Why aren't slots with virtual reels considered fraudulent?

Hi John:

I appreciate how clearly you explain how slot machines operate.

I do have questions though on whether or not slot machines are fraudulent.

In your August 11, 2008 article "How does a slot machine use the numbers from the RNG?" you outline that the physical reel of a Double Diamond machine (which is what players can actually see) shows 2 Double Diamond game symbols out of the 22 possible outcomes on the reel. This shows the player that they have a 9.09% chance (2/22 = 9.09%) of having a Double Diamond symbol land on the payline. However, as you point out, on the virtual reel there are 2 Double Diamond game symbols, but there are now 72 possible outcomes. This results in the player only having a 2.78% chance (2/72 = 2.78%) actual chance of having a Double Diamond symbol land on the payline.

The Double Diamond machine example you use is how physical reel machines that use the Telnaes patent operate. The Telnaes patent is the process of using virtual reels to map results to physical reel stops. I find it interesting that in the Telnaes patent application it states "Thus it is important to make a machine that is perceived to present greater chances of payoff than it actually has."

Gaming regulations do not allow the industry to operate other games that deliberately mislead players - this is one of the reasons why Three Card Monte is illegal in most jurisdictions, and why there are so many controls to ensure all the games that are operated are fair. How is it that slot machines can operate this way without being considered fraudulent?

Steve

Dear Steve,

Thanks for the kind words about my columns.

At around the time of the Telnaes patent, many states were starting their lotteries. Slot manufacturers and casinos wanted to be able to offer machines that had jackpots of hundreds of thousands and millions of dollars to compete with the lotteries.

A 3-reel machine with 22 stops has 10,648 combinations. The jackpot is limited to 10,648 credits per credit bet -- and that's a breakeven machine with only one winning combination. The practical limit to the jackpot is much less when you factor in lower-paying combinations and the house edge. We have to decrease the chances for hitting the jackpot in order to increase it.

There are two physical ways to make the jackpot less likely. One is to increase the number of stops per reel. For a reel to have more stops, either the symbols have to get smaller or the reels have to get larger. This way wasn't going to work because there's a limit on how small the symbols can get (Get out your reading glasses!) and how large the reels can get.

The other way to decrease the chances of hitting the jackpot is to add on reels. This method is much more effective than increasing the number of stops. If we increase three reels to 32 stops, the number of outcomes is 32,768. But if we add a fourth reel with 22 stops onto a 3-reel machine, the number of outcomes is 234,256. A fifth reel brings the number of outcomes up to 5,153,632.

The problem both of these methods have in common -- and if I remember correctly, similar text is in the patent -- players intuitively knew that their chances for hitting the jackpot weren't as good as on the 3-reel, 22-stop machines. Especially in the case of the 4- and 5-reel machines, players intuitively know that hitting four or five of something is less likely than hitting only three of something.

In order to compete with the threat that they thought the state lotteries presented, the Nevada Gaming Commission allowed machines with programming based on the Telnaes patent. If I remember correctly, they thought it was a matter of survival for the slot floor. Why would people risk a dollar for a chance at $800 on a slot when that same dollar would buy them a chance at a million?

I suppose machines using Telnaes maps are not considered fraudulent because much slot-enabling legislation and numerous gaming commissions say they aren't fraudulent.

It's ironic that today players accept video slots with five reels, and extra reels are starting to appear on reel-spinning machines. Perhaps players would have accepted the machines with extra reels and we wouldn't have needed virtual reels at all.

Best of luck in and out of the casinos,
John

Send your slot and video poker questions to John Robison, Slot Expert, at slotexpert@comcast.net. Because of the volume of mail I receive, I regret that I can't reply to every question.