you're usually good everywhere as a rule of thumb.
And then yes, the theme of the slot has also become incredibly important. Licensing pop culture items (movies, TV shows, dead musicians, celebrities, etc etc etc) is a constant fight between the manufacturers to capture and leverage into a usable slot idea. Some think it is creatively lazy to grab the next hot movie and turn it into a slot. Some think that's what you need to do to attract people's attention in a visually crammed environment. C'est la vie.
A slot machine designer worth his salt can mix and meld all of these things into an interesting game. New and different game mechanics are hard to come by, though. When something does hit, you'll see that model replicated dozens of times with slightly different math or new themes slapped on top of it. You throw a lot of shit at the wall to see what sticks.
Business wise, up until a few decades ago, slots were sold by manufacturers and entirely owned by the casinos. In the last 20 years or so this has transitioned into a participation relationship where the manufacturers own, maintain, and operate the games themselves and share a percentage of the handle with the casino. This has made the business a lot more cutthroat because a streak of lousy games can get you kicked off a property (or corporation) entirely. This is the downside of throwing shit at the wall, so you test and test continuously at smaller properties. Participation also allows interesting game mechanics like multi-casino slots (like Megabucks) where the manufacturer is holding the jackpot in an interest-bearing account in their reserves. Think about that when the jackpot is in 9 figures and nobody has hit it for a year.
Anyway, if you're really interested, the big companies are always hiring. These days it's IGT in Reno, NV and WMS in Chicago, IL. There are smaller companies here and there (Konami, Aristocrat, Mikohn) and then a constellation of independent design groups that consult and design games on spec for the big dogs. Most designers work their way up from programming games or designing art for slots but if you have any video game or casual game experience there's always room for new talent.
It's the only slot I'll play because it has the best pay table in the casino. It's the only one that pays 1600 coins for a 2 coin bet with sufficient payouts otherwise.
The payout-distribution could be different, maybe that's what you like about it ?
(anecdotal: I calculated the expected value for a few games on a gambling site a few years ago and they were all about the same, for every game, for every size of bet: expected value was around .96 dollar for every 1$ bet. YMMV.)
There's a voodoo science around how casinos are laid out and how games are arranged to maximize cashflow. You can get a degree in this at UNLV.
Just for a fun story: One of the most famous game mechanic patents belongs to Ernie Moody, the guy that designed Triple Play Poker. Moody designed the game on his own, patented it, then licensed it to IGT who built it into a immensely successful line of video poker machines.
At the time the whole idea of licensing an outside game mechanic was relatively new, so Moody asked for and was given a sizable percentage of the handle for this game. This was the difference between Tom Cruise asking for a % of the box office instead of a flat actor's fee, but nobody realized it at the time.
It has been told that at the height of Triple Play's popularity, Moody was taking in $500,000 per day in royalties. He's easily one of the weathiest game designers in history, if not #1, and very few have ever heard of him.
And that's just Nevada. You have to be licensed in each individual jurisdiction where your games will be shipped. This, of course, is all before you even broach the subject of putting your game on casino floors with slot/table game managers.
As far as revenue models, both of those you mentioned are used. This also goes back to licensing - if you are only licensed as a manufacturer (a slightly less onerous process) then you cannot get a percentage of profits. You must have an operating license to obtain a percentage. This is why many table game manufacturers (3 Card Poker etc) get a flat fee per table per day instead of a percentage. The machine market is dominated by IGT and WMS, and good luck penetrating it. You may, however, be able to develop a fun game and license it to one of the big slot firms. Probably the easiest way.
the pretty UI is not worth the horrid UX
EDIT: i think repliers are focusing too much on scrollbar visibility. this isnt the main issue. i have no problem with the scrollbar being visible on other sites. it's plenty visible on my Win 8.1 / Firefox 1080p res. The problem is that A) i dont want to scroll an entire page before i begin reading and B) i dont want it to be the primary (and sole) indicator of additional content. I have to look over to the side to get the only cue, it's really annoying.
/rant.
I'd prefer the traditional style article and thumbnails where necessary (not just for the sake of cramming images into articles).
Maybe they've done testing and this style article gets read/shared more, it certainly looks more official and permanent but it's still just a blog post / news article.
This is where I first saw it, and it's annoying to read the huge text and adjust to the images that float under text: https://medium.com/war-is-boring/that-time-an-air-force-f-16... Apparently they never even considered what it would look like when someone tries to print that article, the 1st half of the page is a solid black image, then the text is laughably large.
It's a decent article and fairly interesting (though not surprising), but the layout is like navigating a minefield, it's still better than the multi-page layouts that are common on some sites. Try to print this article though, 17 pages. 17 pages.
Their main business is offering content in a format that is readable and accessible to users. One solution would be to have an alternate layout with normal sized text, no giant header image, and thumbnails rather than half-page images, and that layout preference would be both saved in a cookie and settable via a URL parameter.
That's the real problem. It's become very trendy to have nearly-invisible, or even actually-invisible scrollbars. This is a horrible loss of UI and I have never understood it.
Er, I usually notice the text. When I first started seeing some of these, I remember thinking some of them had failed to load when I couldn't scroll, so I guess I don't always notice the text.
[1] http://online.wsj.com/news/articles/SB1000142405270230462610...
http://en.wikipedia.org/wiki/Fixed_odds_betting_terminal
http://bbc.co.uk/news/uk-politics-25619683
http://bbc.co.uk/news/magazine-22934305
http://m.bbc.co.uk/news/uk-scotland-glasgow-west-27926213
Glasgow has a population of about 600,000 people. Gamblers are not travelling to Glasgow - gambling is legal in Scotland so these machines are available in most towns. £200m is $336m
Yeah, right... technically legal but that sounds totally rigged to me.
E.g. in Finland all supermarkets and roadside cafes have slot machines, and complex betting tactics described in the article have been there at least from the 1990s. They do differ a bit from Vegas slots, as the profits go to charity and the jackpots are ~50€, but still they are carefully designed to maximise the profits on the long run.
Those machines are really designed to salami slice players. You can play many of those machines from a penny per line, which equates to about 15 to 30 cents per play for full lines, depending on a machine. There are people who play at higher stakes, like a max bet of $2 per play, or even $5, but observing people, majority seems to be played at much lower bet of a penny or two per line, so I'm guessing they consists of high fraction of profit a casino is making from.
It's fairly easy to lose a sense of spending when you are doing literally a thousand play per hour. (At 30 cents per play, You'd be spending fairly long time to spend $20, or even $10. At this level, a typical win would get you around $2 to $5, maybe $40 if you are quite lucky -- and perhaps real jackpot, being very, very rare, $200 or so.) Those "wins" really give you the joy that you'd anticipate for the next, and a lot of time, they'd put more money in just to anticipate another win, because when they have lost plenty of money, it's about a time they will start winning, right?
Knowing someone who really got into it, one sign I started seeing from them is that they'd start making a statement like "I'm not playing it for money, I play it because the game is fun." He would play the game literally for hours per session, often visiting there multiple times a week. Usually ends up losing -- maybe the only good thing is that he'd have accumulated quite a bit of free restaurant credits.
So if you are inclined to play, here's some suggestions, though for those people who would feel these suggestions are useful probably find the best is not to play at all:
1) Set a budget -- don't bring extra money. (And don't bring ATM card/credit card if you feel like you can't resist getting extra money out of them...)
2) Record every win/lose -- I've had Google Doc that keeps track of every wins/lose every machine. Every time I cash in, I'd record, every time I cash out, I also record that, that would give me balance sheet how much I'm spending/making.
3) Bet generously -- Don't bet a penny per line, go higher. You won't go anywhere with such low bet anyways. You'll have a better chance getting a better outcome going through that $20 in 2 minutes than spending 2 hours on it. Yeah, it may only last 2 minutes, but then you have good reason (See #1) to leave at that point -- and you are giving less chance for a machine to alter your psychology.
Once I had a big win (for me) in Vegas playing craps. I walked away with like $2000, and each of my friends did (to varying degrees) as well.
So, what did we do? We lost it all back over the rest of our vacation. However, that big win did something chemical in my brain. I remember it very well and think back fondly of it. But I don't even remember how I lost it all back. The win is still salient and the losses forgotten.
I don't regret it because I had a great time, but all of your tips apply. 1 & 2) It's easy to remember your wins and forget your losses, so budget and keep track. 3) Go in big, because the more you roll the dice, the more likely it is you'll revert to the mean.
I'd add one: 4) don't use the machines and learn one of the table games. The odds are better and it's a social interaction, rather than an expensive video game.
See http://wizardofodds.com/games/video-poker/ for details of the expected % return from these games. You'll still likely lose money, but it will last a lot longer :)
Once you're comfortable with the game, find a table that has a low minimum bet and a high max odds multiplier.
The problem of max bet is that they tend to have very high value for max bet, and (especially for casual players) it can be pretty intimidating and even unrealistic depending on initial budget.