Wednesday, July 16, 2008

Statistics lesson for the day

It’s been a quiet week in Spring Valley, my home town. Yes, I know the title says Vegas, but when I drive home the sign up on Desert Inn I drive past says ‘Welcome to the township of Spring Valley’, and when I drive in to work in the morning the sign I go past on Spring Mountain Boulevard says ‘Welcome to Paradise’. So there, I work in Paradise, a sign says so, and if you can’t believe in a sign put up by the government, what can you believe in?

The city limits of Last Vegas end up at Sahara Boulevard, if you’ve been out here then the tower of the Stratosphere is the last casino in city limits, the Sahara Casino is across the street, and not in the city but in Clark County. Most of the Strip casinos are in the township of Paradise, including the airport, so if you’ve been here and thought you’ve been to Vegas you’ve actually been to Paradise. Unless you went downtown to see the old casinos, then you have been to Vegas.

Anyway, back to it being a quiet week, well, it has been. We are into our July temperatures, a little warm for the beginning of the month, but it’s due to hit 113f (45c) this afternoon, so a lot of people are just saying home in the air conditioner. There are no big conventions scheduled for this month, with none at all last week, so at work it has been very quiet, though I have been hit with this emergency call to get up a site for the big boss very quickly (OK, then why am I taking the time to write this? Get back to work Joe).

There is a conflict in tourism here, in that the summer is about the worst time to come, as our temperatures are rather unbearable and usually the weather back at home is pretty good, but it is when kids are out of school and traditionally people take vacations. My suggestion, best time to come is any time. It is cool in the winter, but the sun is still just as bright and you can lay in a quiet area by a cold pool and still get a nice tan, walk the streets without dying and not have huge crowds. But come. So people are here, walking the streets and getting sunburns (previous post on that topic); bring and use sunscreen.

Tourism is down, what with gas in California over five bucks a gallon, and fewer people are driving up; we usually get 35,000 or so driving here from LA each weekend for a quick trip. Casino revenues are down as a result, and there are some layoffs, with the unemployment rate getting up there. Station Casinos is opening a new resort in North Las Vegas soon, with 1,000 job openings they are expecting 100,000 applicants. The Wynn next door is opening a new tower, and behind our facility and their Team Member parking garage they constructed a whole facility just as an employment office.

It’s composed of about thirty single wide trailers all put together, with a second building made of a half dozen more marked for Uniforms. All of the trees are in pots, and there are a lot more now, so it looks like a small forest out there in a sea of flat asphalt. In the background are the two Wynn towers, from right to left in the picture it’s the newer one to the right (called Encore), then the old one (well, what, two years old?) then the Trump tower in the distance and on the left it’s the new Palazzo tower at the Venetian. This site of the employment center used to be blocks and blocks of apartments. Wynn now owns five of the sections and the Sands owns one, in the middle surrounded by a U of Wynn property. The Sands property is right behind the trailers and palm trees, construction is supposed to start soon on a new two million square foot Sands convention center here, three levels of underground parking and three levels up of convention space, so there will be a new block in this picture next year, but not as pretty or as tall as the hotel towers.

Some information in a recent local newspaper article about the new Station Casino facility discussed slot revenues. It seems that there has been an increase in penny slot machines on the strip. In 2000 there were only 710, but now there are 32,234 of them. Yes, you can do a penny a pull, but all of these are following a trend of the electronic slot machines. The electronic machines have a screen with what used to be images of the rollers found on old mechanical machines. What you see are three horizontal rows of small pictures, with from three to seven vertical rows, with most machines now having five vertical rows.

What gets most people is that you can also bet on multiple ‘lines’ for multiple coins. On mechanical slot machines there used to be three rollers with pictures on them, and when the same three pictures lined up across the front you won something. Now with the glory of computerized electronic machines you are not limited to the mechanics of calculating a win, you are given a variety of ways to line up the little pictures. This machine is typical of the multiple ways to bet.

Each colored line indicates the combination of five pictures that can create a winning sequence. There are nine ‘lines’ that you can bet on. And most machines allow you to bet multiple coins per line. All machines offer a ‘grand’ mega- prize for getting a rare combination of pictures. But if you read the fine print you can only get the big prize if you bet the maximum number of coins on the maximum number of lines. So on a penny machine like this one that would be ten pennies on each of nine lines for a bet of $ .90, so if you just push the Max Bet button you are spending what you would spend on 90 pushes of the minimum bet button.

There is a group of big Wheel of Fortune machines next door that take nickel bets. I say bets because most electronic machines do not take coins in, but either paper money or printed slips, and they don’t pay out in coins but in the same printed slips, which you then carry over to a ready teller machine, feed in, and are returned cash out. Unless you win big, then you have to go over to the cage and trade it in for and IRS income tax form and a check, with 35% tax withheld. (yes, the government has their hands in it). I think the withholding comes in play when you win more than $1500. It’s up to you to tell the IRS how much you spent to get that when you fill out your tax return for next year. Anyway, the WOF machines are hooked together in a network with other machines all over the world, leading to a really big grand prize. This one is up to over $ 5,400,000. We walk past it on our lunchtime rambles, and it seems to go up by about $20,000 per day. It started at $1,000,000 months ago, so you can see how often there is a winner. To get that prize again it takes max bet on max lines, which means each time you push the button (no more arms to pull on slot machines any more, all buttons) it will cost you $ 4.50.

So penny and nickel machines don’t usually take singe coin betters. When we used to visit Vegas my wife would make $20 last in a penny machine for hours, getting free drinks and most of her money back when we left. But that was downtown, and she was only betting a penny on each pull. The odds always seemed to be a little better downtown than out here on the Strip.

The newspaper article also discussed the pay back percentages. Those are the overall percentages of money that you would get back over a huge average number of bets. Most people (except you D) just leave their money in the machine and keep going until it’s all gone. Back in 1997 the average slot payoff was 95% (excluding video poker, in which a little skill is involved). In 2007 that fell to 93.9%. That’s for machines over all, for penny machines alone the odds were a little lower, with the average 89.9% payback, while dollar machines paid back an average of 94.5%. So if you are going to only bet a penny, then go ahead and amuse yourself. But if you are going for the max bets, then instead of staying on that penny machine you would be better off moving over to a dollar machine and betting the minimum. Fortunately for the house that is where psychology comes in. People think ‘well, I am only playing a penny machine, not betting on the dollar machine’, while most of them do max bets and still blow a buck on each push of the button anyway.

OK, here is the official word on the payback percentages: "the payback percentage is a theoretical calculation that indicates, on average, how much a slot machine will give back to players over millions of spins and generally won’t affect a player’s probability of winning on any given spin or in any given playing session."

So, there is your lesson in slot pay today. And thank you all for coming to Vegas and using those machines. My paycheck appreciates it. And Mr. Wynn, Trump and Adelson aren’t building those golden towers just to give people a nice view. And Ann, sometimes it does take me a while to write these things. My mind goes in a million directions and it takes quite an effort to get the words down coherently (at least I hope they make sense most of the time).

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