Pokies and Slot Machine Information

Queensland registers huge increase in pokies losses

Queensland, Australia has a population of a little over 4 million people. Take out the under 18’s and there are quite a few less again. The over 18’s are spending ever more on slot machines, and the State Government is becoming ever more reliant on the stream of tax revenue they provide - at the expense of players.

“GAMBLERS in Queensland lost a staggering $1.73 billion on the pokies in the year to
January, an increase of more than $100 million on the year before…the losses continue to create a windfall for the State Government, with $592 million expected to be raised in revenue from gaming machine tax and levies this financial year alone”

Courier Mail Article

One slot machines profit - $410,506 in a year

A record profit for a slot machine was recorded in South Australia, according to a Sunday Times article:

“a single SA machine recently logged a net profit of $410,506 in a year – more than $1100 a day”

Sunday Times Article

Thats a pretty incredible profit for an electronic device about half a meter wide which just sits there and attracts customers. Note that that is a net profit figure - after running costs have been removed.

Making slot machines can be profitable

Aussie slot machine manufacturer Aristocrat is likely to report a juicy profit:

“The Sydney-based company is set to report a doubling of net profit to $249.65 million for calendar 2005″

Sunday Telegraph

Aristocrat games are some of the best looking in the industry. They play well, are usually very easy to understand and can be found in huge quantities in Aussie pubs, clubs and casinos.

Perth nixes pokies

Western Australia is the lone Australian State to have no video slot machines as such. They do have 523 assorted video poker machines and mechanical slots. Western Australia is about the size of Western Europe. Some people have to travel long distances to play.

This was covered in a previous post on this blog:

Slot Machine Blog Article

PBL, the owner of Burswood Casino - which has all 500+ gaming machines in the state - wants to increase its machine count considerably by introducing proper pokies/slot machines. Its chief met with Western Australian politicians recently:

“Mr Packer met Premier Alan Carpenter on Monday in a failed attempt to get the Government to overturn its ban on traditional poker machines ….. Mr Packer made it clear pokies were the only way PBL could fund a $500 million expansion of the casino.”

They could also possibly fund it using the massive pokies profits generated by PBL’s Crown Casino in Melbourne, but thats beside the point.

NSW clubs pokies tax review

Clubs in the Australian State of New South Wales are unhappy about their governments decision to increase the tax take on their gaming profits.

Illawarra Mercury Article

Governments already take too much in tax from gaming machines - a very fat cash cow for them at the expense of players.

Its interesting to see that the government needs to ‘negotiate’ its tax increases, instead of simply implementing the changes as it sees fit.

$500 slot machine bets in Melbourne

We previously referenced a Las Vegas casino which allows patrons to bet up to $500 a spin. The same bet is apparently also available here in Australia, at Melbournes Crown Casino.

Herald Sun Article

The high value slots are in VIP areas (VIP might also mean Very Impressive Profits?) of the casino. At $500 a spin, if the return to player (RTP) settings are as low as on the main casino floor you would soon rack up huge losses. Its more likely the VIP slots have higher payout rates.

On a $5 bet on many pokies you can win up to around $1000 a spin - if the $500 machines pay similarly, you might expect to win up to $100,000 on a single spin.

$52 billion gambled in 3 months

Aussies gambled $52 billion dollars in just the last three months of 2005 - around $2500 per person.

Actual player losses on gambling were $1.97 billion dollars for the same period. This translates into roughly $8 billion dollars in gambling losses over a year.

Australian Bureau of Statistics

Gambling now represents 40% of the turnover of hotels and licenced clubs - and 3.7% of total retail turnover in the country - and a massive 7% of total retail turnover in the State of New South Wales. No real surprise there, New South Wales has over 100,000 slot machines.

13,500 slot machines destroyed

When hurricane Katrina swept through the Southern USA in 2005, it destroyed huge swathes of the countryside. Included in the destruction were numerous floating casinos and their ubiquitous slot machines.

“Some of the one-armed bandits were washed into the sea. Looters ran off with others. And the vast majority … were destroyed”

Sfgate Article

Its a bit unlikely looters actually ran off with some of the machines. With the weight of many units over 70kg (150lb), it’s more likely they hobbled off quite slowly and still have bad backs now.

Slot machines are highly sophisticated, very expensive electronic money gobblers. The replacement cost for so many machines is multi millions of dollars. Instead, some manufacturers are trying to repair or rebuild the gaming units. Its a difficult task when so many of them were immersed in salt water.

There is an additional concern. One of the reasons modern slot machines are considered technically impregnable is that so few people have access to their internals and software.

“With people always devising ways to cheat the machines, IGT may have to rewrite the slots’ software. The fear: People could have broken into some of the machines and stolen the software with hopes of coming back to a casino and rigging a jackpot”

Rewriting software isn’t all that difficult, but deploying it on the tens of thousands of machines IGT have installed around the world certainly might be.

There was a case a few years back where a pokie player had inside knowledge of how to trigger a large jackpot on a certain type of machine (not an IGT game). Unfortunately for the player, he made the mistake of ‘winning’ twice. It made it very easy for him to be identified and arrested.

Pokies cash cow revealed

Another day, another interesting revelation in the Sydney Newspaper the Daily Telegraph:

“…the top 25 licensed clubs in NSW collectively earned more than $1 billion in pre-tax profits in the 2005 fiscal year…”

and

“the NSW Government … skims off close to $1 billion a year in pokie taxes”

Daily Telegraph Article

Is it any wonder the average player has little chance of winning when playing the pokies at their local venue? The NSW government is reaching its hand into players pockets in ever greater amounts.

There are over 100,000 slot machines in New South Wales - an incredible number by any standard. Assuming a slot machine is around 48cm wide, if you lined all of those pokies up side by side, they would stretch for almost 50 kilometres (around 30 miles).

To keep attention focussed on the issue, we’ve christened a new cow, Mooola the pokies cash cow. Every time you go to play the pokies, think of just what you’re donating to your government.

Think of Mooola the pokies cash cow, then think of what else you could be spending the money on. Lobby your government to reduce their steep pokies taxes. Stop feeding the cow!

National Gaming Machine Standards update

A previous article here presented an overview of the National Gaming Machine Standards.

Pokies Standards Article

The standards exist ostensibly to ensure pokies are run fairly. In the words of the Queensland State Government:

“In this regard, all gambling legislation was amended in late 2000 to incorporate an overarching community protection objective to provide that, on balance, the State and community as a whole, benefit from the conduct of gambling”

Well there is no doubt the state is benefiting - it’s raking in hundreds of millions of dollars in tax every year from gaming machines.

The other point of the standards is to provide a framework such that gaming machines are operationally the same from state to state around the country. Where regulations are different in each state, the costs of manufacturing slot machines will increase:

“Currently we have to provide up to 27 versions of the same gaming machines to fit within the requirements of every state and territory”

Gambling Licences Article

Its always the case that where costs are made artificially high through differing regulatory regimes, the end user - the slot player in this case - will ultimately wear the cost.

Thus the gaming machine standards were created. The reasoning behind the standards appears to have been weakened by the creation of appendixes to the Gaming Standards - each state or territory is able to add specific extra regulations in appendixes. We’ll have a look at some of the Queensland, Australia appendix details:

Qld Office of Gaming Regulation

Note: we’re not picking on Qld here - they simply have a very well laid out and informative web site. Most other states also have appendixes.

Page 2: Q1.1.b “Game features deemed to be likely to mislead players will be prohibited. For example: where a game feature appears to involve physical skill.”

On the surface this would seem to make the games a bit boring - but the goal is laudable - tricky games don’t deserve to make the grade. Manufacturers seem to be doing an excellent job of making games despite this restriction.

Page 3: Q1.1.f “Free game features will be subject to close regulatory scrutiny. For example: Queensland subjects games with more than 25 free games to greater scrutiny.”

This explains the low number of possible free spins you’ll find on most machines. 15-20 free spins seems fairly common.

Page 7: Q3.1 “Games must operate independently of previous game play outcomes.”

This clause is consistent with slot machine math - it means you can possibly spin up three of the highest possible pays in a row. Or they could be a million spins apart.

Page 8: Q3.15. “Game features that increase the speed of play will not be permitted.”

This makes economic sense for the player - the faster reels on a slot machine spin, the faster you will lose your money.

Page 10: Q3.34. “The time between the start of a play and the end of a play must be at least 3 seconds.

Another clause which limits speed of play. Try timing a slot machine spin next time you’re at a casino in Qld - if its less than three seconds then frown menacingly at the machine to let it know its in breach of the regulations.

Page 17: Q4.1.10. “Depiction of currency on artwork is not permitted.”

There are slot games in Qld which appear to defy this clause. They are older machines, perhaps their existence before the introduction of these standards allows them to continue to exist.

Its time the states and territories had their appendixes out! Uniform standards can’t be that difficult to agree on without adding extras for different jurisdictions. It would mean reduced costs for slot manufacturers, reduced time and cost for approving machines - and hopefully reduced costs for you, the pokies player.

Note: all assessments above are opinions only, and should be treated as such. This blog makes no guarantee that opinions are factually correct.