Psychology, Design and Economics of Slot-Machines

6 writes "Technology isn't just about design and hardware; sometimes it's about psychology, politics, sociology, and economics. The website of Stanford design prof Michael Shanks is hosting a student project by William Choi and Antoine Sindhu, a fascinating online course about slot machines. From the site: 'Much research has been devoted to studying gambling behavior from various points of view, including the psychological, social, economic, and political bases and implications of gambling ... [just the same,] focusing on slot machines reveals and inspires the study of many sociological issues that have come to express themselves specifically and notably on these machines. Here, we examine a number of these issues, attempting to link slot machines to them in an effort to better understand and explain them.'"

Comments

Oh, it's a student project

[Animats]

It's a student project, and it shows. The article is superficial. The first two sources listed are Wikipedia and HowStuffWorks. There's a page on the Simpsons. You get the general idea.

Considerable work has been done on gambling psychology, but they didn't find it. There's an online Journal of Gambling Issues, with papers like Slot machine structural characteristics: Distorted player views of payback percentages. There's an annual trade show, Global Gaming Expo, and even an institute of higher learning devoted to the subject, the International Gaming Institute, part of (inevitably) the University of Las Vegas.

Their "experimental work" consisted of playing "freeslots.com". They didn't even notice that the "free slots" programs are set to have an expectation greater than zero when played in free mode. In fact, it's quite difficult to lose at "freeslots".

Industry analysis of player psychology has gone way beyond the stuff mentioned in this student paper. The big breakthrough was when slot machines started accepting player affinity cards. Today's casinos have the player's entire history, at the per-click level, on file, and considerable effort goes into mining that data. Some studies have compared what players have thought they won versus the casino's history of their track record. Many players don't even know that they're losing, let alone how much.

If you want to read about this subject, start with Super Casino, an 1999 inside look at some major Las Vegas properties.

Re:Oh, it's a student project

[stonecypher]

The idea that casinos operate under "minimal government regulation" is so ridiculous as to be completely laughable.

No, it isn't. You should see the regulations other companies have for gambling machines - they specify the entire payout structures, the hit likelihoods, the amount of noise the machines are amount to make, the volume of brightness allowed to be put out in lumens, all sorts of stuff. All the American gaming services do is require regular random testing of the machines, honest posting of stats, no rigged machines, and a cap on expected draw. America has about the most open and liberal market possible while still intending to verify the honesty of a proprietor.

Just because it's hard to regulate gambling honesty doesn't mean that we're doing a particularly overbearing job of it. In general, it's not appropriate even as a professional to suggest that one country's regulations are or are not strict until you have experience with the regulations of other countries (as usual, Canada doesn't count.)

Casino gambling is one of the most highly regulated industries in our nation.

Nonsense. Again you are confusing your lack of personal experience with something more strict with that there is nothing more strict. Neighborhood banks go through regulations that make casinos look positively lax. The local UPS hub has an on-site police force (and no, your 20-dude goon squad in casino floor 3 isn't a police force, I mean an actual went to the real police acadamy people with badges that mean something in court type police force;) that's there for a reason. Your local airport guys are rolling their eyes right now. Any place that sells chemical fertilizer (not dirt) is pretty pissed at you right now. A gas station goes through more verifications per-machine than a casino does, though given how many more machines a casino has than a gas station, the validity of that point is ... curious.

Then you get down to places with real security - prisons, power plants, dams, stock exchanges, CDC Level 3+ quarantine sites (there's at least one in almost every major city and one at most strong medical schools,) ports of call, military bases, missile silos - you say gambling's securer than those places around the people who keep them secure, you're likely to get a punch in the mouth.

'Course, if by "regulated" you meant investigated by the government, well, then you obviously have no experience in finance, transportation, the fuel sector, alcohol, tobacco, pornography, television decency, abortion, cosmetic surgery, car sales or cell phone region mapping. Indeed, if you take a good solid look at it, casino regulation is pretty much on par with other industries making that amount of money. You want something better regulated, you move up the dollar chain, you get religious ethics involved or you make a genuine stab at the public health.

Frankly, prostitution is a better regulated Nevada state industry than gambling is; that's why they can spot disease trends across small brothels but not theft trends across major casinos on the same street. You seem to think that any enforcement in a casino is government enforcement. The vast bulk of it isn't. No government agency says that a casino has to look for cheaters. They're doing that themselves because it's in their financial best interest. Gambling regulation is just a set of rules saying how far they're allowed to set the statistics, how long they're allowed to milk a given customer, and a lot of random sampling to make sure people are telling the truth.

You want real regulation, you look at the drug war. That's regulation that works better than casino regulation, and everybody being regulated is fighting it as hard as they can, unlike casinos, who cooperate quite openly.

Re:This article is not based on facts.

[Graff]

In fact, intentionally displaying "near misses" is illegal in pretty much every single gaming jurisdiction. Actually there is a very easy way of legally doing this. You set up the wheels so that certain wheels have more of some symbols than others.

Suppose there are 3 wheels and 3 symbols - a, b, and c. The wheels have the symbols in the following amounts:
wheel 1: a a b c c
wheel 2: a a b b c
wheel 3: a b b c c

In other words, two wheels have two copies of symbol "a" and one wheel has one copy of symbol "a". The same goes for the other symbols.

You now have a much greater chance of getting 2 of any symbol than you do of getting all 3. This is just a simple example, there are many more ways of setting up the wheels so that you get a large amount of "near misses" and are goaded into playing the machine more. It's not illegal to set up the wheels in this manner, what is illegal is pre-deciding the result of a random spin of the wheels. This kind of setup is just obfuscating the chances of getting a certain layout of symbols.