Regulatory Issues

[DealingwithNIGC542]

Thank you, Statfreak - another lesson learned.

Just got done working up my variance reporting for March - I was dreading it because we added a dozen new machines to the floor - you know where this is headed - BUT LO!! While the new equipment did show up on the report, when I pulled the PAR sheet(s), not only did they have Standard Deviation and volatility index(s), they were calculated to both 95% AND 99% confidence intervals - did find it interesting that the game cycle WASN'T included.  Anyway, that brightened my day -

TZ Tech, StatFreak - I did skim the Slot Tech article when I first saw it, but most of it was beyond me - care to expand a bit on what this product means to game design/production? Take it easy on me, gentlemen, but I am curious....

Thank you....

[Op-Bell]

You can hear the curmudgeon's view first, since I happen to be passing. It has very little relevance to game design or production. An RNG continuously running, and sampled at a random time when a player presses a button, is about as perfectly random as you can get. The only place it could make a difference is is the game software draws several random numbers in succession based off that single random time event, where there might be sequential correlation - but correlation can be avoided by hiring competent programmers who know what they're doing. Of course these cost a little more than unemployed Java hackers.

As it happens, there are OEM slot control boards that already incorporate a hardware RNG - the Acrosser range, for example. They're quite proud of it.

[TZtech]

Hi

Hi - At the time the company had about 8000 machines across 30 sites (Sun International in South Africa). Most of the units had Senior Tech that had a statistician portfolio. The spreadsheet we used propably uses the sames formulas as the calculator you posted. (Still trying to figure out the maths to do it in excell). We had to copy across all the info from the manufacturers data but once we had a populated spreadsheet it was saved and went onto a intranet and was available to all units. I recall the older IGT PAR sheets were in word so it was easy to cut it from the doc and paste it straight into the spreadsheet (You had to do some cleanup but it worked mush faster than copying figures across manually)

Score was calculated on a monthly basis. I worked in one of the smaller units so i did not have huge handle movement so jackpots would sometimes throw out the score. Usually the game would swing on the next month cycle. There was however a case where the manufacturers had set up a machine to a different percentage than was on the system and it was picked up with this report.

Knowing what you do (now), would you have any trepidation about running these games on your floor?

Currently working in an extremely low tech environment. Some very old machines (IGT S+,PE+,Aristocrat 540, Olympic) spread out over different sites. Using coins only that get counted every 1 to 4 days depending on how busy it gets along with machine meters that get recorded and captured manually - This alone is a full time job.
In my newer shops we have some of the later IGT and Williams games on a cashless system and yes i am comfortable in running them. However i have not been monitoring performance at this level and now that i have the necessary data to my disposal i would like to start doing so. Like you i need the tools to do this - Will attempt it with excell if i do have any luck i will post the result.

Regards
Ian

[DealingwithNIGC542]

So Op-Bell, I looked up Acrosser Range; this is really interesting stuff. Question (and forgive the laymans perspective): In reading the Acrosser Range product information, I got the impression that this product(s) would allow a game manufacturer to effectively eliminate the need for what I think of as an "assembly line". If I'm interpreting this correctly, the game "manufacturer" buys hardware/firmware/middleware from Acrosser and then develops/installs the game for distribution. I thought back to an earlier post of yours (quoted below). Is the Acrosser Range (and similar products) what you were alluding to? Is that correct?

#4, Put not your faith in GLI, or any other test lab. Maybe in the past they did full evaluations of game software, but these days, especially with the move to use third-party code and proprietary operating systems like Windows for which there's no source code, it is far beyond their capability. All they can do is test the game to see if it complies with the manufacturer's own specifications, pretty much the same as you can. Not even the original designers can know all the twists, quirks and vulnerabilities. A smart programmer could put a gaffe in there with virtually no chance of anyone spotting it - and who's to say they haven't already?

TZtech (Ian) - I do not envy you - "coin-op" slots and manual meters - I had to do pieces of that myself at one time. Damn straight it's a full time job. Something that I might suggest when you get around to evaluating your newer equipment.

Even though some PAR sheets don't have eval tools provided, I took it upon myself to set up what I call a "trend" spreadsheet. For all those games that I can't properly evaluate, monthly, I record the difference between actual and theoretical hold on a spreadsheet so that I can monitor which direction the game is "trending" - is the game moving towards it's theoretical hold or away from it. What I've found (don't take this as gospel; it's just an impression from looking at data spread out over a few months) is that games trending away from theoretical hold (the casino isn't making as much as it should) tend to stay that way; games moving towards or beyond theoretical hold (the casino is making more than it should) tend to stay that way. There are SOME reasonable explanations for this "trending"; some game bonus rounds allow a player to "replay" a bonus round - they can refuse to take whatever they won in a particular bonus round and try to do "better" - features like that can affect actual against theoretical hold. Thing is, you have to really dig into the PAR sheets to figure some of that crap out and/or observe the game in play to understand how the damn thing works. Not enough hours in a day to cover all the bases. That "trending" is one of the (other) reasons I started digging into this whole mess to begin with.

And, for all - Randy Fromm sent me an interesting note - curious about your impressions:

It occurs to me that if there is no way for a machine to complete even a single machine cycle in its servicable lifetime, the casino has sort of become a gambler, hasn't it? It's not even fully "playing the odds" of a full machine cycle, it's "hoping" that the 10% of the machine cycle that they WILL play is a "good one."

Maybe I'm reading this wrong. I'm a hardware guy mostly.

Thanks, folks....

[jay]

The basic business model is Revenue - Expenses = Profit.

So in my opinion (IMHO) as long as the machine remains in the positive hold position whether it is 2% or 25% its not really gambling for the casino as long as the machine is being played.
Given that a casino would likely have 100+ machines the law of averages kicks in here and the hold balances out.
 The Gamble in this economy however is what is your revenue base ??? how many machines should you have ??

The economics stem from the cost of money ? say a machine costs 15K and is leased over 36 months at 6%. They are really paying 17.8K for the machine.
With 2.8k of that being the "cost of money". That machine must "keep" $77 per month to justify its existance....to the bankers. This doesn't cover the rent, power, a/c, maint etc.
While $77 doesn't seem like a lot at a 96% payout thats a hold of only 4% which requires $1925 in incoming revenue. Just around $70 per day in play and you have not covered any other expense.

The problem in the current economy is that there are more machines than players. In the old days you could put in 100 machines and have good play, and if you had the space for another 100 the revenue model was scaleable - today you are not getting the play. So a place like the MGM grand which has probably 2000 machines I am thinking that they are not "earning" their keep.

[DealingwithNIGC542]

Op-Bell, Brichter, Jay, TZTech - a quick note - Sat through my monthly Stat Review - put everything out on the table to try and gain a concensus - I used pieces of the input you-all provided and FINALLY saw some "lights go on" around the table. We're going to work up some boilerplate text to place with each review report outlining what we know, what we're trying to do and how we'll get there. Everyone on the review panel will sign off on the text, and it goes on file. I also got the G.M. to speak a little - we are visited 3 or 4 times a year by a Field Investigator from the NIGC - kind of a courtesy "hey, how ya doin'" kind of thing. I'll get to meet with the NIGC agent, run down what the problems are and put a piece of the problem the hands of the NIGC. I know, I know - working through the Fed to correct a problem like this is like trying to push a 5 ton stone block up a sand dune with your nose - It CAN be done, but you gotta have patience and determination...

Thought you'd like to know and thank you for all your help. You expanded my knowledge base in a way that allowed me to express myself clearly and (at least in part) convincingly ...

P.S. Op-Bell and the others - could you speak to the Acrosser Range products (and those like it) a little more? I'm having difficulty divining where and how these products "fit" in the overall scheme of things? Where is this technology going to take the industry?

[TZtech]

Hi All

For those of you interested in slot math
http://www.casinoenterprisemanagement.com/articles/august-2009/vicious-cycle-part-v-variance

Regards
Ian

[StatFreak]

Hi All

For those of you interested in slot math
http://www.casinoenterprisemanagement.com/articles/august-2009/vicious-cycle-part-v-variance

Regards
Ian

Thanks TZTech.    That's actually the last part of a five-part article.

Here are the links to all of it:
http://www.casinoenterprisemanagement.com/mp3-library/slot-mathemagician-presents-vicious-cycle
http://www.casinoenterprisemanagement.com/articles/may-2009/vicious-cycle-part-ii-volatility
http://www.casinoenterprisemanagement.com/articles/june-2009/vicious-cycle-part-iii
http://www.casinoenterprisemanagement.com/articles/july-2009/vicious-cycle-part-iv-balancing-act
http://www.casinoenterprisemanagement.com/articles/august-2009/vicious-cycle-part-v-variance

[DealingwithNIGC542]

TZ Tech, StatFreak - Hello again... Thanks very much for the article link(s) - intriguing reading. I believe I'll drop Mr. Wilson a line  - see what he thinks about the regulatory side(s) of this issue. By the way, I have found a new (read different) approach to my problem(s) - I've been keeping an eye on game revocation notices as of late - Interesting how many of them there are and how often they come through.... Thanks again, folks....