How skill-based slots, social media and more will shape the casino of the future

By J.D. Morris

Thursday, May 28, 2015 | 2 a.m.

A new future for slot machine-style gambling is taking shape in Nevada, one that should make casino floors feel more like arcades as they attempt to attract younger and more technologically savvy players.

Senate Bill 9, which unanimously passed both chambers of the state Legislature before Gov. Brian Sandoval signed it this month, allows for an element of skill in the traditionally chance-heavy realm of slot technology. It presents an opportunity for the casino industry to make slots more closely resemble the video games that millennials have grown up playing.

But the bill is light on specifics, so regulators and game makers now need to figure out exactly how the skill-based evolution will work.

“The whiteboard of creativity is blank at the moment,” said Marcus Prater, executive director of the Association of Gaming Equipment Manufacturers, the bill’s main advocate. “Once the rules and regulations are written, then the game designers will take over, and that’s who will really make this happen.”

The bill directs regulators to adopt rules that promote “innovative, alternative and advanced technology” in casino equipment. That can include requirements for games of skill, which the bill defines as games in which the ability of a player drives the outcome rather than chance.

The bill also mentions “hybrid” games, in which a combination of chance and a player’s skill govern the outcome.

Prater said the bill lets casinos create an experience that better reflects the variety of games people can play outside casinos.

The key to accomplishing that goal, he said, is through variable payback percentages. Under that concept, skilled players could boost a game’s 88 percent payback to 98 percent if they excel at a bonus round or in a competition against friends, according to Prater’s group.

Don’t expect the advent of skill-based slots to erase the house advantage. Accordingly, Tony Lucas, a professor at UNLV’s hotel college, cautioned against drawing too strong of a comparison between the new technology and actual video games.

“You can get better at a video game than I’m sure they will allow you to get at a skill-based slot machine,” Lucas said.

Nonetheless, the industry is poised for substantial changes because of the possibilities afforded by the bill.

The equipment association tried to demonstrate that in a rendering it commissioned that shows how a casino of the future might appear. Labels on the image point out a “skill zone midway,” slots with a “team play option,” “spin & win group play” and even “holographic slots.”

Eric Meyerhofer, the CEO of Gamblit Gaming, said he’s already heard talk of special areas on casino floors where this kind of alternative gaming technology will be featured. The move isn’t exclusively tied to the passage of SB9, he said, but it’s all part of a general shift toward creating more interactive experiences on casino floors.

“It’s as much about the modern-day, fun arcade experience as it is just a pure gambling experience,” he said.

Meyerhofer’s company makes products that play like video games with a wagering element added. Gamblit wants its games inside Nevada casinos, and though Meyerhofer sees a way to do that under current regulations, he’s also excited about what variable payback percentages make possible.

“An example would be: You’re playing a game like ours and you’re doing well. As you’re moving up the levels into more complicated challenges, the pay tables get better and you can see better jackpots, or more frequent wins or just an overall better return-to-player number,” Meyerhofer said.

But as the equipment association’s rendering makes clear, variable payback isn’t the only idea the industry is kicking around. The bill also mentions integrating social networking technology, which casino consultant Eliot Jacobson said could be very important.

“A lot of these guys want to be able to use their cellphone right at the slot machine to upload their photos to Instagram, or whatever it’s gonna be,” Jacobson said. “That’s already happening, so why not make it seamless?”

Jacobson wrote a column published on the website of casino news service CDC Gaming Reports in which he outlined lessons for gaming companies as the shift toward skill-based slots begins. Those include preventing the learning curve from being too steep and making the new games attractive to a wider audience than just millennials.

Before any of the bill’s ideas can be put in place, however, the regulatory framework needs to be established. The Gaming Control Board will first develop a regulation draft, then receive input via public workshop before sending it to the Nevada Gaming Commission for final approval.

It may not be long before that’s complete: Board chairman A.G. Burnett said he would like to see the regulation passed in three months.

“That would be a very, very time-compressed, hardworking sort of mandate, but I think that when industry and regulators come together on this one — which we will — we can move pretty fast,” Burnett said.

Burnett said he could envision new technology allowed by the bill hitting casino floors by the end of the year.