Innovation (or lack thereof) in casino gambling

Casino floors from Macau to Mississippi look eerily similar. The slot machine seas. The table game islands. The high-limit oases. The restaurants, shows, buffets. The colorful currency. The slot machines. The excruciating check-in lines. Minimum bet forced scarcity. The bleeping beeping slot machines.

The games themselves are for the most part the same that people have played for centuries, with rare exceptions. People flock to the games they already know: blackjack, craps, baccarat. Is this a matter of making gamblers comfortable wherever they go, luring them into a wallet-emptying rhythm? Have casinos evolved to perfection, like sharks? It seems ironic that gamblers who clearly exhibit risky behavior only want to deal with games that are known and familiar. Is there room for innovation in casino gambling? Is this a fat satiated industry resting on its laurels ready for a spark of creativity to ignite a shakeup, or a smart, precisely tuned machine already operating at full throttle in optimized mode, thank you very much?

For example, innovation in slot machine design seems to involve replacing spinning wheels with LCD screens that display in gorgeous 3D detail… spinning wheels. The greatest advance in poker technology has been the hole-card camera, enabling more engaging television coverage.

Outside of the casino, companies like betfair and twinspires are shaking up their respective industries. Why do casinos seem to be standing still?

I’d love to see an experimental marketplace where people play and invent new gambling games, and where breakout winners move on to trials in the “big leagues”. Would it ever fly? Would gamblers bother to play, or are they by and large unimaginative creatures of habit?

P.S. Did I mention that the woblomo deadline is midnight Hawaii time?


time in Hawaii

32 thoughts on “Innovation (or lack thereof) in casino gambling”

  1. Although at times casino players can be creatures of habit (as we all are) the innovation which needs to be sparked has to come from the regulators and the operators.

    Step one: legalize online gambling and let the Brick and Mortar casinos jump into the game.

    Increased revenue as well as new channels to integrate on and offline would be great, plus getting larger software development teams involved will spark the innovation and the players will follow

  2. My guess is that experienced gamblers have learned to be suspicious of new games. I’ve noticed a few times in Las Vegas that there will be casinos “off the strip” that tout that they’re offering new variants of games that seem like they might give better odds to the gambler. You might think the casino would be willing to offer a “loss leader” to lure people in. But after playing for a while, you realize that it’s not better odds, it’s a different game that requires a different strategy. If you don’t have time to study the nuances of the game, you can’t figure out the right way to adapt your strategies.

    The conclusion is that variants of standard games are designed to lure in inexperienced gamblers. Experienced gamblers are better off sticking with the games they know and that have rules and strategies they’ve figured out.

    The other side of the question occurred a few years ago when California legalized a new variant of a table game–Pai Gow or something like it. The hooplah on the signs at the tables was that the gambling commission had approved it. That gave gamblers looking for a new thing to try a signal that the variant would be around for a while, and worth figuring out a strategy for.

  3. Hi Dave -

    The problem is the learning curve. Casinos do occasionally introduce a few tables of a new game to see if it will catch on, but it rarely does. Who wants to spend time learning the rules?

    Some years ago, major LV casinos did add “War” to their offerings, but most people already know how to play this game, so there is no real learning curve. Casinos do also introduce different themed slot machines/video poker from time to time as these also have no learning curve.

    I do agree with Dan above that regulating online gambling will drive *some* innovation.

    Regarding Hibbert’s comment, Pai Gow is a very popular game in Asia (and elsewhere) and it was expected to be very successful in California.

    (I think the system is close to optimized)

  4. Mixed emotions on this “optimized” topic. I think one must consider “the market” by its segments.

    Lets look at casino operations: technological change has involved better computer systems, scheduling systems, ending the scheduling bribery that went on in the old days, better player tracking. If there has been so much change, it certainly was not optimized. One casino recently fired all their poker dealers and went 100 percent electronic. It will probably turn out to be a mistake but it is a change. Simultaneously another casino auditioned four poker dealers who dealt flawlessly and a fifth poker dealer who made two minor mistakes, one major mistake and was somewhat slow in his dealing. The Poker Room Manager hired the fifth guy who made all the mistakes because he was the only one who chatted amiably and actually interacted with the players. So which of these two Poker Rooms is optimized?
    One casino had a slot machine jackpot hit due to a misprogrammed computer and they refused to pay out the jackpot. The recently opened M-casino had a jackpot hit due to a misprogrammed computer and they promptly paid out the excessive amount. Which of these two casinos is more optimized and does not need to evolve further?

    Games? War is a ridiculously high house-edge game. Let It Ride can be considered in a technical sense to have a low house-edge but in order to obtain that low house edge the player must know all the rules and rule variations for a particular casino, so its really a way to advertise a low house edge but offer a high house edge to the casual players.
    Consider Harrah’s targeted customers: those too ignorant to even know what 6:5 blackjack means. Consider all the new “side bets” such as the FireBet in craps or the sidebets in the various poker variant games… its just a lousy bet that siphons off the chips that would otherwise be given to the dealers as tokes. Its similar to the electronic roulette dealers with its ‘toke’ button. Its there but the players rarely use it whereas they would tip live dealers more often. Is this an innovation in labor management relations or an innovation in technology?

    Markets for locals, staycationers and tourists have all blurred, but certain points stand out: innovations in scientific placement and updating of slot machines may indicate change but a player usually should ignore the various graphics and themes of a slot machine as being totally unrelated to winning or losing money.

    It used to be that Vegas had ONE profit center: the casino. Then all these Strip Mega Resorts discovered revenue sources in nightclubs, restaurants, hotel rooms and showrooms. Now Vegas is rediscovering that there is indeed only ONE profit center: the casino!

    Gamblers used to come to Vegas for gambling, now they come for The Vegas Experience. In considering the question of further evolution do you consider solely the casino or do you also embrace the trendy nightclub and its 800 dollar champagne bottles or the swimming pool that sells 45 dollar admission tickets and 400 dollar bottles of booze?

  5. Invent new gambling games???
    Benny Binion revolutionized Vegas by sweeping the peanut shells and sawdust off the floor, laying down a carpet and serving free drinks. He didn’t invent a new gambling game!

    Bugsy Siegal revolutionized Vegas by building a casino out in the middle of nowhere well away from Downtown Vegas.

    Professor Thorpe created a whole herd of would-be card counters and the casinos responded with additional blackjack tables and female dealers, not with technical innovation.

    World War Two created zillions of craps players, the casinos didn’t. So should the industry innovate via new games? Most of their money comes from slots, the worst thing a gambler can play!

  6. I ran into a casino game designer at a game design conference once, and chatted her up because I too am interested in casino game design.

    Her opinion was the games are designed purely from a lowest common denominator point of view. Because there are so many grannies gambling away inheritances in casinos, the games are all designed to be super easy to use, and of course addictive.

  7. @FoolsGold – Different casinos make money differently. They target different market. Slots are the most profitable per sq ft. and this is very important to Harrahs, while Bellagio and Wynn rely on “whales” for most of their money. Other gambling makes up relatively little of their revenues.

    With regard to innovation, I do agree that the most recent changes are additional side/prop bets on regular games. These exploit peoples “longshot bias” and have huge house edges.

  8. >Would gamblers bother to play, or are they by and large unimaginative creatures of habit?

    I don’t know. Daniel’s comment that different casinos cater to different types of players is apt even though the more upscale and whale-oriented Bellagio does have over 2400 slot machines oriented largely towards the unimaginative creatures of habit. Just as a junkie can be more addicted to the needle than he is addicted to the heroin, a gambler may be wired to the novelty of the thrill and may want new and different. Most gamblers would, I think, want to stick with the tried and true. Many gamblers do engage in various tournaments and enjoy advancing to new levels, but I think most gamblers simply want a fair game at which they will try to maintain optimal strategy and see what luck they have. Many high rollers flock to baccarat: narrow house edge, slower play, fairly easy to get comps. High rollers do not seem to flock to slot machines where the odds are against them despite novelty of recently developed slot-machine themes.

    Many players are retired and have no desire to learn the games that offer them the least house edge. Mindlessly pressing buttons on a slot machine is meeting their needs. So why would they embrace some innovations?

    Most casinos are more interested in getting players in the door than they are in giving those who do walk in the door an innovative experience. Consider locals casinos that offer Bingo: it draws in the women and their social security checks but it makes no money for the casino. The money is made during the hourlong intervals between the games when the Bingo players all flock to the nearby slot machines. So why innovate the Bingo room?

  9. As an SEO of gambling websites I would like to say that the gambling industry hasn’t changed much in almost a decade (I was a team leader for one of the best known sportsbooks here in Antigua for 5 years too.)

    What the companies have tried to do is to speed up their websites and games as the main complaint with bettors in the past was how slow the games/systems were.

    Blackjack will always be blackjack 9though multihand / multiplayer games were introduced some years ago but the industry is concentrating more on speed and ease of play rather than types of games (which invariably do not appeal to bettors)

  10. Thanks everyone for very insightful comments.

    I wanted to respond to a general theme of most of the comments, captured by these examples:

    Daniel: “Who wants to spend time learning the rules?”

    alex: “there are so many grannies gambling away inheritances in casinos, the games are all designed to be super easy to use”

    FoolsGold: “Mindlessly pressing buttons on a slot machine is meeting their needs.”

    Simon: “the gambling industry hasn’t changed much in almost a decade”

    I guess the point of my post is to challenge the industry to look beyond their current customer base: is there room in a casino for math nerds and computer geeks who savor a puzzle and a challenge? Who would love to learn new rules, try new things, and outsmart others. More Silicon Valley, less West Palm Beach.

    Beyond casinos, there are innovators in the online industry, including BetFair and TwinSpires, but they seem the exception rather than the rule.

  11. I would be in favor of some innovation from time to time but just as some casinos focus on players who are termed whales and some casinos would be happy to welcome panhandlers who’ve just reached their 20.00 dollar take there are some casinos that are “sweat the money” joints and some that adopt a more relaxed and tolerant attitude.
    The casinos tend to fear nerdy Silicon Valley types IF they are likely to win. Recall perhaps that one of the original driving forces behind Microsoft Word once hit two jackpots in a weekend and was barred from all Harrah’s casinos even though he had been playing video poker machines. Casinos welcome Silicon Valley types only if they are likely to lose.
    Innovation in game design is the subject of a good many seminars, but I don’t think the casinos are really embracing game design innovation because the industry’s focus remains on those who are mindlessly pressing that big red Spin button even though the players dont even know how a slot machine works and don’t particularly care.

  12. “I guess the point of my post is to challenge the industry to look beyond their current customer base: is there room in a casino for math nerds and computer geeks who savor a puzzle and a challenge? Who would love to learn new rules, try new things, and outsmart others. More Silicon Valley, less West Palm Beach.”

    No, there is actually no room for them. In their place there could be a slot machine. Most of these types gravitate towards poker, which is not much of a money maker for the casinos.

    There may be room for more player vs player strategy games in the future, but even with poker we see that the game must be kept very simple. I’m guessing 99% of poker players only play and understand no limit holdem, as other poker games are more complex. So, the theme is still the same, keep things simple so people can spend their time playing. The more complex the game the better/smarter the players it is likely to attract?

  13. Hi again
    I guess that the reason the online gambling industry has not changed much in a decade is also the old adage, if it ain’t broke don’t fix it.

    I worked for an online firm (that will remain nameless)- they tried to new ideas that spring to mind -

    moolette – They had a cow in a field. The field had numbered parts and had a webcam (so that you could watch) The idea of this was that you bet on which number the cow would do its business.

    mah jong – this was a multiplayer online version (about 6 years ago)

    both games were equally disastrous and cost a LOT of money to develop….

  14. I don’t see how developing Moolette could burn through that much money but then again I don’t see how any casino owner ever thought that game would be accepted.

    Its bad enough to drive back from Vegas and admit you dropped your money on a mindless one-armed bandit but can you imagine telling your friends and co-workers you lost your money betting on where a cow would make its deposit? The main failure in the game would be timing anyway.

    Innovation? I wonder if an online gambling site could innovate with thorough audit trails? When a young kid from Australia puts a poker tournament’s results through a simple program and proves fraud, there might be a market for an online casino that is shown to be legit. Innovation in gambling? Look at the dismal performance (and all the lawsuits) for IntraLot.

  15. “There may be room for more player vs player strategy games in the future”

    Yes, this is what I mean. I’m not suggesting that casinos run games where they risk losing large sums of money if players are too smart. I’m suggesting games where players compete with each other to see who is smarter. Or single-player games that are imaginative and challenging, but aren’t necessarily “beatable”.

    “No, there is actually no room for [innovative games]. In their place there could be a slot machine.”

    “even with poker we see that the game must be kept very simple”

    “if it ain’t broke don’t fix it”

    If commenters are right, it’s a sad commentary on gamblers and the gambling industry.

  16. Players competing with other players to see who is smarter or more skillful sounds like a casino’s Poker Room.
    There are always arguments about how much a poker room actually makes for a casino but the one salient point is always that in a poker room money is lost to other players rather than being lost to the casino. That is a casino manager’s main objection to skilled players competing with each other.
    You can go all the way back to bars that installed Pong and PacMan… games of skill were fine because such games brought quarters and beautiful young women into the bars which ofcourse meant men came and spent money there.

    The games of skill that you suggest won’t bring winnings to the casino but it will bring contestants to the casino. Unfortunately, thats probably not enough incentive for the casinos to innovate by hosting such skilled competions unless it can be shown that such contestants bring unusually high amounts of money with them.

    Its back to the Bingo Room analogy. Bingo doesn’t bring in any money, it brings in retired women who play the slot machines in between bingo games. That is where the money is made by the casino!
    What you are proposing is that the casinos innovate by bringing in some really sharp and competive minds so that those intelligent players can compete in games of skill. Well, if you want such innovation you would have to prove to the casino just how much money they would make during the breaks when the skillful players wander over to the slot machines. Bingo brings in social security checks. Silicon Valley Geek Competitions would bring in wealthier individuals but the casinos won’t have innovative Geek Competions until they see that the Geeks will bring money with them and leave it in the casino rather than the Geek Competion room.

  17. Profitable innovations in gambling have involved: casino expansion, parking lots, hotels, promotional gimmicks, etc.

    Consider the supplying paper and pencils to players at roulette whee. That was in innovation way back then, but hardly a major advance in technology. The shift from paper to an electronic annunciator is an innovative technological change but its just as mathematically meaningless to automatically display the last numbers as it is to write them down. That little ball bouncing around is not going to seek out ‘red’ because it is due. The use of a simple-technology annunciator board made money for the casino. The people who got rich designing computer chips used in the innards of such annunciator boards are probably too smart to think that such annunciator boards are effective. Geeks from Silicon Valley might be a good “customer niche” for a casino to seek out, but the money the casino makes won’t come from the game the geeks play against each other. The casino’s money will come from the geeks when they take a break to play a slot machine.

  18. >it’s a sad commentary on gamblers and the gambling industry.
    Precisely.
    Perhaps its because the same games and same devices that have been around for centuries fully meets the needs of the players and no further evolution is needed. Sure you could attempt to innovate by introducing a dodecahedron as a replacement for a six-faceted die but what would be gained? A six sided die has survived for eons. It ain’t broke and so is not in need of fixing.
    Its the players who are in need of a “fix”.

    Consider the woman who recently inquired about the existence of Keno Runners in the Buffet Room during breakfast. She is a sophisticated gambler. She knows Keno has a humungous house-edge, she knows that 20 out of 20 has not struck in ANY Keno parlor in ALL of Nevada for all of recorded history. She merely wants to have some “action” while she is eating breakfast.
    Which is going to be more profitable for the casino: to meet her needs for action or to establish some innovative Silicon Valley Geek Contest of the Minds?

    The casino is better off providing the same old games in the same old fashion.

    Sad commentary on the industry and the players? Yes. Very sad. The casino owner will cry about it all during his trip to the bank to deposit his take.

  19. Hello,
    This is a good point and I agree that this is true for the most part. On the other hand, gambling games evolve over time and are not static. Just to take the example of poker, its roots are said to come from the Iranian game As Nas 100′s of years ago. More recently Omaha Pokwe appeared only a few decades ago. Texas Holdem 100 years ago. Check Steve McQueen in “The Cincinnati Kid” (1965). They played 5-cards Stud, and this variation of poker has almost completely disappeared.

  20. In Post number 4, I briefly discussed the innovations made in a casino’s poker room. I just want to add a brief note here to indicate that the “all-electronic” poker room at Excalibur will disappear shortly and the casino will return to the use of human dealers.

  21. I agree with you that there is certainly a lack of inovation within the casino industry.

    However, I also wonder if that is in fact, no coincidence. What I mean is, isn’t there a reason for the specific placement of the slot machines in every casino?

    Isn’t there also a specific reason for all the color schemes in casios as well…not to mention the abundunce of alcoholic bevarages.

  22. Totally agree with you. It is a very profitable industry and so business man tend to slack. This is particular the case in my country – portugal – where specific and few groups have exclusive license – therefore they tend to worry more in elimiantenewcomers then to create a better experience for customers. Now, in online gaming industry is tuff – so will seemuch more creativity – like no deposit casinos and so on…

  23. Legalizing table games like poker and blackjack would create 10,000 jobs at slots casinos in Pennsylvania, according to a study.

    According to New Jersey’s Innovation Group, legalizing table games in Pennsylvania would create casino jobs as well as support jobs in the construction and service industries.

    The State House Gaming Oversight Committee will hold a meeting this week to review the study.

  24. Just to substantiate my previous comment:
    8 September 2009 – Bwin Interactive Entertainment AG, an online bookmaker, lost a challenge to Portugal’s sports- betting monopoly after a European Union court said gambling restrictions are legal as long as they target fraud and crime.

    Bear in mind, the Santa Casa da Misericórdia de Lisboa, a centuries-old “non-profit-making organisation” operating under the strict control of the Portuguese Government, only has exclusive right to organise and operate lotteries, lotto games and sporting bets via the internet – and not all type of online gambling as I have seen suggested in the media.

  25. There may be room for more player vs player strategy games in the future, but even with poker we see that the game must be kept very simple. I’m guessing 99% of poker players only play and understand no limit holdem, as other poker games are more complex. So, the theme is still the same, keep things simple so people can spend their time playing.

  26. Combine the casinos’ apathy with recent talk of legislation that could mean no US financial institutions can process money made from online gambling and the future of online poker and gambling sites is going to move overseas – more than it already is. A lot of businesses, as well as the US government, will surely be missing out on a lot of revenue.

  27. In Australia there are a lot of innovative companies providing very creative slot machines and table machines. I’m not sure how it is in the USA but I’d like to go to try one day.

  28. As a former employer in the gambling industry, I could say that “innovation” doesn’t necessary means success.
    For instance the “old school” slot machines, are still more popular than new and fancy ones.

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