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Are Players Ready Yet for Coinless Slot Machines? The Fiesta Casino in Las Vegas Will Find Out

After a lot of talk, the gaming industry is finally about to find out whether casino customers are really ready for coinless slot machines.

Tuesday, the Fiesta hotel-casino switched 50 video poker machines to entirely coinless format. If successful, the Fiesta could convert as many as 300 of its 2,000 machines to coinless in a short period of time.

Market observers say it could be a market development as significant as the introduction of the bill validator, now ubiquitous on slot floors.

"If it works, then you're within 45 days of people accepting them (across Las Vegas)," said George Maloof, president of the North Las Vegas casino. "This is one of the most competitive markets in the world, and you never want to be last."

Maloof today said gamblers like the new machines and are getting used to the ease of play they offer.

"So far, so good. We've had a good response."

Coinless has been widely discussed in Las Vegas, and made its first appearance more than five years ago at the MGM Grand hotel-casino.

But the problem now is the same as it was at the MGM Grand then -- customers may like the experience of coin play too much to go to a coinless system. The machines were quickly pulled from the MGM Grand's slot floor because of low customer acceptance.

Maloof believes some portion of the market may now be ready.

"For someone to make a whole floor coinless, the market's not ready," Maloof said. "But there's a certain person that doesn't want to mess with coins any more. That's perfect for them."

Casinos remain keenly interested in the machines because of the incredible savings they represent.

Las Vegas Investment Advisors estimates that a typical slot machine runs up costs of $250 to $500 per month in operating costs associated with coins, such as wrapping coins or filling hoppers.

Even assuming the lowest cost estimate means the 134,000 slots in Clark County casinos rack up more than $400 million in coin costs each year.

Andrew Hatherly, an analyst with Las Vegas Investment Advisors, notes that these costs are accelerating because of the explosion of the nickel slot machine. These machines, which usually come in a "multi-line, multi-coin" video format, allow customers to wager the same amounts of cash as a quarter or dollar player on each spin.

These slot machines now represent 28 percent of Nevada's total slot inventory, up from 25 percent. While total slots grew by 4 percent, nickel slots grew 18 percent.

And that's creating problems for casinos, since relatively paltry payoffs, such as $20 or $40, can easily empty a machine hopper.

"It's driving the slot attendants crazy because they're running around the floor like chickens with their heads cut off, filling hoppers," Hatherly said. "There's certainly a big push for coinless now. Casinos have a tremendous stake in getting rid of metal currency on the floor. It would be an immense cost saving for them."

Marcus Prater, director of marketing at Alliance Gaming Corp. -- the parent company of slot route operator United Coin -- said coinless also results in huge benefits for players as well. When a player wins a big jackpot at a convenience store slot, for example, the player must often wait more than an hour for a service person to show up to pay the player, Prater said.

"All that's eliminated with the ticket system," Prater said. "When we put the ticket system in, players don't just embrace it, they stampede toward it."

Next: Part Two: New system accepts printed tickets just like cash.

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