Slot payouts at Pa. casinos dropping
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Are Pennsylvania casinos getting stingier?
It sure looks that way. Average payout percentages from slot machines have been dropping statewide since the debut of table games in July.
In December, casinos paid out an average of 90.24 cents on every dollar wagered, or 90.24 percent, according to the Pennsylvania Gaming Control Board. That's down almost a percentage point from December 2009, when the average payout was 91.07 percent. In December 2007, it was 91.36 percent.
Slots gamblers at Rivers Casino on the North Shore and The Meadows Racetrack and Casino in Washington County know the trend all too well.
Payout percentages at Rivers and The Meadows have been declining since the casinos opened their doors in August 2009 and June 2007, respectively, and plunged more with the start of table games last summer, according to the state's numbers.
Rivers Casino gamblers have seen payouts drop from 91.35 percent in August 2009 to 90.24 percent in December 2010. At The Meadows, average payouts have gone from 91.98 percent in June 2007 to 90.05 percent in December 2010, according to the gaming control board.
Generally speaking, lower payouts mean the casinos are pocketing more of a gambler's money.
But representatives for the southwestern Pennsylvania casinos insist there is nothing nefarious or greedy behind the lower payout percentages and said they have not reprogrammed their slot machines to pay out less.
They and some industry experts attributed the drop to the implementation of table games.
With the advent of live poker and blackjack, casinos removed many of the electronic table games that were classified as slot machines. Those games, which mimicked live poker and blackjack, typically had much higher payout percentages than regular slot machines.
When they were removed, it affected the overall payout percentage for slot machines, said Corey Plummer, Rivers' vice president of gaming. The casino started removing some of the electronic games early in the year, which may be one of the reasons slot payouts have been declining for some time, he said.
"It's mostly related to table games in some form," he said.
Spectrum Gaming Group, an industry consultant, concurs with that view. In the October issue of Mike Pollock's Gaming Industry Observer, Spectrum addressed the issue of lower payouts, saying it believed that removing electronic table games was the "primary factor" in the plunge.
Frank Legato, editor of Global Gaming Business, another industry publication, said the explanation is plausible.
He said he would not be surprised if another factor was a conscious decision by casinos to switch to slot machines with lower payout percentages when replacing games.
Mr. Plummer said Rivers Casino has been adding more penny machines over the last year or so. Those machines are very popular with customers, but they have lower payout percentages than quarter, dollar or other machines with higher denominations, he noted.
Shawn McCloud, director of analysis for Spectrum Gaming, agreed that changing the mix of machines can affect the overall payout percentage.
He said it's not unusual for newer casinos to make adjustments to the mix of slot machines as they learn more about playing habits and seek to meet customer demand for certain types of games.
The Meadows, meanwhile, disputed the gaming board numbers, claiming to have the best payout percentage in the state -- 92.23 percent -- since February.
That's far higher than the 90.44 percent calculated for the casino based on the state's numbers.
Gaming board spokesman Richard McGarvey said the reason for the disparity is that The Meadows counts promotional play in both its wagering and payout totals in making its calculation. All other nine casinos in the state count such play only in wagering totals.
In computing payout percentages, the state subtracts The Meadows' promotional play from the payout total so that its numbers are consistent with those elsewhere. If it did not do so, The Meadows payout percentages, in fact, would be higher than all others in the state, Mr. McGarvey said.
Nonetheless, David La Torre, a Meadows spokesman, said payout percentages don't tell the whole story about a casino's value to its customers.
With free play, harness racing, live concerts and promotional giveaways, "we believe our guests are getting the best entertainment value you will find in the industry," he said.
He added that payout percentages can change by the hour and can be influenced by a number of factors, including big jackpots.
Between February 2010 to December 2010, The Meadows' and Rivers' payout percentages -- at 90.44 percent and 90.53 percent, respectively -- were lower than the state average of 90.6 percent. The state requires casinos to pay out at least 85 percent on average.
By comparison, the average in Atlantic City last year was 91.3 percent. In Las Vegas, it was 92.9 percent.
As a consumer protection measure, Bruce Barron, head of the anti-gambling group, No Dice, said casinos should be required to post recent payout percentages at the door.
"When I buy my cereal, it tells me how many grams of sodium are in it. When I buy ice cream, it tells me how many grams of fat are in it. But I go to a casino and I'm clueless," he said.
First Published February 25, 2011 12:00 am