Talk About Being Nickel-and-Dimed!
The O Pine

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© 2001 Brian F. Schreurs
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If a bunch of college students are in a field, cramming for a test, does that make it a concentration camp?
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Recently, my wife and I visited Las Vegas for the first time. You know the city: middle of a desert, big crack in the ground nearby, many species of lizard and snake, haven for formerly-important entertainers, and -- oh yeah -- a little bit of gambling.

Slot machines greet you at the airport terminal when you step off the airplane, and they never really go away after that. All up and down the Strip, buildings contain fascinating architecture illuminated by blinking slot machine lights. Maybe when you think of gambling, you think of roulette, or poker, or craps -- well, the casinos have that too, but what they really like are lots and lots and lots of slots.

This is because it's easy money. They set these machines out there, and gamblers just dunk their coins in. The only employees they need are a few people to empty (or, more rarely, refill) the machines. Cheap. Easy. Profitable.

We saw slot machines that ranged from a nickel a play (our favorite, because we passed math class) to $100 a play. Any more, you don't even have to pull a lever; just put in your money and push a button. The machine takes care of the rest for you. Just wait for the sign that you lost.

As I watched younger sister Erin go through a bucket of nickels veeeeery sloooooowly, it occurred to me that she was getting a lot more play than she initially paid for. Eventually, of course, the house wins and the bucket is empty, but it took a lot longer than I expected. So I played $5 in a nickel slot machine, which gave me 100 initial credits. Here's how it went:

As you can see, I lost.

The play went something like this. I put in $5, for 100 credits. I started by betting one credit at a time. I met some initial success, so my credits increased, peaking at 128 ($6.40) on several occasions. Didn't do any good though. After 92 bets, I was back where I started. Still, I'd had $4.60 worth of gaming that I didn't pay for; not bad.

I kept going, but pushing the little buttons like a Pavlovian gambler was getting a little boring, so I upped the per-spin bet to the machine's maximum of three credits. This time it took 79 bets before I was flat broke, but I played through $11.75 to do it. All told, my $5 purchase got me $16.35 worth of slot-machine gambling; a good deal if you're playing for fun and not for retirement money.

Though my net loss was $5, overall I lost that $16.35, of which $11.35 was winnings during the course of play. The value of the winnings was only 69% of the losings. To put it another way, on any given play I only had a 22% chance of winning anything -- or 1 in 4.6.

Breaking it down further than that is taking chances with an inadequate sample size, but what the heck -- it's interesting stuff anyway. Keep in mind that my sample is not really large enough to regard the following numbers as particularly accurate; they're just good reading.

While I were betting one credit, overall I had odds of 1 in 4 for winning something. Specifically winning even money was 1 in 8; winning five credits was 1 in 10; winning 10 or 25 credits was 1 in 92, each.

When I switched to betting three credits, overall I had odds of 1 in 7 for winning something. Specifically winning even money was 1 in 16 and winning triple was 1 in 11. Yes, I won triple more often than I won even money. Like I said about the sample size...

At a quick glance it might look like this suggests to play the low-bet, because your odds are better and the payout multiple is higher. But let's not forget the big picture; the overall odds are still bad and you're going to lose your money anyway. If you're not playing for fun, then you'd be better off not playing. So if you are playing, you might as well play it however you enjoy it!

And, yes, I know I'm a dork for analyzing the nickel slots. But you took the time to read about it!