Rise of the machines (part B)

This article first appeared in the Mar/Apr 2013 issue of World Gaming magazine.

Last issue’s cover feature “Rise of the Machines part A” traced the history of electronic gaming from its earliest beginnings of candy vending machines and the famous Liberty Bell slot of the late 19th century right through to the amazing high tech devices of today with their incredible free game features, special second screens, linked jackpots and state-of-the-art animation. In part B we begin to turn our attention specifically to the Asian and Macau electronic gaming market.

The rise of slots in Macau

The last year of Dr Stanley Ho’s monopoly operations for Macau gaming was 2003. That year saw a mere 814 slot machines operating in the entire city, generally of the old electromechanical three-reeled stepper style.

SHFL Entertainment’s Executive Vice President (Asia), Mr Ken Jolly, recalls the era:

The machines in Macau prior to 2003 were generally sourced from the US or European markets and were not overly utilized. Around 2004 the advent of slot halls such as Mocha and the SJM facilities saw video slots begin to enter the Macau market. In many cases these video slots were sourced from Australian suppliers. The new machines quickly gained popularity, particularly with the Hong Kong and local Macau markets.

When Sands Macau opened, it brought a further 405 machines with it, kicking 2004 off as the year that started a slot boom which was to last a decade. Since 2003, the number of slot machines has surged more than 20-fold to 16,585 at the end of last year, as shown below.

Macau Slot Machines and Revenue

Of the 32 operational casinos in Macau today, all but four of them have slot machines, and there are a further nine slot lounges outside the casinos. While slots constitute well over 50 percent of gaming revenue in the US, they still only represent a relatively small amount of the Macau gaming market. However, that small percentage has grown from 1 percent of the industry in 2002, to 4.5 percent in 2012. While 4.5 percent doesn’t sound like much, last year it amounted to some HK$12.9 billion! Slots are now clearly the number two form of gaming in Macau after baccarat.

A major leap forward in the development of the Macau slot market was the introduction of the iconic Fa Fa Fa linked jackpot. This linked jackpot is responsible for the largest amount ever won on a slot machine in Macau – HK$21 million. A lucky player won this enormous sum on Friday February 10 last year at around 1:30pm at Sands Macau. To read more about this win visit www.wgm8.com and type “Biggest ever slot jackpot” (with the quotes) in the search box.

Slots 101: how to play a slot machine

While slot machines have been omnipresent in western casinos for decades, their rise is a relatively new phenomenon in Asia. In fact, many players visiting Macau today have simply never played a slot machine. Years ago the machines were referred to as “one arm bandits” as you had to pull a big lever (or “arm”) that activated the mechanical reels. You also had to purchase coins (usually given to you in a cup or even in bank coin rolls) that you had to manually feed into a slot in the machine. Times have changed and manufacturers have made playing a much easier experience. Here are the basics you need to know when playing an electronic gaming machine:

• Choose a machine: some players have superstitions on which machines to choose and the placement of machines. Some players love certain games, and hate others. It’s all a matter of personal preference, but make sure you select a machine with a volatility level you are comfortable with.
• Feed your machine: all modern machines have note acceptors, the days of coins are long gone. Your credits will automatically be displayed as units of the machine’s denomination. If you’ve chosen a 20 cent denomination machine, $1.00 will be displayed as 5 credits.
• Decide your bet: select how may lines you want to play and how many credits on each line. The lines dictate how many combinations you are playing and the credits multiply the winning amount. Choose everything using the buttons on the machine.
• Double up? Many machines offer a 50-50 double up feature where you can gamble credits you win. The most common is a selection of a red or black card that pays at even money. Not many players in Macau play this double up feature.
• Check the payouts? One difference between table games and slots is that the machine will record your wins and losses automatically. The state-of-the-art technology means malfunctions or mistakes are so rare they can be safely ignored.
• Collect your winnings: most machines these days have ticket-in-ticket-out technology. When you want to leave the machine simply press the “collect” button. The machine will give you a printed out ticket that can be used on other machines or redeemed for cash.

The differences between playing table games and slots

Historically, gaming forms an important element of social activity in Chinese culture. Most Chinese have fond childhood memories of playing gambling games with their parents and other relatives at Chinese New Year and other important social occasions such as weddings. Later in life, communal gaming can build camaraderie and can also be a great business networking or guan xi opportunity.

Slots are different. Traditionally, playing slots has been a solitary affair – where the player retreats into their private world to escape from day-to-day concerns for a few hours. Some players like it this way – they keep their gaming to themselves and view it as private “me time”. This suits new players, who may feel intimidated playing table games with others. At a table, there can be a fear of doing the “wrong thing” as far as the other players are concerned.

In recent years we’ve noticed a convergence between table games and machines. A great example of this is the fantastically successful LT Game live dealer machines. These machines, often referred to as “hybrids”, see players placing bets on electronic terminals, while real dealers using real cards on real green felt covered tables determine the results. This combines the privacy of a slot machine with the trustworthiness and “real feel” of a live dealer. By having just two or three dealers dealing to potentially hundreds of players at once, the casinos can offer much lower limits, which is fantastic for new players.

Another example of convergence is the emergence of purely electronic e-table games. Games such as baccarat, blackjack, sic bo and roulette, which are traditionally thought of as table games, are played with virtual dealers – or even no dealer! This breaks the traditional solitary nature of electronic gaming, since players all bet on a communal outcome – so these e-games often feature the camaraderie and social interaction of table games.

At the end of the day it is horses for courses, some players want the “live feel” and social interaction of table games, while others prefer the solitary nature of traditional slot machines.

How Macau slot players differ to players outside Macau

Recent research on the Macau market has revealed that Macau’s slot players are significantly younger than those in western countries. In fact 66 percent of Macau’s slot players are under 44 – and around a third of all Macau slot players are women.

Despite opinions to the contrary, research also shows Hong Kong and mainland Chinese slot players are similar in the machine characteristics they prefer and their styles of game play.

Another area of difference is the distinct Macau market for high stakes slot players. Most players in other countries prefer to stick to low and medium stakes, and like to play stable, less volatile games. But the Macau high stakes slot players actually seek higher volatility in their games – preferring to take their chances of a big loss in order to have the possibility of winning a huge windfall.

Macau players also love games where they have an immediate and intuitive understanding of the game. Quickly understanding how to play is critical to player enjoyment, and Macau players don’t want to work hard to understand a new game.

Part C coming next issue

In the next issue of WGM, we’ll continue with part C of our “Rise of the Machines” series, which will include:

• More of the history of slots in Macau
• Macau’s most popular electronic games
• Where to find the biggest jackpots and the best games
• Features to expect from the machines of the future
• The rise of hybrids and stadium style games

Be sure to pick up the May/Jun issue of WGM to learn about all of the above, and more!

Who’s who in the zoo?