by John Branston
ississippi might
want to think about replacing that magnolia blossom in its state marketing
with something more relevant. Say, a slot machine.
Five years after legalization of casino gambling, a picture is emerging of which markets in Mississippi are growing and which ones are becoming a "grind" or entering a downward spiral.
One of the beauties of regulated industries is that they have to release interesting and useful information to the public. Monthly reports from the Mississippi Gaming Commission over the past three years paint a picture of the overall growth of casino gambling in the Magnolia State. They also indicate the playing habits of players in different jurisdictions, and which games are most lucrative for both players and casinos.
The reports back up the boast that Mississippi is the hard-charging third largest casino center in the country. But the picture is not uniformly rosy. Individual casinos are struggling in all three jurisdictions (Gulf Coast, North River, and South River), and the Vicksburg, Greenville, and Natchez markets are showing some disturbing signs. In general, slots are king, and nickel slots, which appeal to small-timers, are enjoying the greatest increase in play.
The reports are at odds with advertising claims and gamblers' mythology that slot payback exceeds 98 percent -- that's true of only a select number of machines measured a certain way. But they also suggest that competition is in fact forcing casinos to give customers a better shake on both slots and certain table games. Fear not, however, for the casino industry's profits. Go-for-broke players provide eye-popping returns for the house on such games as roulette, poker, and craps. And payback on some slots is as low as 89 percent.
All casino games can be fine tuned -- legally -- to increase or decrease or the player's chances of winning. And players, of course, can impact the results by both their skill level and their responsiveness to casino marketing, adjustments of paybacks and rules, and perks like free meals and rooms. In short, casinos business is as fluid as the business of grocery stores, restaurants, and department stores.
Here, based on Gaming Commission monthly reports, are Things You May Have Wondered About, and answers, about the Mississippi casino business.
Overall, is the Mississippi casino market growing?
Yes, but not nearly as dramatically as it did between 1992 and 1995. Gross revenue to the Mississippi State Tax Commission was $177 million in March 1997, compared to $174 million in March 1996, and $143 million in March 1995.
Tunica County has taken in a staggering $77.5 million in gambling revenue since casinos came in. Month-over-month totals for 1996-1997 versus 1995-1996 were up at least 10 percent in all but one of the last 10 months.
A benchmark of sorts was reached in February of this year when the monthly slot machine handle, or total amount of money dropped into slot machines in Mississippi, exceeded $2 billion for the first time.
Are any markets declining?
Yes. The South River Region, which includes Greenville, Vicksburg, and Natchez. The handle, or amount bet, is off about 10 percent in blackjack, craps, and 25-cent and $1 slot machines this year compared to 1996. Disturbingly, the handle is soaring on nickel slot machines, from $8 million in March 1995 to $26.5 million in March 1997.
This suggests that what Lee Witherow, the manager of Harrah's Vicksburg, said about local markets at the Southern Gaming Summit this month is true. "Dollar players become quarter players, and quarter players become nickel players."
Casino executives in these markets say there is little affinity between casinos and local tourist attractions like the Vicksburg National Military Park and the Natchez antebellum homes tour.
"The typical tourist in Natchez does not gamble," says Ira Kershner, general manager of the Lighthouse Point Casino in Greenville.
The Coast market also appears to be declining slightly, but not nearly as much as the South River District. And new construction on the Gulf Coast, such as the $500 million Beau Rivage casino, should reverse the trend. Still, comparing March 1997 to March 1996, the handle is down in blackjack, 25-cent slots, and $1 slots and up in nickel slots.
Do some slot machines really pay back 98 or even 99 percent, as advertisements claim?
Yes, but no category as a whole reaches these figures. The highest payback is on the high-dollar slots, from $1 up to $100. The highly competitive and popular $1 slot market (total handle for March: $955 million) pays back about 96 percent on average. But this is over long periods of play, and may not be true in the short run, just as a coin flipped 100 times may not come up heads 50 times.
Grand Casino's "certified" slots claim means that certain machines have been audited by an outside auditing firm hired by Grand. It does not apply to all machines.
At the Southern Gaming Summit, there was some hand-wringing among casino executives about "salt and pepper" slot machines -- the practice of putting two slot machines with different hold percentages next to each other.
"I think truth is the only way to go," said Rex Stock, director of marketing for Aristocrat, Inc. "You know when you're on a machine that pays 92 percent and when you're on one that pays 96 percent."
Are players "luckier" in certain areas?
More likely, they are dumber or more reckless. It's hard to say whether low payouts are due to player incompetence or stricter house rules. But numbers show that craps players do significantly better on the Gulf Coast -- where the craps "hold," or amount won by the casino, is about 10 percent -- than in the South River District, where it is 25 percent, or the North District, where it is 19 percent.
Economics also plays a part. Craps is a game where the high-dollar player can improve his odds by "backing up" his bet, or leveraging it, to take advantage of the widely advertised "20 times odds" or "100 times odds." Players without much money, obviously, are less able to do this.
Blackjack offers room for some skill. Any sign practice makes perfect?
Not really. In 1995, casinos "held" about 20 percent of the amount bet statewide. In 1997, the figure was slightly over 18 percent.
What's the fastest-growing game statewide?
Nickel slots, by far. In the North District, which includes Tunica, the handle has more than doubled in the last year. In March alone, players bet $34.5 million worth of nickels in Tunica and Coahoma County. Stacked on top of each other, that many nickels would make a very tall pile.
Which games give players the best and worst chances to win?
It depends on skill level and house rules. But simply going by the numbers, $1 slot machines offer the best payback and require the least skill. The payback averages 95-96 percent in all three state jurisdictions.
It's much easier to identify the riskiest games, or sucker games as they are sometimes called. Big Six is the least popular table game, and no wonder. The house regularly wins over 50 percent of all bets. The house typically wins 25-35 percent on the roulette wheel. And Caribbean Stud, a variation of poker, is also frequently over 30 percent for the house. "Progressive" nickel slots, where the jackpot is tied to other machines, pay back only 80 percent on average, while standard nickel slots pay back about 89 percent.