Coming soon to Nevada casinos: slot machines that feel a lot like arcade or video games. The Nevada Gaming Commission recently approved regulations for skill-based slot machines in an effort to help the casino industry appeal to younger, more technologically savvy customers. The regulations create three categories: traditional chance games, skill games in which a player’s ability determines the outcome, and hybrid games in which a combination of chance and skill affect the result.
The skill-based rules have been in the works for months, after the state Legislature approved a bill directing regulators to encourage “innovative, alternative and advanced technology” in casino games. The measure was pushed for by the Association of Gaming Equipment Manufacturers, which represents slot machine companies.
Possibilities created by the regulations are on the minds of many industry leaders as they converge in Las Vegas for the annual Global Gaming Expo. To get a better sense of the practicalities surrounding the new skill games, VEGAS INC spoke with Dan Reaser, an attorney at Fennemore Craig who has represented the gaming manufacturers association.
What are the most significant aspects of Nevada’s approach to skill-based slots, and what sorts of opportunities do you see the games creating?
Many of the concepts that have made their way into actual regulations were concepts vetted in the Legislature. Those include the use of identifiers, and I think that is probably one of the most unique aspects of the regulation process and regulation scheme as it now exists. The identifiers allow the game developer and designer to customize a skill or hybrid game so that attributes about the player can determine what kind of game will be presented, the pay table it will be associated with, the payback and the rules of play. Those may be different for somebody who has a player’s card or a certain rating. It may be based on brand loyalty — whether you frequent a particular casino and have played there. It may be based on the fact that you downloaded a nongaming video game on your iPad and played it, and that same theme is in a slot machine.
Another unique aspect of the regulations as they have come out, and as the technical standards will flesh out, is the ability to have in-session features inside of a game. So if you’re playing, you may be presented the opportunity for a fee — not a wager but a fee — to customize an avatar. You may be presented, through the use of an identifier and this in-session feature concept, the ability to select an additional or a different weapon. You may be able to customize your car in a racing game.
The third big change the Gaming Commission adopted is a different set of standards for skill games’ prize pools compared with chance games. Maybe you can win part of a prize pool if you get so many points in a skill game. Instead of an all-or-nothing kind of situation, there will be a different set of standards in the skill and hybrid area.
The regulations also allow for competitions, right?
They do. Regulators anticipate two kinds of competitions.
The first is a multiplayer game, a single slot machine with several player locations where six or eight people can sit at the same gaming device and play either collaboratively or competitively. Perhaps they could play an electronic version of Jenga. Or there could be six or eight drivers in a driving game where they’re looking at the same screen and they each have a steering wheel that’s mounted on the game.
The second concept of competition is a multiplayer system-based game, where you could have any number of players enroll from gaming devices into a common game run by a server. An example of that would be a military combat game such as “Call of Duty” that could have several people playing, either on a property or among properties, in a single round.
The regulations also don’t prevent other types of competition. These are just the ones described and discussed as the rules were being developed.
How does the casino know it won’t have a bunch of players who are so good the casino won’t make any money?
The 75 percent payback rule that exists today has been continued in these regulations; that has not changed. That 25 percent house advantage still will be subject, as it is today, to operator control.
Some licensees get certified that they have the loosest slots in town because they set the win percentage higher than 75 percent, maybe as much as 95 percent. Those controls still will be available.
What should game makers keep in mind when developing products like this?
There are probably three levels of challenge the manufacturing community is going to have.
The first will be the process of getting these technical standards done. You’re not going to be able necessarily to take off the shelf some very popular video game and immediately translate it into something you can put into a gaming device. There are going to be some mathematical and game design challenges in moving those concepts into the gaming arena.
Challenge No. 2 is finding what I would call the holy grail kinds of games that really will take off. There are thousands of video games, but there’s data game designers can use to say “ ‘Candy Crush’ is really popular, so a ‘Candy Crush’ kind of game should be a theme.” A sub-part of that is: What games in multiplayer context will be successful or not?
The third challenge will be the value proposition. Today, play on a gaming device is rapid — the turnover is quick, the number of plays per minute are high, and the revenue generated is related to how fast and how long people play. Skill games are going to be different. They’re going to be longer play — three minutes maybe, five minutes for a whole game session, and it’s not just what people are wagering. The skill and the hybrid games will have other in-session features that generate revenue
Will social media be integrated into the machines?
The draft technical standards provide for social media platforms to be incorporated. For example, the screen on a slot machine may be capable of allowing the player to log into Facebook or send a tweet or an email, provided the interface does not have any influence over the game. There’s not any real dispute over the standards or how it will be done; I think the issue will be how soon the player will want that service.
I think it’s likely that the social media platform will show up in multiplayer system-based games first, because you want to be able to Facebook your friends who might be at a casino and say, “Hey, do you want to play a round of ‘Words With Friends?’ ” I think some manufacturers think they’re going to just have that capability built into the machine, and whether the casino operators enable it or not will be up to them.
How close are we to seeing these games on casino floors?
I expect the technical standards will get through the Control Board approval process most likely in October; if not, early November. Once the regulations and the technical standards are in place, that will provide the level of guidance the manufacturers need to configure prototypes and put them into the lab. My best estimate is we probably will see games submitted to the lab in the first quarter of 2016.
The lab tests the machines to make sure the IT is correctly operating, and intellectual property and the systems and all the math is correct. I suspect in the second quarter of 2016 some of those games will make it to field trial. You’ll have a limited number of them at a limited number of casinos for 30 to 90 days. Once they meet field trial approval, they can get final game approvals. So I would say third quarter, this time next year, some of these games should be readily available.