Summary

In this episode, Nick and Don catch-up with AGS's VP of Slots, Jackson Floyd, and VP of Game Development, Steve Walther. Learn about AGS's history, cultural leadership, developmental philosophy (Steve's tango analogy is awesome), GameON customer summit, upcoming product releases, and more. Also in this episode, keeping Actual and Theo variances in-check.

Transcript

Nick Hogan:

Good morning Don. What’s shaking in the land of Lincoln today?

Don Retzlaff:

Morning, Nick. Hot and humid. We’re in the midst of summer. It didn’t take long to get to the upper 90s here.

Nick Hogan:

Yeah, well we were just over there last week dodging lots of storms. We did a little whistle-stop tour of the American Midwest, and then we had AGS’s Game on Customer Summit at the always delightful Encore Boston Harbor there in Boston. I think as you know Don, I’m a big fan of that event, and for the uninitiated, this is how it works. Basically each year, AGS selects a casino resort in a given city. This year was Boston, Encore Boston Harbor. Last year, GSR in Reno. The year before that Seminole Hard Rock down in Hollywood, Florida. So it’s a three-day event where you have two full days of presentations and then all sorts of cool mixers and little field trips I guess you’d call them. So parties with bands, golf outings. This year we did a Red Sox game at Fenway, so really cool stuff, but two things make it just super interesting.

One, the talks cover everything under the sun, so it’s not just gaming-specific stuff. We have things from politics to neuroscience and pretty much everything in between. And then secondly, the ground rule for the AGS staff is no selling. So it’s a super low pressure event that’s really conducive to learning and what I’d call deep networking. You can actually get to know people, so it’s an invite only deal. So you’ll need to gnaw on your AGS rep for a ticket, but trust me when I say that, it’s absolutely worth it. You’ll learn something, you’ll have a blast and pick up some new connections that are truly meaningful. So huge thanks to David Lopez and his crew at AGS for making it happen and of course to Jenny Holaday and her team at Encore Boston Harbor for hosting us. It was an incredible event and an absolutely gorgeous property. So great stuff there.

And also Don, very quickly, there’s a story that’s bubbled up on this side of the pond that I thought would interest you. So on the 22nd of May, the UK’s Prime Minister Rishi Sunak. He called for new parliamentary elections to occur in early July, and although the announcement itself was pretty surprising, the real shock came afterward, the revelation that four people close to him, so this is two Tory party members, a campaign director, and a member of his protection detail. They’re being investigated now for placing bets on the election date.

So there wasn’t much detail on the stakes involved, but I did catch a blurb that Ladbrokes had flagged a 100 pound bet with five to one odds, so not a very good payout when your career is going to go up in smoke. I thought you’d appreciate that one. So we have some insider betting now.

Don Retzlaff:

I haven’t heard that story. It’s always mystified me of the countries that can call elections when needed every four years. It’s just an interesting way to do it growing up in the states and we have our elections every four years or every two years. Wow.

Nick Hogan:

Yeah, the parliamentary system’s a bit different. Same deal here in Holland. So anyway, thought you’d appreciate that little tidbit. Okay, so with that I think we’re good to move on to our listener questions. So before we do, let me say that we’d love to tackle any questions anybody listening may have. If you have a question about what we’re presenting or something you’d like us to present, please drop us an email at reelcast@reelmetrics.com. Again, that’s R-E-E-L-C-A-S-T @reelmetrics.com. Our policy is to keep all questions anonymous, so please speak directly and don’t worry about us revealing your identity. That’s not something we do.

So this month’s question comes from a marketing director in the American West who asks, “Hello guys, I have a question regarding variances between actual and theo in slot play. Specifically, I’m interested in how game types and free play impact these variances. When do we become concerned and besides free play, where else can we look for remedy when theo far outpaces actual? Appreciate any insight. Thank you.” Now I really like this question, Don, because it comes from a marketing team that’s new to slots and just starting to cut its teeth in operational analysis. So I think we can clear up maybe a misconception or two here and also discuss a few tips. So Don, you want to take that one?

Don Retzlaff:

Sure. It’s a great question and variances are part of slots, and it really does vary by game type. First off, free play really doesn’t matter. It’s based on all your coin in, so you don’t have to worry about free play, but by game type it does change. Things like video poker will have the biggest variance because it’s a skill-based game. Usually you’re holding about 140% of theoretical, but I’ve seen casinos that are 200% of theoretical, so that’s something that you’re going to have to figure into your holds. Reels are more volatile due to jackpots, and they should be looked at on a longer term basis. Instead of 30 days, you’re looking at 90, 180 days for reels, but your video pennies should be the closest to par, especially if you’re looking at a longer term basis. In a given 30-day period, you could have 40% of your games being outside of 3%. That’s just the way they work on the handle pulls.

But if you’re looking at 180 days or a year, you should be down to the 1 to 2% range as far as how many machines are out of variance. Usually we see video pennies hold about 101% of theoretical, because people won’t play max bet to trigger progressives or

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