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Slot machines still star performers at Nevada casinos

Slot play in Nevada’s casinos dropped like a rock when the Great Recession hit.

Revenue from slots fell faster than table games and sportsbooks, leaving uncertainty around whether the machines would ever bounce back to their glory days. But a resurgence of popularity fueled by higher-risk games and a focus on big entertainment has cemented a spot for slots on casino floors.

“Slots are more popular now than they have ever been,” said Joe Kaminkow, a longtime slot game developer and member of the American Gaming Association’s Gaming Hall of Fame.

Slot machines generated $8.5 billion in gaming win across the state in 2007, but by 2010, it had fallen by more than 20 percent to just $6.6 billion. Table games and sports betting fell by a smaller margin, from $4.2 billion to $3.6 billion in the same three-year stretch.

Table game win also bounced back faster, returning to pre-recession levels by 2013, while slot revenues continued to lag behind for years.

“I think where that narrative was coming from was when slot win was slowing, table gaming win was thriving,” UNLV gaming historian David Schwartz said.

Through a longer historical lens, though, slots have proven to be relatively stable for the state and the gaming industry.

Since 2004, slot machines have accounted for between 61 and 68 percent of the state’s total annual gaming win. And according to data from the UNLV Center for Gaming Research, slots have grown more since 1984 and shrunk less in the last decade than table games, Schwartz said.

‘Absolutely went away from casinos’

The one area that saw a definitive move away from slots was the one that made them famous: the Strip.

By 2010, table games at Strip casinos started generating more revenue than slots, a trend that held true until just recently. That shift was partly because of the recession and partly intentional, said Charlie Lombardo, a gaming consultant and a former head of slot operations at Bally’s Las Vegas.

The Strip, Lombardo said, “absolutely went away from casinos” and instead focused their efforts and resources toward conventions and group business travel, fine dining, nightlife and bigger entertainment as the corridor shifted from its history of high-profile casinos to that of a truly international resort destination.

“They would rather sell you a room for $250 and a ticket to one of those shows and a meal at a gourmet (restaurant),” Lombardo said.

All of that helped give rise to the narrative that slots were losing their foothold in the gaming sector and that it would only get worse as the millennial generation reached gambling age.

But outside of the Strip, where locals and California drive-in traffic remain major factors, it has been a very different story. That has been especially evident throughout the COVID-19 pandemic.

Big numbers

From July 1, 2020, to June 30, 2021, slots have accounted for 81 percent of the total gaming win in Clark County outside of the Strip corridor, according to statistics from the Nevada Gaming Control Board.

Across the state, slot play has been on fire in recent months, with June being especially strong after capacity limits and other COVID-19 restrictions were fully lifted.

Slots generated an all-time monthly record of $870 million in gaming win revenue across Nevada in June, a performance that not only outpaced the COVID-19 restriction-heavy June 2020 by 120 percent but even topped the pre-pandemic June 2019 numbers by 36.4 percent.

The previous record that June’s numbers beat? May of 2021, which saw $840 million in slot gaming win.

There is a simple explanation the overall steadiness of slots.

“They’re attractive because you don’t need skill to win,” said Schwartz.

But that simplicity doesn’t mean that slots haven’t had to change to keep up with their players.

Technology in the industry moved at a relatively slow pace through the 1990s. But since the mid-2000s, progress has been made in leaps and bounds.

More and more gamblers are veering toward slots with higher risk and higher reward. Slot cabinets continue to grow in size, some as high as 13 feet tall with massive, 100-plus-inch, ultra-high-definition curved displays, giving players a personal movie theater-esque experience from the casino floor.

“Games have become more volatile, and people feel like when they win, they will win something decent,” Lombardo said. “I think that’s helped refuel some of the games.”

‘An overall experience’

Giving players that entertainment factor has become one of the biggest drivers for game developers, said Scientific Games Chief Product Officer Rich Schneider, a longtime executive in the gaming manufacturer space.

“You are going out to a casino, making a decision as a player to have an experience away from home, away from a computer screen or mobile phone. That physicality and engaging physical appearance of the game ends up being an important part of the emotional experience for the player,” Schneider said.

That has been one of the biggest takeaways the industry has been able to draw from the COVID-19 shutdown, Kamikow said.

“People want to be entertained,” Kaminkow said. “It’s more than just slots. It’s an overall experience.”

The shutdown, Kaminkow added, gave game designers a chance to “catch our breath and think about what we’re going to design in the future.” And the new designs being worked on behind the scenes are something even the 21-year industry veteran calls “breathtaking.”

“It’s going from talkies to 3D,” he said.

Contact Colton Lochhead at clochhead@reviewjournal.com. Follow @ColtonLochhead on Twitter.

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