This paper by Prof. Kevin A. Harrigan at the University of Waterloo presents a sample three-reel three-coin slot machine game with a bonus for three coins, and a true payback percentage of 85.6% when one or two coins are wagered and 92.5% when three coins are wagered. The player sees the winning or losing combination of three symbols on the payline as well as (a) the physical reels as they scroll by and (b) what is just above and just below the payline at the end of play.
This research by Prof. Kevin A. Harrigan at the University of Waterloo examines characteristics of Ontario slots and what the implications are for problem gamblers, including analysis of the probability accounting reports (or PAR sheets) to see how the games are designed. One of their key findings include: “Bonus modes are highly salient environments associated with wins that are in the view of the gambler a very good place to be. Because entering these arousing and highly rewarding bonus environments is rare, only those who gamble frequently will become classically conditioned to these environments and experience the combined effects of operant and classical conditioning – a situation that could preferentially target problem gamblers.”
PAR Sheets, Probabilities and Slot Machine Play – Implications for Problem and Non-Problem Gambling
This Texas Lottery Commission report finds that the percentage of Texans using the state’s lottery has plunged to one-third, the lowest level ever measured. The decline in fiscal 2010 — from 41.7 percent of residents to 33.8 percent — represents the second-largest year-to-year decrease since the Texas Lottery started in 1993. Yet despite this massive drop, the total amount of money spent on Texas Lottery tickets has held steady, which means a smaller amount of people are spending a lot more on tickets. It explains why Texas sells a $50 scratch ticket.
This study by Australian Institute for Gambling Research and the University of West Sydney reported that 48% of gambling machine revenue and 37% of all commercial gambling revenue was attributable to problem gamblers.
Survey of the Nature and Extent of Gambling and Problem Gambling in the Australian Capital Territory
This study by Henry Lesieur from the Annals of the American Academy of Political and Social Sciences found that pathological and problem gamblers account for an average of 30.4 percent of total gambling expenditures in the four U.S. states and three Canadian provinces he examined (the low was 22.6 percent, the high was 41.2 percent in Louisiana). The study identified which games were associated with problematic play and identified “video machines” (as opposed to old-style slots) in that group. Lesieur concluded: “When a state decides to shift from lotto to instant or scratch lottery tickets to video machines as a revenue-raising measure, it is taking a greater and greater percentage of money from problem gamblers.”
This 2008 study from the Journal of Risk and Uncertainty highlights the fact that the lottery appeals to people earning lower incomes and that these individuals spend a disproportionate amount of money on the lottery when compared to people with higher incomes. Additionally, the results suggest that the combination of myopic decision making and the “peanuts effect” – greater risk seeking for low stakes rather than high stakes gambles – can help explain the popularity of state lotteries.
Myopic Risk-seeking – The Impact of Narrow Decision Bracketing on Lottery Play
This is a 2010 study from The Journal of Health Economics which investigates the impact of casinos on alcohol-related automobile accidents. Gamblers often drink excessive alcohol while gambling and casinos often provide free alcohol to problem gamblers. The results of the study indicate that there is a strong link between the presence of a casino in a county and the number of alcohol-related fatal traffic accidents.
The Impact of Casinos on Fatal Alcohol-Related Traffic Accidents
Here is a study on the relationship between crime and electronic gambling expenditures in Victoria, Australia. It shows a consistent positive and significant relationship between gambling and crime rates, especially income-generating
crime rates, at the local level.
The Relationship Between Crime and Electronic Gambling Expenditures
The former mayor of Ledyard, Connecticut, Wesley Johnson, testified his town has not seen any positive economic impact since the Foxwoods Casino was built there. “There has been no economic development spin-off from the casino. Businesses do not come here,” Johnson said.
A 2006 study by the Federal Reserve Bank of Boston found that patrons who frequent casinos catering to local markets do not bring in any new money to the local economy and are simply substituting gambling for other goods and services. Nationwide the overwhelming majority of casinos cater to locals.
