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Impacts of increased house advantages on reel slots

Impacts of increased house advantages on reel slots This study aims to examine how differences in the casino advantage (i.e. price) of otherwise identical slot machines affect their revenue production, when the price is hidden from the players. The study aims to identify the ability of players to recognize differences in the concealed prices of paired machines, over time. Both items are paramount to slot revenue optimization.Design/methodology/approachUsing 274 daily observations, paired-samples t-tests examined whether live performance metrics were affected by the differences in the casino advantage (namely, par) of the paired games. Time-series regression analyses were conducted to understand whether players shifted their play away from the high-par games, over time.FindingsThe results indicated that increased casino advantages produced increased revenue, with no evidence of diminished play on the high-par games.Practical implicationsThe results contradicted the inveterate wisdom of the industry by demonstrating that players are not hypersensitive to increased prices/pars, and that such increases can actually lead to increased revenue, despite egregious par gaps.Originality/valueAdded valuable results to a nascent research stream aimed at understanding the effects of obfuscated price/pars. Expanded the gaming literature by increasing the differences in the prices/pars of paired game titles over an increased sample period. Both conditions increased the chances of observing changes in revenue performance, and play migration to the low-par game. Both manipulations have been previously cited as meaningful extensions of the literature. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png International Journal of Contemporary Hospitality Management Emerald Publishing

Impacts of increased house advantages on reel slots

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Publisher
Emerald Publishing
Copyright
© Emerald Publishing Limited
ISSN
0959-6119
DOI
10.1108/ijchm-07-2018-0577
Publisher site
See Article on Publisher Site

Abstract

This study aims to examine how differences in the casino advantage (i.e. price) of otherwise identical slot machines affect their revenue production, when the price is hidden from the players. The study aims to identify the ability of players to recognize differences in the concealed prices of paired machines, over time. Both items are paramount to slot revenue optimization.Design/methodology/approachUsing 274 daily observations, paired-samples t-tests examined whether live performance metrics were affected by the differences in the casino advantage (namely, par) of the paired games. Time-series regression analyses were conducted to understand whether players shifted their play away from the high-par games, over time.FindingsThe results indicated that increased casino advantages produced increased revenue, with no evidence of diminished play on the high-par games.Practical implicationsThe results contradicted the inveterate wisdom of the industry by demonstrating that players are not hypersensitive to increased prices/pars, and that such increases can actually lead to increased revenue, despite egregious par gaps.Originality/valueAdded valuable results to a nascent research stream aimed at understanding the effects of obfuscated price/pars. Expanded the gaming literature by increasing the differences in the prices/pars of paired game titles over an increased sample period. Both conditions increased the chances of observing changes in revenue performance, and play migration to the low-par game. Both manipulations have been previously cited as meaningful extensions of the literature.

Journal

International Journal of Contemporary Hospitality ManagementEmerald Publishing

Published: Sep 4, 2019

Keywords: Pricing; Casino management; Casino marketing; Operations analysis; Revenue optimization; Slot machines

References