The slots operators are threatening to sue

Just as we all used to follow the form of horses - think the Great Depression and the success of Seabiscuit to see we all love a champion - the latest form book covers the race among US states to balance their budgets. Of course, everyone has been focussing on California with Arnold Schwarzenegger leading the charge to the winning post on getting the budget signed into law. He has enough strength for arm twisting and 'gator wrassling to bulldoze the bill through. But Pennsylvania is just as interesting with the Governor's office matching California's use of IOUs by refusing to pay funds to the four state universities. Probably someone somewhere is running a book on which US state will be the first to declare itself bankrupt. These would be the front runners among an alarming number of states lacking initial prudence and the political will to raise taxes, to cut spending, or both.

Anyway, the real point of interest in Pennsylvania is the growing threat of litigation from the group of license holders who run slot machines. When the licenses were first issued, the state sold maximum exclusivity for a high fee (that's $50 million a license). The enabling law is very clear. No other gambling outlet will be allowed to compete directly with the market for slot machines. At the time, this looked a good deal for both sides. Gambling was a popular activity and the state benefited from a generous input to its finances. Fast forward and the recession has forced people to cut back on their discretionary spending. This means less money to spend on trips to gamble. Ironically, the casino operators to benefit from this have been online. Had it not been for the changes in the law making it difficult to move money into and out of the online casino accounts, they would have cleaned up. So this leaves the current license holders under pressure with building work on some of the proposed casino and resort sites put on hold. While the government finds an expanding black hole eating up its cash reserves as tax revenue falls. The state's answer is proposals to increase the number of slot machines allowed in the existing resorts and to license new resorts. To the existing license holders, this looks like plans to allow direct competition from new operators. They are up in arms with their attorneys slavering on the end of a short leash, just waiting for the chance to sue.

There's no doubt slots still represents a pot of gold for both the license holders and the state. The machines are still a big draw even though the recession is biting hard. But this plan looks like an expansion too far. The average spend has dropped. If the state increases the number of machines, this will only spread the same amount of money around more machines. It's not going to increase the size of the spend. This leaves the state with a growing hole in its accounts and the existing license holders with a good case in contract and constitutional law. With the online casinos introducing new slots games every month and keeping up player interest, this is no time to be fighting over a reducing market in the real world.

Licensing slots in the US

It used to be so easy when issues were black and white. Alcohol is a wonderful example. If lawmakers decide alcohol is a bad thing, we can have Prohibition. This was tried in North America and failed. It continues to be successfully applied in Islamic countries where the public consumption of all alcoholic beverages is largely banned. But as we have moved through the 20th Century in the developed world, too many people see shades of gray. Now there are two sides to every issue and this drives the way our media report the news. Everyone is entitled to their own opinion. Respect is the new game in town.

In most US states, lawmakers have been struggling with budget deficits for years. These problems are worse now the recession has arrived. The tax-take from conventional businesses and earned income has dropped with businesses failing and unemployment growing. As property values fall and rates of foreclosure increase, property taxes have also dropped. Many states reacted by taking plans to license slots off the back burner. They want to encourage you to spend what is left of your money on gambling. A tax on the gross revenue of the license holders then keeps the state solvent. But the story in some states gets dark and murky as political influence over the licensing process comes into play.

It should be easy to say which individuals or corporations are fit and proper people to run licensed gambling in the US. But, when it comes to the amount of money to set up sites for slot machines and then the potential for long-term profit, you are suddenly reduced to a select group of people who have the capital and the influence to get the licenses. If only this process worked well! As an example of the problems, let's go to Maryland where an "independent" commission awarded the first of five licenses to the operators of Ocean Downs, a racing track near Ocean City. The license allows the installation of 800 slot machines on the site. Except the operators have now made some exciting discoveries. It seems there is a small mountain of asbestos to be removed from the site as part of the rebuilding and renovation exercise. Better still, it seems the grandstand is likely to collapse soon. There is major corrosion in the steel holding it up. Put another way, the racing track should have been closed down years ago as too dangerous for the public to use. The link between asbestos and malignant lung cancer is well-known. Gamblers at the race track have been breathing in the fibres for years. If the grandstand had collapsed, hundreds could have been injured. Yet this site was approved for 800 slots.

Corruption comes in many forms. Some is serious, other less so. But the reality is that gambling in general and slots in particular should be run by people who are obviously reliable. No matter how much states may need the additional money from taxing gambling, people's lives should not be put at risk. That's both in the physical sense of safety and in the economic sense - there are hundreds of thousands of vulnerable people who destroy their own lives through a gambling addiction. States should protect all their citizens from harm.

The house edge on blackjack worsens

Well, the inevitable has begun to happen. When the recession first hit and credit dried up, everyone predicted the casinos would lose out. If the banks squeeze credit, people cannot maintain their levels of discretionary spending and, sadly, gambling is always going to be one of the choices made less often. The prediction then ran on: if fewer people go into casinos and those that do go spend less, the casinos will find their profits under pressure. At this point, the forecasters would take a deep breath. This will not be a problem so long as the casinos hold their nerve. The economy will slowly pick up. Confidence will return as consumers save less and spend more. In three to five years time, casino revenues will be back to their normal levels. But, and this is where the forecasters would look grim, if the casinos try to suck extra dollars of profit out of fewer players, they risk killing the golden goose. So which way have casinos played their hands?

In most states, blackjack has always been the biggest table game. But in 2009, casinos across the US lost an average 20% of their annual revenue from the tables. When you lose such a big slice of your revenue from just one game, this puts pressure on the casino operators. Unfortunately, they have tended to move in the wrong direction. Most states regulate on the basis of a 3:2 payout on blackjack (i.e. if you bet $10 and win, the casino pays $15). In Colorado, operators have applied for an increase in table odds to 6:5 (i.e. a winning $10 bet pays out only $12). For those of you who like the math, this lifts the house edge from 1.5% to 2.9%. In Nevada, the table odds moved to 6:5 months ago, closely followed by a general raise in the table minimums. This drove away the casual players and, not surprisingly, the high rollers followed. The casinos shot themselves in the foot by both tightening the rules and reducing the payouts.

Where has the business gone? Well, the hard core gamblers have decided they don't like the deck being so obviously stacked against them. There's no reason why should they tolerate low payouts when online casinos have kept their table odds at a fair level and not changed their table minimums. Online, you can still play at $1 or $5 tables if that's all you want to risk. The higher table minimums are there if you want them but there's no pressure. In the real world, slightly stressed staff are trying to encourage you to spend more. Sitting in the peace of your own home, you can pull a beer out of the fridge and take life easy. There are so many good online casinos where you can play blackjack with many different styles of online blackjack to choose from. If the mood takes you, there are tournaments to play. If the money runs out, you can always play for free. This is one time when the greed of the real world operators has worked against them. In the good old days before the internet, it was a real world casino or nothing. Now that the internet has come of age and the quality of the casino software has improved, the real world casinos have a real fight on their hands if they want to remain relevant.

Why play for free?

Walk through the doors into any real world casino and you hit the slot machines. There's a slight difference of opinion between the casino operators. Some believe the machines are the most popular form of gambling and make everyone walk into the floor area where the machines are sited before they get to the table games. Others have a floor plan called the premium strategy that pitches their operations at the non-slot players who spend more per head on the table games. The machines are still featured as you walk into the casino, but the view of the tables is more obvious. Interestingly, there seems to be very little difference in the spend-per-machine in both layouts. The people who favor slot machines will play them no matter where they are sited in the casino. It's also a fact that, except for the contributions made by individual whales, casinos make more money from slot machines than from the table games, the balance shifting depending on whether the premium strategy is in operation. Online, there are sites that are exclusively based on slot machines. Other sites operate the full spread of casino games. This leaves the operators to compete on the bonuses (welcome and otherwise), comps and the quality of the service. In real world casinos, the operators can comp you on the machines but it's technically difficult to enable free play. Online, all that changes.

Every site allows all users the opportunity to play some of their games for free. Why should anyone want to play for free and give up the chance of winning some real money? The answers are both simple and complicated. The spinning reels are essentially the same in both real world and online casinos with the games easy to understand and so quick to learn. Once the reels are set in motion, all you can do is wait for them to stop moving. This means no particular skill is required to play. As a bald description, this misses out two key factors. The spinning reels are quite hypnotic. You almost feel you can reach out and stop each reel in just the right position to score a big win. Secondly, it's fun to play. This fun element is what sells free play. Yes, you lack the extra excitement by giving up the chance of winning. But it really is still fun to play. More importantly, with more and more new games coming online every month, it's very useful to be able to study them without risking your money. Although the basic concepts are the same, the individual variations still have to be learned. In the real world, you can stand and watch others play, learning from their mistakes. Online, you are denied this opportunity. That makes free play a fair offer from the casino operators.

There is one final reason and this may be a little complicated depending on your view of luck. Many people who play slots believe in flows of good and bad luck. If your luck is out, it's good to be able to keep on playing for free. No-one wants to keep feeding money into a machine when you know you are not going to win. Slots and Lady Luck do go together so mix and match free and paying play as you come into and fall out of her favor.

What makes games popular?

Given the history of some games starting in China around 2000 B.C., the question naturally arises as to what makes any game popular. The first games to achieve success were based on dice. It probably all started around the fire in the cave when, having stuffed themselves with dinosaur rib at the bar-b-q, they moved on to a little action with a few carved bones. But, as time progressed and money was developed, the idea of money changing hands based on a throw of the dice caught on. In this, you see all the key elements making any game popular. The concept of gambling is seductive. You place a small wager on the outcome of an event outside your ability to control. If you win, there's a big profit and this is a compelling reason to carry on playing because you believe you will win again. The second feature is the sociable nature of the playing environment. There's a crowd watching. Sometimes it's only other players but, more often, gambling is a spectator sport. This creates a community and it supports and encourages the players. Rich backers appear and bankroll the best players for a share of the expected profits. Add in good customer service from whoever provides the playing environment, and the honey pot nature of the exercise is complete. As to the game itself, it must be fun to play. It must be easy to understand the rules. Everyone must be able to see the skill or luck of the winners. And, the organizers must make realistic attempts to prevent or control cheating.

So where does this leave us? In the modern casino, both online and real world, the most popular games are probably blackjack and poker on the card tables, craps and roulette on the other tables. All four are simple to understand. The cards must add up to 21 or a limited number of card combinations makes you the winner. Or you bet on the throw of dice or the spin of wheel. It takes only a few minutes to explain. You watch for a while and then you feel confident enough to play. It's almost immediately exciting. You handle the dice and throw. You finger the chips and play the cards. All with money riding on the outcome. If your luck is in, you end up a winner and most are hooked. The problem with more complicated games is people do not want to put in the effort to learn. They must see it, see others win and feel confident they can start winning immediately. Any game where it looks easy to win big money is popular.

Now when you transfer the experience on to the small screen of a computer and strip away everything about the experience of being in a casino, the true popularity of online casino games is revealed. Slots are slots. You click on "play", the animated reels spin, and you win or lose. It has a hypnotic quality. Click, spin, win. It's the same with blackjack, craps and roulette where you are betting on the results produced by the random number generator. Poker remains interactive where you bet on the cards and your skill in playing them. In all, it's the belief you will win big that makes casino games popular.

What are the options for betting?

Although there are a number of slot games repeated on some of the sites with shared operations, the reality is an expanding universe of different games. Like the Big Bang which supposedly began our universe, the inventiveness of the different software producers knows no limits. This fuels the competition for players between the sites with the endless rollout of new games. As a result, it would take you years to try them all. Nevertheless, the actual betting choices to be made come down to a few simple steps. The three main variables are the number of paylines to play on each spin, the number of coins to bet on each line, and the value of the coin(s) to bet. The majority of the games allow a free choice on the three variables. But some games restrict the choice on the second or third options (none of the major games eliminate both). So, some fix the value of the coin to be bet or only allow one coin to be bet per payline. This allows us to offer this summary. The amount you decide to bet per payline is the value of the coin multiplied by the number of coins. The total bet on each spin of the reels is the bet per payline multiplied by the number of paylines.

Now we come to an odd truth. The majority of games allow you to choose the number of paylines to play. Where the number of available paylines is great, there can be a real decision to be made. If you are betting one coin of value per payline, one hundred paylines per spin can work out quite expensive. Yet answer this question. What is the point of playing with paylines disabled? With the exception of games permitting scatter wins, you only win on enabled paylines. While this is merely a source of frustration in a conventional game when you see winning combinations on disabled lines, it can be critical on progressive machines. Often the jackpot only pays out when the highest payline has the winning combination. If the total bet looks outside your budget, reduce the value of the coins. If the bet is still too high with the minimum coin size selected, this suggests you should not be playing this game.

When you first approach a game, look carefully at the choices you can make. The critical differences lie in the coin sizes and the gaps between each coin. The best games have a big range of coin sizes with even gaps between them at the lower end and gently scaled gaps at the high end. This allows you the maximum flexibility to fit the line and total bet per spin to your budget. In calculating your budget, factor in the length of time you prefer to play. Slots is a game meant to be fun. If you burn your budget in ten minutes, this is not fun. Always remember to set a loss limit before you start playing. Decide the point at which you will stop. Slots is only fun so long as you are not digging yourself out of debt for the next six months. If you win, as everyone does from time to time, you should also stop. These winnings can buy you a drink and a meal. They can pay for your next session of play.

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