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Casinos Bet on High-Tech Slots

"He's preparing them for their casino performances - not onstage, but for talking slot machines bearing their names.

"...Peterson, who may have one of the most unusual jobs in the gambling industry, works for the world's largest slot machine manufacturer, International Game Technology. IGT and numerous other slot manufacturers share the same goal in a fast-changing industry: to create a new generation of high-tech million-dollar slots to make it more fun to lose money.

"Using stereo soundtracks, digitized video and interactive, touch-sensitive screens, new slots hit themes of nostalgia and pop culture, from Humphrey Bogart and Marilyn Monroe to Spam and Harley-Davidson.

"In 2002, gamblers poured more than $28 billion into slot machines in the 14 largest markets in the United States, plus more into slots operated in Indian casinos that don't report their revenues, according to gambling industry analysts at Bear Stearns.

"On the Las Vegas Strip - long the capital of traditional table games such as blackjack, craps and baccarat - slot machines generate more than 50 percent of gambling revenue. Nationwide, slots bring in 75 percent of total wagers.

"...Casinos love slot machines. They are guaranteed moneymakers, typically configured to keep about 5 cents of every $1 wager. (By comparison, table games make about 15 percent profit but have greater overhead.)

"But casinos also are paying more for them. The manufacturers spend more than $1 million to research and develop the most advanced models, and pay licensing fees to use brand names, from cartoon characters to television shows and board games.

"...The head of game development for IGT, former Sega pinball designer Joe Kaminkow, said his team of 600 designers and engineers is working on 160 new models. Progress is recorded on index cards tacked to a wall inside his office. To shield them from a visitor's wandering eyes, he lowers a window blind over the display.

"...The flood of more complicated slot machines is burdening the Nevada Gaming Control Board, which examines the machines to make sure they are not, and cannot be, corrupted by cheaters.

"...The most significant advances since then were designed less for entertainment than to speed up play or encourage bigger bets.

"The classic pull arms have given way to push buttons, and machines have long accepted paper currency, freeing gamblers of coin buckets - and prompting larger wagers.

"With touch screens, gamblers could choose from multiple games and increase their bets from single pennies to multiple dollars.

"The newest machines no longer noisily pay off in coins, but spit out paper receipts that can be redeemed by a cashier - or inserted into another machine. Patrons prefer not to handle dirty coins, and "cashless" machines have cut maintenance costs by 40 percent..."

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