1. ADDICTION, GAME DESIGN, AND GAMING REVENUE Kevin Harrigan, PhD Gambling Research Lab University of Waterloo June 7, 2014, San Diego, NCLGS Conference

2. MY BACKGROUND Computer Science (BSc, MSc) Teach computer game design Computer/Internet/iPhone/Android/etc. Founding member of uWaterloo Gambling Research Lab Focus on slot machine games Why do the games cause harm for some?

3. SLOT MACHINES IN ONTARIO 23,000 slot machines in Ontario Slot machine revenue: $3 billion annually $130,000 per machine Slot machine revenue larger than all other forms of gambling combined Casinos open 24/7 Only 27 facilities have slots

4. PROBLEM GAMBLERS IN ONTARIO Population of Ontario: 10,000,000 1% severe problem gamblers 100,000 individuals 3.75% moderate problem gamblers 375,000 individuals

6. MIDDLE-CLASS BANKRUPT HUSBAND AND WIFE. MONTHLY LOSSES ON SLOT MACHINES. LOCATION: ON THEIR WAY HOME FROM WORK.

7. HOW ? $5/wager $0.50 loss per wager $300/hour 20 hours/week $6,000 X4 weeks is $24,000/month X2 players $48,000/month

8. AWWW SHUCKS EFFECT (NEAR MISS) – See two 7’s on the payline – The type below can appear 12 times more often than by chance alone, on each reel – Accomplished by weighting the blanks which are adjacent to 7’s

9. SIZE OF SYMBOLS VS BLANKS Blanks are smaller but show up on the payline more often

10. UNBALANCED REELS One reel is starved of the jackpot symbol Aww Shucks effect (Near Miss) See the Jacks in non-winning positions

11. NEAR MISSES - RESEARCH RESULTS Research shows that near misses have an effect on the player (Clark et al, 2009) Near Misses enhance motivation to gamble Near misses activate areas of the brain associated with wins, even though it was not a win Brain activity correlated with self-reported measures of gambling propensity

12. LOSSES DISGUISED AS WINS Depending on the wager, approximately 60% of “wins” are really losses Wager $3,75 and “win” $2.25 – Really a loss of $1.50 – But the slot machine produces winning sounds and winning graphics

13. LOSSES DISGUISED AS WINS ‘“The perception is that you’re winning all the time, when you’re really not— you’re putting 25 in and winning 15 back, 45 in and 30 back, over and over.” Randy Adams of Anchor Gaming (Schull, 2005) “Positive reinforcement hides loss.” Nathan Leland of Silicon Gaming (Schull, 2005). One elderly slots player told me “If I keep winning I’m going to go broke.”

14. LOSSES DISGUISED AS WINS: OUR RESEARCH RESULTS (PERSPIRATION)

15. STOP BUTTON Stop Buttons Player can stop the reels before 3-5 seconds Doesn’t affect the outcome Provides an “illusion of control” Giving the player an “illusion of control” gives a player a sense of control even when the player fully understands that the outcome is random (Langer, 1975).

16. CREDITS VS CURRENCY Usually your money is shown as credits Ex: A five cent machines pays 150,000 credits Not easy to convert to currency

17. MULTIPLE VERSIONS OF THE SAME GAME Payback percentage is not disclosed to the player In Ontario, same game can payout between 85% to 98% All versions look identical to the player

18. INDUCEMENTS FOR MAXIMUM WAGER Various messages on the machine “Play all 15 lines for maximum excitement” “Play three credits” Some prizes can only be won with maximum wager

19. HIGH STAKES ROOMS Maximum $ 750/spin Average loss per spin ~ $ 40 A spin every 5 seconds Average $480 loss per minute Average $28,800 loss per hour Average ~ $100,000 for an evening of play (4 hours approx)

20. CURRENT INITIATIVES Educate players Consider regulatory changes Ontario Lottery and Gaming (OLG) is interested in the ‘sustainable player’ Aligns well with the mandate of our lab OLG is sincerely concerned with players ‘bottoming out’