Casinos have a vested interest in sharing data about the performance of their slot machines with customers, according to a panel at the Indian Gaming Tradeshow & Convention in San Diego, moderated by Buddy Frank, CDC Gaming’s slot expert and columnist.
Data democratization and slot transparency highlighted the discussion. Panelists noted that operators have it and players want it, so why not share it if it leads to happy customers playing more often and thus increasing revenue?
The panel included Nick Hogan, co-founder and CEO of ReelMetrics, known as the world’s leading aggregator of slot player, product and performance data, and Grant Stousland, founder and CEO of Slot Check, a 2022 startup whose aim is to revolutionize how operators think about player loyalty and how slot players play slots.
“We’re sharing with players the hold on that machine, the return to the player on that machine, how many times the reels have been spun, and how much money was won,” Stousland said. “That slot transparency is engendering trust in the games they’re playing and the casinos they’re playing at.”
Stousland credits Hogan as a pioneer in the industry, while Slot Check has tried to take data a step further for players. Regulators track what slot machines pay out and asked what would happen if casinos shared that same information with players. There are a lot of questions players would like answered, he said.
“How has it paid out recently and relative to what that top number is?” Stousland said. “How many times has a machine been spun over the last seven or 30 days? How many times has this machine been spun since the last jackpot? What jackpots have been paid out and when and how many over the last 30 days, seven days, or 24 hours? How much money has been put into that machine? Which machines have had the most wins per spin? What’s the lifetime payout of a machine?”
Giving players that information would help them decide what games to play, Stousland said. In the gaming industry, a percentage of players playing slots, which is a $70 billion business in the U.S., he added.
“Sharing slot jackpots sounds like heresy, but do you know that your slot attendants have been doing this for years?” Frank said.
Hogan called for more transparent communication about the product on the floor, especially to help with that top tier of players who are productive.
“Casinos ask, ‘If we share the data, will players beat the house?’” Stousland said.
“Players tell their hosts that this machine is rigged and it never pays jackpots,” Stousland said. “Transparency avoids some of those conversations or at least reduces them and reduces some of the nasty comments on social media.”
Hogan admitted that his company has done aggregation on a large scale by challenging some of the beliefs about slot products that have permeated the industry for a long time. He gave an example of the longstanding misconception that a game’s performance in one market was irrelevant to any other market.
“We have 10,000 active game titles in the industry and around two million Class III slots globally,” Hogan said. “It never made sense to me that there weren’t intermarket correlations. The performance in one market is absolutely relevant to performance in another. We found it’s to the tune of about 95%. With only 5% of the products do we see a huge degree of performance dispersion as we go from market to market.”
The industry has always subscribed to “variety is the spice of life” when it comes to slots, Hogan said. Slot floors were historically configured that way and it was a smart strategy for hedging bets and spreading risk. However, “This has resulted in a lot of problems we’re experiencing today. That was the second notion to bust.”
The third notion was that high-performing products steal performance from other machines on the floor; money was just moving around the floor. “We ‘ve gone through and proven that this is not the case,” Hogan said. “We find that when we put these products out in greater abundance than we have historically, it’s actually growing the wallet and we’re seeing player budgets jump up and reach new plateaus. Those are three beliefs we’ve been able to challenge with very large data sets and it’s helping operators now.”
For decades, Frank said the industry hasn’t trusted anyone and has been locked into their prosperity data that they wouldn’t share. That’s a position that’s starting to change and they’re sharing while still being proprietary to protect customer data, he noted.
Stousland said the industry has been “notoriously siloed and protectionist to a fault about data that can make them more money and data they can leverage.” These assets were just lying there waiting to be worked and Hogan has helped crack that code.
“We knew going in that if we had any chance of aggregating, we had to put in place protections for any type of disclosure,” Hogan said. “All their financial figures are anonymized.”
He believes casinos should share their data as a way of questioning beliefs about their operations. They have enormous samples that can be translated into operational efficiencies.
“A number of years ago, we saw there was an issue of understanding who’s playing what game on our floor and how to target these individuals.” ReelMetrics took an initiative called Cupid that is about matchmaking to categorize people and get products to them to maximize consumption.
Inventories are “horribly imbalanced” from casino to casino, Hogan said. Some 3% of players account for 50% of all revenue and when looking at the preferences of the 3%, they see imbalances between what people want to play and what’s on the floor.
“We’re not getting out enough inventory for the top players and that hammers productivity,” Hogan said. “If they’re playing what they want to play versus what they have to play, we typically see a budget delta around 60%. If they’re are on what they want to play, they play about 60% more.”
In looking at more than 100 casinos, Hogan said fewer than 50 titles are generating more than half the revenue. Some 55% of the inventory in those casinos would meet the definition of a “dog performer” and 25% of the inventory is generating play of about two minutes every hour, he said.