Slot machines in Chicago-area casinos — which have embraced nickel-and-dime betting — have grown stingier the past four years, records show.
The tougher odds have helped offset competition from rival casinos, increased gaming taxes in Illinois, and a bad economy that deters some recreational gamblers.
According to reports from gaming regulators in Illinois and Indiana, the odds on electronic gaming devices — slot and video poker machines — in eight area casinos have been steadily moving in favor of the house since 1999.
Under state law, Illinois casinos must return an average of at least $80 of every $100 wagered at the machines. But government-regulated casinos across the nation have always set their slots to give back much more than that.
“People know they’re going to lose — they’re not stupid,” said Stowe Shoemaker, a professor of hotel management at the University of Nevada-Las Vegas. “They just don’t want to walk in and lose all their money in five minutes.”
In 1999, the top four casinos in Illinois — Elgin, two in Joliet, and Aurora — had an average slot machine “hold” of 5.69 percent: They kept an average of $5.69 from every $100 wagered at the machines. Through the first nine months of this year, those same casinos are keeping an average of $6.61.
The increase may look small, but fractions of a percent add up to tens of millions of dollars.
Last year, nearly $16 billion was pumped into Togel Singapore slot machines and video poker machines at casinos in Joliet, Aurora and Elgin. Another $8.7 billion went into machines at the four northwest Indiana casinos clustered near the Illinois border.
At Harrah’s Joliet last year alone, a total of $3.7 billion went into the casino’s slot and video poker machines. About the same amount of money went in the year before, too.
But by increasing their overall slot odds by one-half of a percentage point, Harrah’s was able to keep $22 million more from the machines in 2001 than it did in 2000. That boost represented the total revenue increase for the entire Joliet casino operations for that year.
Gamblers’ losses on the rise
Statewide in Illinois, total casino admissions have declined since 1998. But gross revenue has climbed during the same period.
In the past five years, the average amount each gambler lost during a single visit to an Illinois casino has more than doubled from $40 in 1997 to nearly $100 last year. That increase was most noticeable in the first few months of 2000, when new legislation meant Illinois gamblers no longer had to wait for specific “boarding times” to enter the casino. Gamblers have since been able to get on whenever they want, 24 hours a day.
The gradual increases in the slot machine holds continued through the past summer when lawmakers imposed a new — much higher — tax on Illinois’ most successful casinos. But Tom Swoik, executive director of the Springfield-based Illinois Casino Gaming Association, said that’s an unrelated issue.
“To my knowledge, no one has increased their holds because of the tax,” Swoik said. “That would be counter-productive.”
Swoik attributed the overall increase in odds at the casinos as a reflection of the casinos reacting to “consumer demand” for more lower-denomination slot machines. Those machines traditionally have much tighter odds, pushing up the overall average.
Since 1995, the total number of table games, like blackjack, has decreased from 472 to 291 statewide. The number of electronic devices during that same time increased from 7,742 to 9,540.
There were only 600 nickel slots on all Illinois boats in 1999. Last month, there were 2,286 statewide. There has been a similar increase in the number of the nickel machines in Indiana. And the two casinos in Gary even offer 2-cent machines.
Lower risks, bigger losses
Because they carry less risk and take longer to separate money from the gambler planted in front of them, the low-denomination slots are programmed to take their toll.
For every $100 put into nickel or dime slots at Illinois casinos, the average gambler will lose about $12 — twice as much than they would sitting in front of a $1 or $5 machine. Gamblers on the 2-cent machines at the Majestic Star casino last month lost nearly three times as much, according to the Indiana Gaming Commission.
While it could take hours to feed $100 worth of nickels one-by-one into a machine, many of the nickel slots now allow players to play multiple nickels on multiple lines during one play.
That means dozens of nickels — as many as $4.50 worth — can be wagered on a single pull of the handle. But, over the long haul, the nickel machines retain their stingy odds no matter how many are deposited.
Shoemaker said the hold percentages are simply the casino’s way of covering overhead costs.
“All businesses have ‘hold percentages’ — we just don’t call them that,” he said. “Imagine if restaurants had to list their markup right there on the menu,” he said.
The hold percentages can only go so high. If the casino takes too much, people will see their money disappear faster and stop coming.
Giving gamblers what they want?
In addition to having the highest gambling tax in the nation, Illinois also limits each of its casinos to 1,200 gaming positions.
“They have to pick and choose what they will put out there,” UNLV professor Hal Rothman said. “And they do that by watching to see who’s doing what.”
While visitors to Las Vegas may be willing to lose several hundred dollars in a single sitting, visitors to riverboat casinos near their homes may prefer to lose that money over the course of a dozen trips.
Casino regulars — “economic losers,” in Rothman’s words, who don’t have a lot of money in their pockets to start — often enjoy what appears to be low-risk gambling that allows them to be part of the noisy activity around them for hours on end.
“And as a result, nickel machines would be more attractive in such markets,” Rothman said.
Local-market casinos across the country, the experts say, are simply giving gamblers what they want for a price.
“It really comes down to the willingness and ability of players to play at the higher prices,” University of Nevada-Reno economics professor Bill Eadington said. “You have to give players enough respect to allow them to choose how much they are spending at any activity, including gambling.”
