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Hold On!

Hold On!

It’s always been an issue when casino executives consider raising the hold percentage of their slot machines. The fear is that they’ll lose players who will migrate to another casino where the hold percentage isn’t so high. But can players tell the difference? Two professors from the University of Nevada, Las Vegas, Anthony Lucas and A.K. Singh, recently conducted a study called “The House Edge and Play Time: Do Industry Heuristics Fairly Describe This Relationship?” aimed at determining whether a higher house advantage (identified as “par” in the study) results in higher or lower revenue compared to a lower house edge. Based on modified versions of licensed pay tables from reel slot machines, simulations of play failed to indicate a statistically significant difference in the spins per losing player (SPLP), despite a marked difference in the pars (i.e., 7.9 percent versus 12.9 percent). In other words, within the “100 years of play” simulated for the study, the higher house edge generated a statistically similar number of spins. To reflect a volume of play consistent with frequent gambling, the simulations included results from one to four visits per week, for the equivalent of one year. The level of play was applied to multiple scenarios of buy-in amounts and stoppage-of-play criteria. Most outcomes indicated a negligible decline in SPLP, in spite of the 63 percent increase in the par, or house edge. These results were reproduced from a second pairing of games featuring a 117 percent increase in par (i.e., 4.6 percent versus 10 percent). The outcomes suggested that operators may be overly mindful of the fallout from increased pars. The authors of the study conclude that casinos may be leaving money on the table by failing to raise the par. To download a copy of the study, visit unlv.edu/news/article/ are-casinos-making-right-bet-when-it-comes-slots.

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