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The Multi-Billion Dollar Gambling Machines in Illinois
The gaming industry is a big business in the USA, contributing an estimated US$240 billion to the economy each year, while generating $38 billion in tax revenues and supporting 17 million jobs. What people may not realize is that gambling machines in Illinois, video poker machines and other electronic gaming devices make up the bulk of all that economic activity. At casinos, for example, such devices have contributed up to 89% of annual gaming revenue.
An important economic theory holds that when the price of something goes up, demand for it tends to fall. But that depends on price transparency, which exists for most of the day-to-day purchases we make. That is, other than visits to the doctor’s office and possibly the auto mechanic, we know the price of most products and services before we decide to pay for them.
How Gambling Machines Work Differently?
Gambling machines in Illinois may be even worse than the doctor’s office, in that most of us will never know the true price of our wagers. Which means the law of supply and demand breaks down. Casino operators usually think of price in terms of what is known as the average or expected house advantage on each bet placed by players. Basically, it’s the long-term edge that is built into the game. For an individual player, his or her limited interaction with the game will result in a “price” that looks a lot different. For example, consider a game with a 10 percent house advantage – which is fairly typical. This means that over the long run, the game will return 10 percent of all wagers it accepts to the casino that owns it.
The Psychology of Gambling, Betting, and Winning
A player could never know this, however, given he will only be playing for an hour or two, during which he may hope a large payout will make up for his many losses and then some. And at this rate of play it could take years of playing a single slot machine for the casino’s long-term advantage to become evident. This difference in price perspective is rooted in the gap between the short-term view of the players and the long-term view of management.
Specifically, the sum of all the individual losses is used to fund the big jackpots. Therefore, to provide enticing jackpots, many players must lose all of their Tuesday night bankroll. What is less obvious to many is that the long-term experience rarely occurs at the player level. That is, players rarely lose their $80 in a uniform manner; that is, a rate of 10 percent per spin. If this were the typical slot experience, it would be predictably disappointing. But it would make it very easy for a player to identify the price he’s paying in gambling machines in Illinois.