This week I attended the Global Gaming Expo Show in Las Vegas. I've been to the show many times over the last few years. It's a trade show for the casino gaming industry ('by the industry, for the industry'). I always enjoy attending.

At this show is an eclectic mix of the products needed to run a casino property: Blackjack tables, chairs, chip counters, card shoes, uniforms, platters, ID, beverage dispensers, Elvis look-a-like performers, and of course slot machines.

Slot machines now account for 70-80% of casino gambling floor revenues. They are the evergreen revenue generators for properties, and there was no shortage of them on display on the show floor this year. Why is this?

Slot machines are Skinner boxes. You ‘pull the handle’, but you don’t get a reward every single time. When you do get a reward, sometimes it’s a small win, sometimes a big win. But it’s easy to feel the pressure of ‘just one more pull’. As mentioned above, the Skinner box is an analogue for the real world contingencies. That is, it's not a tool for creating nefarious new methods of behavioral modification but rather it is simply recreating these contingencies that are already in place in the real world.

First let’s take look at why people gamble.

Psychology of Gambling

It’s human nature to want to win. It’s part of our DNA, and this is how our DNA gets to propagate and make more DNA. Our brains reward victories with dopamine which makes us feel good and encourages us to want to do more of the same.

In prehistoric society, these dopamine boosts could be rewards for finding tasty and palatable food. Sex feels great to encourage procreation, and parental pride helps us raise children to further our family lineage. Fans follow their favorite football teams and celebrate their wins harkening back to tribal days and clashes between clans. It feels great when your teams scores.

Winning keeps us alive; for this reason, winning feels good.

Winning keeps us alive; for this reason, winning feels good.

Pavlov (and more importantly his dogs!) showed the reward stimuli can be driven through conditioning. Building on this was the work of Jerzy Konorski, and later Burrhus Frederic Skinner, and his research into operant conditioning chambers (now colloquially called “Skinner boxes”).

Skinner boxes

Skinner boxes build on the concepts of Pavlov (who showed that you can condition reactions), to show that you can condition volition (how people make choices).

Imagine you have a box, into which you place a rat. Inside the box is a button and a tray.

If the rat pushes the button, a pellet of food is dispensed into the tray. The dispensing of the food pellet is not reactive (unlike Pavlov); the rat has to take action to get reward. If you can change how the rat pushes the button, you can show that the you have influenced the rat to make a decision; this is called operant conditioning.

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Skinner experimented with the how to condition his subjects, and the schedules for how to best train them.

Relevant to this article are two amazing discoveries from Skinner's work:

It works on humans just as much as animals!
The best way to condition is not to always reward the subject!

This later point, at first, seems counter-intuitive. You’d think that constantly rewarding the subject on each action would be the most pleasing to the subject, and thus the best way to condition them. However, this is not the case.

Using a technique called variable ratio reinforcement, the rate of the reinforcement reward is a balanced between expectation (tension), and release.

Research shows that not always dispensing a reward (only giving the reward after they have pushed the button a random number of times), and varying the value of the reward by a random amount, is a better way to train a subject to continue performing the action. I think you can see where this is going …

Just about everyone who plays a slot machine knows that the odds are stacked against them. Even the loosest machines you can find pay out, on average, less than they take in. So why does a sentient person stuff $100 into a machine, when they know that they’d be better off sticking the money in the bank receiving a sum-certain rate of return? (the food pellet on every push). The simple answer is that the reward on a win feels great (especially when it is not predictable or guaranteed).

Going even further, if you could find a slot machine that paid out better than 100% of what it took in (a job!), you would find that people would still prefer to “play” this slot for eight hours a day rather than working on a production line of a factory doing the same task continuously for a known fixed price (even if this production job paid better on average).

Winning feels great!

Solitaire is arguably the most popular card game in the World, and people love to play it (even though there’s no way to always guarantee a win). Remember how good it feels to win? The feeling of pleasure from beating a game that you don’t always win is higher than that of winning a game that is a sure thing.

Slot machines are Skinner boxes. You ‘pull the handle’, but you don’t get a reward every single time. When you do get a reward, sometimes it’s a small win, sometimes a big win. But it’s easy to feel the pressure of ‘just one more pull’. The feeling of euphoria (the dopamine boost) on each win is divine, and this is compelling enough to keep you playing.

Selling the Dream

It’s not just operant conditioning (with the associated dopamine reward boost on each mini-win) that makes gambling so appealing; there is an uber reward for all gambling, and this is the ‘selling of the dream’.

When you buy a $1 lottery ticket, you are not just investing a chance to win a prize, you are buying a dream of potentially winning a huge jackpot and a life changing event.

Winning a million times your initial bet in a game is a life changing event. You know your chances of winning are microscopic, but they’re measurable, and tangible, and you read in the media about others who have won. You can project yourself into the situation. You are buying a dream. You can reconcile this in your mind as part of the cost of the bet.

Is this all bad?

Is this all bad? Is gambling the work of the devil?

If you pay $15 to go see the latest blockbuster at a movie theatre, 120 minutes later you’ll leave with nothing more tangible than the memory of the experience, and the enjoyment you received. Have you received value for money?

Are slot machines true trandom. Some times of day are better than others. This isn’t true. Casinos aren’t able to reprogram the. On one of my other posts regarding slot machines and RNGs, reader John asked the following. A long time back there was a person who fixed a slot machine when he was working on it at the factory. It was a keno machine and he had a certain code put in the slot machine so all he had to do was punch the code in and the numbers would come up. Slot machines are truly random and in any casino land-based or online, slots are the most favoured, even though most players do not completely understand how they function. Slot makers therefore make the machines completely random, because they couldn't sell them otherwise. (Many jurisdictions actually test the games to make sure they're properly random before the games can be put on the floor. That includes Nevada.).

Do you begrudge the movie theater once the movie is over?

If, instead of the movie ticket, you invested the same $15 playing penny slots for a couple of hours of entertainment, is this any different? Is one a more ‘legitimate’ entertainment than the other?

How about going to a concert, or reading a book you purchased, playing an online video game, or drinking a glass of vintage champagne …?

I’m not here to judge; if you are aware of what you are doing, I don’t think there is anything wrong/different with getting entertainment from feeding slots (if that is what floats your boat), compared to the experience of watching Britney Spears live on a stage. If nobody is forcing you, and you are getting pleasure from your pastime of choice, good for you. I have no more right to try to convince you what you should be

Slot Machine Skinner Box