Will participation slots ever disappear from the slot floor?

Hi John-

I'm a part-time student who's just starting to learn about the gaming industry, trying to learn as much as I can, so first off thank you for your books and articles. They're more consistently helpful and objective than so much of the other literature out there.

I write with a general industry question about participation slots. I was in Bally's Las Vegas recently and noticed that the Wheel of Fortune slots and a few other brand-name games had all but disappeared from the floor. I spoke to a floor manager, who told me that Harrah's was tired of sharing revenue with the makers of these 'participation slots'; Bally's was therefore replacing them with wholly owned slots and counting on casino loyalty, not game loyalty. That rationale interests me, as I think it speaks to the changing dynamics of the industry.

I did a little research and found that Mandalay Bay tried the same thing some years ago, but I couldn't find out why they went back to sharing the floor with participation slots. I'm wondering if you have heard how widespread the move away from participation slots will be in the industry, if other casinos are likely to follow suit, or details about Mandalay Bay's experiment?

Thanks for your time,
Alex

Dear Alex,

Thanks for the kind words about my articles.

I don't have any details about Mandalay Bay's situation, but I have heard the subject of participation slots discussed in many seminars and roundtables.

A participation slot is a slot in which the manufacturer gets a portion of the win from the machine. Wide-area progressives like Megabucks and Wheel of Fortune are participation slots. Sometimes slots based on a hot theme will also be available only on a participation basis as opposed to being offered for outright sale.

Many casino operators I've heard speak expressed the same sentiments as the floor manager with whom you spoke. Why should the casino share some of the win from a machine? An owned machine may not win as much as the participation slot it replaced, but because the casino gets to keep all of the win from the machine, the casino actually earns more from it.

The conclusion that some casino operators reached is that these machines are "appointment" machines — that is, some players walk into a casino intending to seek them out and play them. A casino has to have these machines because otherwise it risks losing those "appointment" players and the players accompanying those players. They'll all just go to a casino that has those "appointment" machines.

In addition, because players will seek out these machines, some slot directors concluded that they can put the machines in the least desirable locations on the casino floor and save the high-traffic, high-visibility locations for the casino's owned machines.

I doubt we'll ever see participation slots disappear from the slot floor. The games themselves are just too popular with players.

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.