Nevada Governor Brian Sandoval Signs Skill-Based Slot Machine Bill into Law
Nevada Governor Brian Sandoval signed Senate Bill 9 this past Thursday, giving his approval to skill-based gaming in the state. For the first time in the United States, a jurisdiction is set to allow skill games inside casinos.
The bill should change how slot machines are played. Slots are a huge part of the American casino gambling industry. In some casinos, revenues from slots row making up as much as 70% of the business’s revenue stream. But national trends have shown interest in slot machine gaming appears to be waning. Analysts point to gaming preferences among the younger generation, who grew up gaming on video game consoles. These people would prefer more skill in their casino gaming experience, it would seem.
Slot Machines: Pure Luck
Slot machines are seen by most gamblers as the ultimate exercise in luck. Despite what unscrupulous writers might tell you about zig zag methods and Martingale betting techniques, no strategy or money management system exists which changes the house edge of traditional slot machines. In effect, you either get lucky and win or you pay in to the house edge. Slots are easy to play, because they require no strategy. They produce quick results, offering big prizes, and entertain with flashing lights and music, but they also have a high house edge and no way of changing that fact. For that reason, slots are called the one-armed bandits (due to the fact they had a lever you pulled in the old days).
Senate Bill 9 would help change the dynamics. Under the SB9, slot machine designers could develop games which have a skill element, perhaps in the main game or perhaps in the bonus game mode. Skill gaming would make the slots experience on certain gaming machines more like what one experienced in the old video game arcades of the 1980s, or 21st-century arcade-style entertainment and food chains like Dave & Buster’s or Main Event these days. If you have better skill or quicker reflexes, you win more.
Sandoval’s Press Release
Gov. Sandoval released a statement when he signed SB9 into law last Thursday. Sandoval’s statement read, “In order for our state to sustain its edge in an increasingly competitive gaming industry, we must continue to expand, evolve, and embrace the potentials found in the 21st century. This bill allows gaming manufacturers to use cutting-edge technology to meet the challenges prompted by a younger, more technologically engaged visitor demographic.”
Sandoval’s statement might sound like the typical hyperbole one expects from a politician, but a number of industry insiders believe Senate Bill 9 is a revolutionary new law. The bill is likely to change how gaming machines are designed and how EGMs are played.
Marcus Prater Speaks
Marcus Prater, Association of Gaming Equipment Manufacturers (AGEM), gave a statement after the bill was passed in both houses of the Nevada legislature.
Mr. Prater said, “I believe we will look back on the passage of SB9 as a monumental moment for the gaming industry and its overall evolution. The slot floor will not transform overnight, but this will allow our industry to capitalize on radical new gaming concepts and technologies and give AGEM members the ability to unleash a new level of creativity for their casino customers.”
AGA Supports the Bill
Most of the gaming industry’s leading trade organizations are behind the legislation. The AGA has supported the bill from the beginning and was quick to give commendation to the lawmakers who produced the bill, as well as Governor Sandoval.
American Gaming Association President Geoff Freeman said, “We applaud Nevada’s leadership on this bill that will allow for innovation among gaming equipment manufacturers and suppliers and help gaming reach a key customer demographic.”
The House Edge on Skill Games
No one is certain as yet what skill gaming will look like. Opinions rendered by gaming experts vary wildly on how impactful skill games are likely to be. Most agree that skill gaming’s scope and impact is likely to be a matter of how innovative the game designers plan to be.
AGEM’s leaders have speculated on what skill games are likely to look like, at least in the first generation of game designed. One AGEM theory is that a skilled-based slot machine might have a base return-to-player of 88%, but include an expected return as high as 98% for the players with the top skill at the game. If the house edge on a slot machine was potentially 2%, that should draw a lot of game enthusiasts to the casino, because it starts to get into the realm of the break-even possibilities, with comps added in (though these might be altered from standard slots club comps).
How Skill Gaming Works
It is still a matter of speculation how skill gaming will be implemented. Much of the speculation has centered around skill elements in the bonus games. This seems like a natural process, because the regular game mode would play like traditional slots, but the bonus game would allow for more entertaining options than exist right now. Many interactive bonus games at the moment look like video games, but only allow crude luck-based decisions. It would be natural to offer better, more truly interactive bonus game experiences.
Another theory is the bonus games will pit players against one another in competitions, such as racing games. This could be done with the linked or networked slot machines, which often link dozens of gaming machines from multiple casinos and sometimes over wide areas. Linked skill games with one winner would allow the games to be profitable for the casino, but allow skillful players to also be profitable.
When Will Skill Games Launch in Vegas Casinos?
No time table for the launch of skill games has been set, but during the run-up to the Nevada legislature votes, it was speculated such games likely could be designed, manufactured, and placed in casinos about 6 months after passage of a law. Thus, one might be able to see skill-based slot machines by the end of 2015, or early 2016 by the latest.
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