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'Highly Deceptive' Slot Machines Filling Gov't Coffers

'Programmed on purpose to throw you off': expert.

By Andrew MacLeod 4 Mar 2008 | TheTyee.ca

Andrew MacLeod is The Tyee's Legislative Bureau chief in Victoria. You can reach him here.

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'Like stacked deck of cards'

Slot machines suck in a lot more cash for the provincial government than bingo ever did, largely because they mislead players, said an expert on electronic gambling machines.

"The problem with these games is we're discovering they're highly deceptive," said Roger Horbay. Based in Ontario, Horbay has a background in treating addictions and specializes in problem gambling. He is the president of Game Planit, a company that educates people on how a slot machine works.

"It's programmed on purpose to throw you off," he said.

In British Columbia, the province has been converting bingo halls into mini casinos called "community gaming centres" complete with slot machines. The 11th opened in Courtenay last week with 75 slots, another is scheduled to open with 79 in Prince George, and three more have the local approvals they need to make the conversion.

The B.C. Lottery Corporation forecasts it will make $115.7 million from community gaming centres this year. That's up from $53.7 million two years ago, and less than half the $249.8 million it predicts for two years from now.

Deceptive machines

Slot machines are very deceptive compared to bingo, Horbay said. Bingo balls come out in a random order, he said, and anyone can observe that. "It's pretty transparent. When you're playing bingo, you're not under any deceptions about how the game works."

The electronic gaming machines used throughout North America, however, work in ways that make it hard for the player to understand what is going on.

Like other jurisdictions, B.C. uses animated slot machines, which would be called video lottery terminals elsewhere, that have the appearance of traditional mechanical reels. Most people don't realize the reels are weighted, said Horbay, so that the winning symbols come up much less frequently than losing ones.

A needed symbol, for instance, will appear 12 times above or below the winning position for every time it comes up where the player needs it to win, he said.

On his website he dissects a set of reels, showing that the number of blank spaces far exceeds the number of cherries or other symbols. In some cases, he said, the odds will be even worse, with as few as just one of the winning symbols on a reel.

Nor are players told how many times a winning symbol is on each reel. "They're unbalanced," he said. "The players don't know this . . . . All these distortion techniques don't allow for informed choice."

Even table games are fairer than the slots, he said. Governments prohibit casinos using a stacked deck of cards or weighted dice, he said. And yet slot machines, he said, are allowed to be programmed in ways that give players an unfair impression of how close they are coming to winning.

"These virtual reels are like stacked decks of cards," he said. "You're not showing the player the game they're actually playing. That's the problem."

Technical standards

Gambling in B.C. is managed by the crown corporation BCLC and overseen by the Ministry for Public Safety and Solicitor General. Solicitor General John Les was unavailable for an interview. The BCLC did not have anyone available for an interview either, though a spokesperson provided background information.

B.C. has a set of technical standards that govern gambling in the province, including a 36-page policy on electronic gambling devices. Machines are independently tested and have to have a "certificate of gaming integrity" from the solicitor general's ministry, a spokesperson for the BCLC said in an e-mail.

The standards include a "no near miss" clause that says once it has been determined a player will lose, the machine shouldn't change the result it shows the player.

"The game shall not substitute a particular type of loss to show the player," the standard says. "This would eliminate the possibility of simulating a 'near miss' scenario where the odds of the top award symbol landing on the payline are limited but frequently appear above or below the payline."

However, the clause fails to eliminate "near misses," said Horbay. There's no need to substitute a close losing combination, he said, because the reels are designed so that the first combination that comes up often appears to be close to a winner. As long as the "near miss" is arrived at by random, he said, the regulations allow it.

"They don't need that secondary decision because they've already programmed it to be weighted," he said. "You're giving the player a near miss effect more often than is statistically possible given the reels."

Subliminal winners

A CBC investigation last year found some machines made by Konami appeared to flash subliminal messages at players for a fifth of a second: "Long enough for the brain to detect even if the players are not aware of the message."

Ontario pulled 87 machines out of service following the investigation, the CBC reported.

After the February 2007, story, B.C. regulators found there were nine of the same machines in use in the province. They were immediately disabled, a spokesperson for the BCLC said in an e-mail. However, the gaming policy and enforcement branch of the Ministry of Public Safety and Solicitor General "reviewed the integrity of the slot machines and found no integrity issues."

Still, BCLC stopped using the machines within a month. "As part of its regular business operations," the e-mail said, "BCLC phased out a number of slot machines with older technology to make room for new technology." The ones that went included the Konami machines.

'Regulatory scandal' alleged

Many players realize intuitively they don't win as often as they should, Horbay said. They know something is wrong, but they blame their failure to win on bad luck, not realizing the machines are stacked unfairly against them.

"The public's not aware of any of this. The public thinks because it's government sanctioned it's all fine and dandy. If people knew, they'd get very angry."

Profits from slot machines, and government revenues from them, are directly related to deception, he said. "The more they can create the illusion in the player that the odds are good, the more money they make."

Governments may be reluctant to hurt their own bottom lines by cleaning up the industry, he added, but if they don't they'll find themselves on the losing end in court. "You can legalize gambling, and even slot machines, but you can't legalize fraud."

More lawsuits coming?

In Newfoundland there's already a class action suit underway. Horbay said there will soon be similar suits in Ontario, with British Columbia and other provinces to follow.

"I would predict the next lawsuit starts in B.C.," he said. The province's consumer protection act puts the burden of proof on a supplier to prove an action wasn't deceptive. "Your act seems to be even more favourable. It's just a matter of time."

It will take somebody pushing the issue, he said, to clean up the industry. "The real scandal is the regulators know about this," he said. "This is a huge regulatory scandal . . . Everybody passes the buck. It's somebody else's problem. I think this is a massive regulatory failure."

The BCLC and the government came through a scandal last year that might hold some lessons. BCLC president and CEO Vic Poleschuk lost his job after it was found he didn't act quickly enough to investigate whether lottery ticket vendors were winning more often than is statistically likely.

In that case it took news stories and a report by ombudsman Kim Carter to get the BCLC and the government to take the issue seriously. Said Horbay, "Maybe they'll learn to be proactive this time."

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