Speaker 1: Good afternoon. You're listening to Gambling with an Edge. Now
here are your hosts, Bob Dancer and Richard Munchkin. Good afternoon,
Welcome to Gambling with an Edge. I'm Bob Dancer and
I'm Richard Munchkin. Today we're having one of our irregular podcasts.
We used to do this weekly and now we do
it somewhere, but semi irregularly.
Speaker 2: Whatever the spirit moves us.
Speaker 1: And the spirit today is moved this because because of
artificial intelligence that is being used for all kinds of things.
And I had a conversation, a brief conversation with Buddy
a couple months ago with Buddy Frank, who is going
to be our guest today, and he mentioned he knew
something about that, so I figured maybe had enough first show,
and he said he did and he would love to
come and talk to us. So, Buddy Frank, welcome back
to Gambling with an Edge.
Speaker 3: Glad to be here, Bob and Richard, So.
Speaker 1: Our listeners in Jen. Actually, maybe we should define artificial intelligence.
I assume everybody knows what it is, but maybe they don't. Uh.
Speaker 2: Yeah, No, I think we should definitely talk about what
exactly do we mean when we say they're using AI
to help them in the casinos.
Speaker 3: Oh God, lets you, because I find so many people
have no idea what that term means. Do you want
a little background.
Speaker 4: Yeah, there was a great movie out a while back,
should have been on your recommended list several years ago,
but it was called The Imitation Game about a fellow,
a Allen Turn, and it was how he broke the
Enigma code using some of the very first computers, which
he helped invent.
Speaker 3: But they really didn't tell you what the Imitation Game was.
That came later in his career, about nineteen fifty wrote
a paper in which he tried to do a test.
He called it the Turing test to see if machines
can think, and it was very interesting test. For years
no one could pass it, but now you can probably
do it with your Apple Watch. And then I think
about nineteen fifty five, there was a workshop at Dartmouth
where they coined the word artificial intelligence. So it's been
around since nineteen fifty five. People I talked to talk
about like it's just come on in the last five years.
Probably has a drone above your house and Arnold Schwarzenegger's
in it and going to drop down in your backyard naked.
But all artificial intelligence really is is the analyzing of data.
And what's changed is it so darn fast. Now we
can do things we never imagine we could do because
they were quite frankly impossible to do. And in the
casino world, probably more than most business, we have a
whole bunch of data. In fact, early in my career
most I'm really close and really love slot systems, and
early in my career everybody complained that, hey, we have
so much data, we can't handle it. So sadly what
they did is just didn't look at other data because
they couldn't handle it. But now memory's gotten cheaper, computers
have gotten faster, costs have come down, and now there's
some really great things going on for casino operators, for
game designers, and I'll argue in many cases for the players.
Because artificial intelligence is there. We can talk about that
as the show goes on.
Speaker 2: Okay, so the casinos had all this data. Now things
have gotten cheaper, and what do they do?
Speaker 3: Well, we can analyze things we never thought about. And
I could give you a thousand examples, but I'll mention one.
I finished my career with a great casino called Pachanga,
and the southern California casinos did really well, and thank
you very much. They had lots of capital to explore
new technology, so well before most of my competitors. We
went to the tribe and said, hey, we want to
put a high speed network on our floor, but we
need to buy a bunch of switches from companies like Cisco,
and we need to buy a lot of big computers
from Dell, and we need memory from a company called EMC.
And it's only going to cost you four million dollars.
And if I was working for a corporation, I probably
would have been fired because they would have said, well,
what's the return on investment next week? And I would
have said nothing, but it's really good for the future,
and that would have really got me fired fast. But
at Pachanga, they went ahead. Because of that we could
do all kinds of advanced things, and we had to
prove to them how we would make that money back
in the future. I'll give you a really simple example.
But John got a relatively small hotel, not like the
mega hotels of Las Vegas. But when they had a
special event like New Year's Eve, guess who we invite
to stay in the hotels all the players who spend
the most money per trip. We call it average daily
trip budget. So I don't know if you guys would
ever be on that list. But let's assume that you're
what I call a ten thousand ADT and up player,
meaning every trip you wagered ten thousand dollars, some people
one hundred thousand, and so on. So the host would
always put those people in the hotel first. But once
we started analyzing more data. What data am I talking about? Well,
what if we take a look at the hotel data,
see how those players that were the ten thousand changed
their behavior when they stayed in the hotel versus when
they didn't. And we found some players maybe did twenty thousand,
some maybe only did ten thousand and five hundred. But
we looked at two thousand dollars players or one thousand
dollars players and saw when we put them in the
hotel they went up to ten thousand or higher. But
changed our whole thinking. We'd never really analyzed what was
the impact of play when they stayed in the hotel
versus when they didn't. We always had the data, but
we didn't have anybody to go out and say, let's
do all this, because it took too much time and
too much effort to look at all players how they
did this time that go clear down to an one
hundred dollars player. We didn't look at how they changed.
That one change alone generated enough incremental revenue to pay
for our entire memory upgrade, which I think at the
time it's about three to four million dollars.
Speaker 2: So didn't you need to hire data scientists pardon me,
didn't you need to hire data scientists.
Speaker 3: In addition to buying all that equipment? That's exactly right.
In fact, I think for the first time we hired
people that had that weird title attached to their name
data scientists. You know before that we had it guys,
and we had financial analysis and stuff. But now all
of a sudden, we hired data scientists because that example
I gave you is very simple, because you might actually
take four or five or six or seven or eight
qualities like that and put them all in your database
to make better decisions.
Speaker 2: And how long ago how many years ago was this?
Speaker 3: Oh my gosh, that was about fifteen to twenty years ago.
And not only could we do more advanced technical things
like at one time we turned every machine in Pachanga
except for the real spinning machines. We turned every video
machine into a tournament and for about a half an
hour every game in the casino. I think there was
twenty two hundred and we set a Guinness World record,
turned into a tournament machine, and then as soon as
the tournament was over, it turned back into a regular machine. God,
we had record revenues that day because everybody got all
excited because I don't know if you know, but tournament
software it generally features like one thousand percent payback on
the games versus a regular machine maybe seven eight or
nine or five six, seven eight or nine as far
as the casino hold. And so everybody went crazy and
we had a great turn. Well you couldn't do that
with the old networks, but with a new one. In
advanced technology, things are better and it's getting better better
every day, and I can talk about that and also
talk about some of the products that are getting all
kinds of positive and negative attention.
Speaker 1: Let's talk about how casinos use it to evaluate player performance.
Speaker 3: That's why I made the point earlier talking about how
we always had the data, but we didn't necessarily know
how to analyze it. Meaning Bob, I could always look
at my slot system and look at your coin in
your number of handle pulls, win loss percentage, and I
put the machine data in there, so I knew whether
it was a it had a theoretical hold of x percent.
And as you know better than anybody in products like
video poker, how the heck do you determine what the
theo hold is? Meaning mathematically you and I can tell
exactly what the theoretical hold is if someone plays it perfectly,
But in the real world there's people who play it
horribly and a whole range of people in between. And
so we just plug been a number, and then once
a year, by regulations, you'd take a look at the
actual number and adjust it as you got closer. And
in case any of your listeners got lost in that,
let me give you example of a multi game that
had a one percent poker in it and an eleven
percent video slot machine, and they were both in the
same cabinet. Well, what we used to do was just go, hey,
one plus eleven, that's twelve divided into it's a six
percent hold game. And by golly, at the end, of
one year, we find the machine was really about a
two percent hold because most people played the video poker
instead of the video real game, and not everybody as
good at playing poker as Richard and you are, Bob,
and so we'd adjust the game to two percent. The
problem is, guys like you, who are really good players
and take maximum advantage of all our programs, you'd be
racking up points at six percent, when if I had
really good data on you, i'd probably have you percentage
of what you were actually playing. So for some advantage players,
that's not good. The good news for you, guys is
not everyone in the world has taken advantage of these
great tools. And I would tell you that in the
real world, probably only twenty to thirty percent of the
computers are using advanced AI programs, and I'll mention a
few of those as we go on, and then they
don't learn the tools they have. So, as you know,
and as you can read all kinds of tip sheets
out in the industry, there's still places where you might
find they're out of whack with what they reward and
how they reward players. And that works really well for
advantage players.
Speaker 2: Yeah, I mean when people nowadays, hear ai, they think
of chat GPT or you know, Gemini, and are the
are the casinos using those things or are they getting
some kind of uh software that does the equivalent that's
geared specifically toward casinos. How how is all that changing now?
Speaker 3: I'm glad you mentioned that because I've been using that
for some time now and it's fascinating. We're now up
to chat GPT version four and five is in beta
but not out yet. But the first thing I ask
people is do you have any idea what GPT means for?
And it means generative pre tram transformer. Well, now that
you know that, you know everything. I mean, that's really confusing.
What it really is is what they call a large
language model. Let me make it even simpler. What this
program does is go out and look at everything ever
written because of the Internet and because the speed is
so fast, and tries to figure out what may be
the next word and what you're trying to write. Pretty
simple and sounds simple, but you've got to remember all
these computers anyway only a function with ones and zeros,
and that's incomprehensible to some people. But what this does
is look at language models and determine how you should
probably say something. Well, you can use this for a
lot of things. I'm a writer, as you may or
may not know, and every once in a while I
write a story I think it's brilliant, but I'll go
to chat GPT four to Zho and say, hey, can
you improve on this? And it's amazing. One is it's
a great editor. All those stupid typos I make and
the wrong verb tenses and everything, it corrects all those immediately. Unfortunately,
half the time it takes out the heart of the
story I'm doing, and in some case is it'll even
put in mistakes. But I gotta tell you, I used
to use chat GPT three point zero and it was
full of mistakes. Four. Oh pretty darn good. It's almost
mistake free, not totally, and every once in a while
it'll invent stuff. But guess what, we're just in the
infancy of these large language models, and they're getting better
and better and better every day. Now, what you really
want to know is how the casino's are using these
large language models. It's mainly in that probably the host
and all the folks in marketing aren't really necessarily great writers.
They should be, but they're not all. So a lot
of times that offer you're getting on your email now
or in your text message might come through chat GPT,
and it's probably written pretty damn well, and it might
even automatically fine tune the offer, so I could send
out the exact same offer that five years ago or
ten years ago. Would just look if hey, Bob's in
this ADT group of two point fifty to six hundred
and Richard's in there too, so we'll send them the
exact same letter. Well, there's a big difference between a
two hundred and one dollar player and a five hundred
and ninety nine dollars player. Huge difference in those two guys,
and something like this could actually taylor each offer to
each of those levels, So instead of having three or
four or five tiers, it might have ten thousand tiers
based on your gaming habits. So hopefully it'll it'll get
everyone a more common playing field and a good value
for their play.
Speaker 1: Now.
Speaker 3: I know YouTube guys like to get a better than
deserved of value, and again, not everyone is using these tools,
so you've got a good future ahead of you.
Speaker 2: So I remember hearing Geez twenty years ago or more
that somebody had the patent on video poker, on analyzing
video poker in real time to give you an exact
theoretical of the player playing the game, but they never
had implemented it. And I'm wondering, is that is that
a reality now? Are they finally doing that?
Speaker 3: There are several people who have out products that are
reported to do that. IGT has a product out that
works on their newest pokers that will do that acres,
and they have a product, their own slot system or
slot supplemental system called Foundation, and it offers that program.
In other words, when it looks at me and I
run one hundred dollars through a video poker, it says, hey,
buddy's pretty good player. Let's give him five dollars of
free play because of that. And Bob plays that same
video poker machine and the system goes, oh my god,
this guy's incredible. Let's give him two cents because he
is really good. So those are the future out there.
Very few people have used it, which surprised me. I
thought more people would and I think we talked about
this a year or two ago about how these programs
were coming, but not everybody has implemented it.
Speaker 1: Yet.
Speaker 3: In fact, very few have implemented it.
Speaker 1: But it's so players who had a choice between playing
on brand new machines in a casino or the same
game on a machine that was ten years old, probably,
assuming they're a good player, would be better off playing
on the older machines because they would be less detectable.
Is that fair?
Speaker 3: Depending on the product they use. The Acres product they
say will work on all the older machines, the IGT
product last time I checked, and they just did a
new version, so I'll have to check that one out, Bob.
But last time I checked, the IGT model only worked
on newer pokers. I'll give you a little operator thing
about new pokers versus old I highly recommend casinos buy
new pokers because they don't have sticky buttons and technology
seeing certainly the screens are brighter and better, But it's
kind of hard because that new poker machine probably won't
make one penny more than the old one unless you're
taking advantage of more of the action gaming products. You know,
the Ultimate X super Duper might require a new machine,
but it's kind of hard to go out and buy
a new machine and your boss says, how much more
money will it make And you have to tell them, well,
probably not much more because people like the old one.
Well why are we getting new ones? It's because of
those we don't have the sticky buttons. They're much better.
They'll go into the future. The other one, you know,
the mechanics out there fixing something every ten minutes. It's
going to be better for guest service. So you notice
an awful lot of casinos are up greeting their machines.
In fact, years ago, one of the first companies to
replace all the pokers was Caesars, and I went, what
a stupid decision. They got one of the worst video
poker products in the industry, least played because they're generally tight,
at least under the old Caesars management. They sure wear
and you can tell me if they still are, abob,
But they bought all new pokers instead of buying other
slot machines, and I was surprised by that. But I
think probably everyone's going to end up in the very
near future, Bob, of being able to track the quality
of play to the player, whether they use it or not,
that's up for debate.
Speaker 1: I'm actually surprised as taking this long to be able
to evaluate video poker players. The products that I used
to sell, like win poker or video poker for winners,
and there were a couple other brands where you could
play them and they would tell you immediately what your
percent and jacuracy was. And that's been available twenty thirty years,
and so the player community had that software. I don't
see why the casino community didn't have it, but I
was perfectly happy that they didn't have it. But I
am well.
Speaker 3: That brings up two great things. One is I never
could understand why more people didn't use your products. I've
got it on I've got the old version on several
of my old computers plus my new one, and now
there's a similar version out there on on the action
gaming sites. And they were wonderful, but not very many
people used it. In fact that I've written reviews of
your books forever and tell anybody you'd be an idiot
to play poker and not read these books. But I
see the real results, and I find all kinds of
people do dumb things. Richard. You probably see all those
players who played triple lot roulette. You know what's wrong
with them. So those kinds of things happen the problem,
Bob is the slot machines have a set of standards
called SASS how they communicate, and in the case of
video poker, for winners, you know, you've got control of
both sides. You can see the outcomes, and that same
program can evaluate whether that was a good player bad play,
and suggest alternate better plays. The slot machine doesn't talk
to the analytical software in quite the same way, except
for these newer products like ACRES and the IGT solution.
I think in the future they'll all have that capability,
but right now they don't.
Speaker 2: Another thing we've been hearing about that is supposed to
be coming is cameras built into the machines that will
recognize the players as soon as they sit down and
whether they're using a player's card or not. I mean,
are those is.
Speaker 3: That started to happen?
Speaker 2: Are those in casinos now?
Speaker 3: Actually? I think it was you and I Bob undering
the floor three years ago at G two E yep,
and what was left to Ballys. You know, they've had
seventy three name changes since then, but they had little
cameras staring right at Bob Dancer on the video poker games,
and you know, operators will go on this, It's great,
you know we'll be able to solve problem gam and everything. Well,
it went over like a lead balloon. Some states, Illinois
is Won, for example, have outlawed facial recognition tech genology,
and based on negative feedback, almost all the companies dropped
their efforts of that. You may or may not know
most surveillance departments use facial recognition to the spot band
players or shobble makers or criminals. But that technology hasn't
made it down to the slot floor. And I don't
think because of these privacy concerns and the laws I
talked about, that it will. So I think you're safe there.
I have some other ways I wish we could track you.
Speaker 2: Wait before we move to that. Does that apply in
Illinois to surveillance? They can't use facial recognition in Illinois
for surveillance, Richard.
Speaker 3: Check it out from someone besides myself. I can ask
that answer. I am seeing the World Game Protection Conference
coming up, and I can ask them that about Illinois
because some of their regulators will be there. But I
believe that applies to all industries, not just casinos.
Speaker 1: Wow.
Speaker 3: And I don't know which other states, but i'd heard
some other states are doing that one of those privacy
concerned things.
Speaker 2: Yeah sounds good to me.
Speaker 1: Changing gears for a little bit. Slots is not the
same as video poker. A couple months ago, the MGM
made a big splash in the news because they're going
to be using AI to look at all the slot
machines that people play and the ones who only play
machines of a certain type. MGM is going to either
restrict them or eliminate them from the casino. Do you
know anything about that?
Speaker 3: Sure, But it's not just MGM. I find most of
those corporate guys or years behind in their technology. I
got to give you a little background. I love the
subject of AI for analytics. You call it business intelligence,
but I worked both with Gaming Analytics when they were founded,
I was on their advisory board for a couple of years,
and today I do a little consulting with a company
called Quick Customs Intelligence QCI, and they're both analytical programs
to do that. There are about ten other minor ones.
Those two are the major ones. If anybody wants, I
can look up while we're t in the names of
all the others, But those are the two major ones,
and they do all kinds of things like that bop
they look at the players. And I wrote an article
a while back about the industries upsetting about machines that
I call it perceived persistence and true persistence machines. Do
I need to explain those to your audience planningly? Okay?
Persistence is jeezus machine like hex Breaker was one of
the first big ones. But going way back, there was
a machine called diamond Mine from IGT and I'll use
that one explain. You're looking at the slot machine and
over at the side as a tube, and every time
you had hit a certain combination, a diamond that jump
up and drop in that tube, and you could see
it over there on the right hand side of the screen.
And when that tube got filled to the top with diamonds,
boone me get a jackpot. That is true persistence. And
today there are several machines out in the industry, very popular,
that are true persistence, meaning if certain conditions occur, you
almost can't lose. Even simpler example, let's talk about video poker.
They have a progressive meter on that. And if you
were one of the guys who went out a long
time ago like I did, and bought Bob Dancer's video
poker for winners you could put in you can change
the top award, and you'll notice as it gets bigger,
all of a sudden, the machine. It may have been
a ninety nine point five, All of a sudden, now
it's one hundred or one hundred and ten or one
hundred and twenty percent payback. So you could see as
the progressive grows, the machine almost can ever lose my luck.
It can still lose, but basically overall you're going to
be a winner. It progressive. So that's a form of
persistence machines. How should operators feel about them? Well, guess what,
when those jackpots get we'll use the simple video poker
instead of the persistence machine. So when that jackpots gets bigger,
I notice, all of a sudden, the coin end goes up.
So I'm really happy. More players are playing it. They're
going crazy playing it, and everybody's happy. The casino's happy
because we have increased volume. Not so good when it
hits and resets back down to four thousand, because now
it's minimal play. But that'll happen again as it builds.
That's been going on for years in Big Link banks.
It can get abused sometimes by what we call team play,
meaning on link there might be twenty machines all hooked
to the same meter. So sometimes when it gets high,
folks hire a whole team of players to play it
and not let anyone else play it till they hit it.
That was an abuse from the operator's point of view.
From the team captains, it was a good money making strategy.
You could still lose, but most of the time he won.
But those weren't extreme. You get new persistence machine and
you're going, what's the problem. When that diamond shoot gets full?
People jump in there and play it, and what's the issue.
I don't care. We're still getting the same whole percentage
on the machine we always got. Well, the issue became
I used John Smith as the average player comes in
every day, plays machine a bit, and then here comes
what I call the persistence mandit. The guy comes in,
he only plays that machine when it's in a winning condition.
What's the problem, We're still making money? Well, John Smith
is upset because when he started there was one diamond
in there and he filled it up three quarters and
had to go to the bathroom or had to go
home on the bus. That day, and or when he
went to the bathroom he came back. There's the known
persistence player hitting that jackpot for only playing a small amount.
Great for the persistence player. He's smart, he's spotted machines
in a favorable condition and played it and won the jackpot.
But John, it's mad and doesn't come back to your
casino again. So a lot of I think this peak
is this resistance persistence machine peaked about two years ago,
and a lot of operators now won't put in a
persistence machine. The brand new one that got most of
the hype at G two E this year was called
Phoenix Link, a brand new machine from Aristocrats. Pretty good machine.
It's got a persistence feature, but it's not as prominent,
and a lot more that bonuses go to the other side.
Now there's another thing called perceived persistence. My favorite game
is from Aristocrat. I call it the Firecracker game. You've
probably seen it with three strings of firecrackers hanging down them.
You look at them, and only the bottom few layers
of firecracker twinkling or some you know, they kind of
glitter in the light. As a machine gets played more,
you'll notice that those twinkling firecrackers climb up to the top.
A lot of players will go over and jump on
that machine because it looks like it's ready to hit,
because when one of those strings get to the top,
it can hit often does, but guess what that's perceived persistence,
because machine can also hit when there's nothing flickering at all.
So operators love those. And there's one other product I
failed to mention that really got people going, and that's
a special kind of progressive meter called must hit by
and several manufacturers did Real Good Ainsworth really kind of
pioneered this, and that means, let's say there's two or
three meters, but one of them says must hit by
one thousand dollars. So when the meters at five hundred,
yeah you play it. That goes up. But what do
you think happens when the meter says nine hundred and
ninety eight dollars. All of a sudden, there's this guy,
Bob Dancer playing it who have never seen before in
our life, because he recognized this machine was in a
winning condition and without too much coin in he'd probably win.
So those also are getting some negative pushback from operators
gms who say get rid of all the persons. I
don't think you'd find a hacks breaker around anymore because
so many people reacted negative. There's a version of Buffalo
that's like that. And if you read any of the
good books out there, you know the Wizard of Odds
got one talent which games to look for, and a
lot of people are writing columns about what games to
look for. I urge you not to do that, becaus
soon as gms and slot operators see that, that will
crush out and remove those games. But therefore the good
analytical programs are doing it. The problem once I identify
a guy who only plays those machines, what do we
do about it? And I don't know anyone who's come
up with a good answer for that yet, Bob, I
guess they could cut you off your club points, but
you're still going to make money, so it's kind of
a quandary. What we can do is not make you
absurd offers and put you in the high roller suite
and everything's free at the golf tournament and send you
on our Norwegian cruise. But other than that, there's not
a lot we can do about that. And sadly, some
really fun games are not being purchased or put on
the floor by some operators because of this problem. It's
probably more than you want to know on this.
Speaker 2: No, I mean some of the operators are throwing people out.
I mean literally, you know, eighty six people for playing slots.
Speaker 3: You ought to be familiar with that, Richard. I'm not
a slot player, I know, but you were the first.
Your table games players were the first victims of being
excluded from because you know something, no good reason. Yeah,
and it's hard to do that. So you know, that
may be fine in a place like El Cortez, where
you know all the players and you say hello to
your friends, but try that in Yava mar Pachonga, where
there's more than five thousand machines, or Windstar, where there's
close to ten thousand. The place is packed, hard to
get rid of people.
Speaker 1: Well, it is actually is easy to get kicked out
for slot hustling in El Cortez as it is to
be counting cards.
Speaker 3: They know the bad guys. That's the difference.
Speaker 1: It is. One of the places that does that. They
don't actually kick out, but they restrict is the airport
in Las Vegas. The airport has lots of machines and
they're the people who run those machines are actually eliminating players,
are restricting them. They cannot tell them don't come back
to the airport because the airport is a federal facility,
but they do make they call the cops on them
and hassle them and stuff like that. And they in
my mind that the airport would have less reason to
do that than a casino would because the airport doesn't
really depend on repeat customers of the same people that
a casino would, because it's, uh, it's just it's a
different animal than a casino. A casino, as you tend
to a lot of locals would go to that one place,
but an airport's it's not that way. You don't really
go hang out at the airport unless you're flying. But
there were people who would get refundable tickets and go
in and run off the play all the persistence games
and then cash in their ticket and don't fly, and
the airport slots are restricting them.
Speaker 3: Interesting, Can I tell you a secret you can't share
with anyone. There's no one listening to.
Speaker 2: This, No, just just the three of us.
Speaker 3: Generally, airport slots are the worst slot machines on Earth.
Speaker 1: To play.
Speaker 3: I mean, they're generally tighter than most, but if the
operator's foolish enough to put pure persistence machines in there,
they deserve it. So my overall tips is, don't play
airport slot machines as a regular thing unless, like Bob said,
you spot pure persistence machines.
Speaker 2: Yeah, I just I can't imagine. It seems to me
that they could really open themselves up for a lawsuit
to have, you know, the police's come, literally, the police
come hassle some guy for playing a slot machine when
the guy actually is flying somewhere or arriving from somewhere.
Speaker 3: Well, the other thing is that with persistence machines, you
got to kind of know your machines a bit to
know what conditions it is, and you've got to be
there when they hit. I don't know, but maybe you do.
But I don't know anyone who goes to the airport
on a very very regular basis unless it's a commuter
flying commuter, So well, I can see why they can
beat him, but there certainly wouldn't be beating them on
a regular basis, would they.
Speaker 1: Well, if they had refundable tickets and they made a
trip every day, to check out all the persistence machine
and then didn't fly out on that ticket, used the
ticket to get through security, and then turned it in
and got reimbursed for it. There were people who did
that on a regular basis. There were slot teams that
did that on a regular basis.
Speaker 3: Bob, I love talking to you because I learned something
every day.
Speaker 2: I mean, but before we before we started, you said
that once you started doing all this data analysis, you
found that you had misjudged players in the past. Can
you talk more about that.
Speaker 3: Well, you know, the one area where we haven't made
a ton of progress, Richard is table games, mainly because
we don't get automatic inputs like we do with slot machines.
I mean, pretty much anyone who plays a slot machine,
whether they're a card member or not, I know the
data because it comes to the slot machine. Well, with
table games we have to rely on things like the
pit boss comes every once in a while and sees
Richard's only putting out black chips or fight dollar chips,
and he writes it down and he goes around, and
of course all the advantage players when they see that
guy come and put out a big bet. As soon
as he's gone they put out smaller bets until the
decks in the condition. Anyway, for lots of reasons, we
didn't have accurate inputs on table games players. I was
working at the El Dorado, which in those days was
a little casino and now is the largest casino group
in the world. But we explored a product called mind Play.
It was a table games tracking that used cameras to
record the chips and stuff. Turned out I had a
lot of flaws and the dealer had to do it
perfectly or it didn't work right, so they abandoned it.
But we learn with that short amount of data that
we were actually throwing out all kinds of people we
thought were advantage players or card counters or deal slicers
or whatever. And when we got that system and we
find out, hey, those are really good players. I'll tell
you one more, seeker, Richard, don't tell anyone this. Of
all the card counters in the world, only a very
small percentage of are good enough to really beat the game.
And I'm gonna ask you if you agree one hundred percent. Yeah,
And we were throwing out all kinds of good players
who actually should have been VIPs because they weren't that good.
But based on their way they were playing, just using
cameras upstairs and having the guy look at it, we went, ah,
that guy's a card counter of throw him out.
Speaker 2: Another mistake that they make, and I'm wondering if they
have changed in this regard. They look at a guy
and they say, oh, we think he's counting cards. You know,
we should throw the guy out, But they don't look
at the rest of his play. And if let's say
you have a guy who who maybe he is a
winning player, you know, on blackjack and has some small edge,
but he also goes and plays slots, and he goes
and plays craps, and he bets in the sports book,
where you know, if you look at all of his play,
he's actually great for the casino. But because maybe they're
worried so much about the blackjack, they throw the guy out.
And I'm wondering if they've started looking at the totality
of people's play in that regard.
Speaker 3: Hey, Richard, you should go be a salesman for QCI
or Gaming Analytics or one of those things, because that's
exactly what they claim. I want to look at the
full picture of a player. You know, he may be
wonderful for all kinds of other reasons.
Speaker 2: Yeah, and his wife might be playing slots, you.
Speaker 3: Know, amen, look at total value, his addresses, where he
comes from, drive time, all these things we never used
to consider. Now we can put in for a total
mix of players. You know, and you're very right about spouses.
I remember we had one player, huge player, an old
associate actually was a Wall Street guy with all kinds
of deep pockets, only played craps. But his girlfriend hammered
the hundred dollars machines, and so he got to look
at a place like her private margin far exceeded anything
he did. So, yes, you're absolutely right. With advanced data analytics,
you can look at the total player. And again I
mentioned the breakdowns between that. Another big seeker in our industry.
You've heard of the eighty twenty rule, where twenty percent
of your players produced eighty percent of your revenue. Was wrong.
What it really is is more like the ninety five
five percent rule, meaning five percent of your customers generate
twenty percent, I mean eighty percent or more of your revenue.
It's amazing. So you really want to track and accurately
understand those players and these new programs allow you to
do that. The one thing I just urge. I just
wrote a little piece for CDC called ten Wishes for
the New Year, and the first one was says, visit
the competition, Visit the competition, visit the competition. But down
on the list, I said, you know, use some of
these new tools. The other thing I'd put was one,
update your software. I can't tell you how many people
are using like IGT version five when the rest of
the world's on version ninety seven eight and they're not
updating their software. So our industry still has a problem.
There grit tools out there today, but people aren't necessarily
investing in the training to use them properly, to take
advantage of what you can learn for you guys like
that example, Bob just gave him a minute ago with the
airport that I had no idea about that because I
didn't think about refundable tickets. There's still ways to get
around it. I got to tell you a story about
Bob Richard. I'm working in Reno at a place called FitzGeralds,
and I've known Bob because he did some consulting with us.
A very good video poker player and everything else, and
based on his help. I tried to make sure I
was in marketing. Then I traded to make sure that
our rewards programs accurately affect reflected the value of the players.
So Bob comes in with his I believe it's his
ex wife at the time, and.
Speaker 1: At the time she was my wife.
Speaker 3: She was my wife. She's his ex wife now. And
I'm going, well, how come you here visiting. I didn't
especially our property, We didn't have particularly lose poker. But
he said, well, the Women's Bowling Congress is in town,
and he went, what the hell does that have to
do with anything? He said, well, I got my wife
to join and found out everybody in town was given
huge bonuses and points, rewards, things and everything if you're
a baller. So she joined and we went out and
had quite a profitable weekend. I never thought of that,
you know. So those are the kinds of things that
I think you'll continue as advantage players to have it,
because one the operators who have the kinds of tools
I have now that would have spotted that they didn't
exist back then, and then an awful lot of operators
are not using these tools. One of my suggestions was,
if you haven't done it already. Please explore these AI
tools in your marketing, in your slot selection committees, hopefully
someday in table games Richard as well, or.
Speaker 2: Hopefully not, depending on which side of the fence you yeah, yes.
Speaker 3: Well, I also talk about an area that's really got
a lot of people buying these programs called churn. That's
a marketing term. And let's say, you know, I'm at
a casino a and Richard came in every two weeks
or at least every Thursday, and spend his budget. Maybe
his spend was seventy five dollars every trip, and he
stayed there about two and a half hours. Well, with
these programs, we can see one if you change that
that pattern, why and what do we need to do?
But secondly, with these really advanced programs, and I know
Acres is one of them, we could look at your
play Richard and went, you know, he's here for two
and a half hours, but he's only been here half
an hour and these machines are wiping him out, and
we could reward you money. Now, where do I get
the money to do that? Well, I don't give it
to Bob who's playing in other machines. Over there and
he's just won, you know, two royal flushes. He's happy,
he's got eight thousand ahead on the machine. I don't
need to feed him any instant bonuses. He's doing just
fine and very happy because machines are paying off for him.
So we can tailor offer specifically that and even do
it in the middle of your session. That's what Acres stimulates.
But I think the other folks will follow their lead
in the near future and try to enhance your things.
So if we see your budgets going out too fast
or items like that, and even they talk about some
of their materials, maybe we find out for some strange
reason unbelievable to me, you're a Las Vegas Raiders fan. Well,
when they score a touchdown in real time, we can say, hey, Richard,
your team just scored a touchdown. Here's a bonus, and
that'll make you feel very personal connection to the machine. Now,
sadly for you, they don't score very many touchdowns, so
it won't get much.
Speaker 2: But right, yeah, I'll get the bonus on the slot machine.
But if I go over to bet them in the
sports book, they'll say, sorry, you can bet ten dollars.
Speaker 3: Well, that's a whole new world the sports book. But
one thing about that I mentioned. We have good data
about slot machines. We got really great data about sports betting.
So that's an area where AI will really really be
valuable in the future because everything's online or has the
data computerized, So lots of opportunities there now for the
game designers, they're really love AI because they can look
at all kinds of elements. What bonus did the player
like the most when he got this bonus? Did he
play more, play less? Did he leave when he got that?
All kinds of things we couldn't look at before we'll
be able to look at in the future, and the
manufacturers will be able to look at that data too
if it's on a shared link.
Speaker 1: I would think sports books have been using AI for
a while sports.
Speaker 3: Because, like I say, everything's online and you know their
purpose is by the way, I don't know if you've
seen the numbers, but it's staggering how much is being wagered.
Atlantic City on their combination of sports betting and online
betting exceeds their slot play. It's just phenomenal. And they've
only been in that business three four five years and
already it's that big and growing like a weed. So
I don't think it's hurting casino ricks and mortars, but
it's a whole new audience who's very active in gambling
a lot. But I think it's good because we'll be
able to spot quickly illegitimate bets or money swinging in
bizarre ways that if it was all just with the
bookie in the corner or the guy in the back alley,
you wouldn't spot those patterns, But now you can.
Speaker 1: How do you see AI different in five years than
it is today.
Speaker 3: I think it'll be adoption. I think, you know, I
always consider myself an early adopter in the industry, and
I didn't deserve that title. It's just because everybody else
around me was a slow adopter.
Speaker 1: You know.
Speaker 3: It's the old story. You don't have to outrun the bear,
you just have to outrun the guy the slowest person
in the group. And I think as time goes by,
you'll find more and more people seeing the benefits of
good analytics and good AI, implementing it in their products,
their marketing schemes, their rewards program and so on. Just
another simple thing at the company I do a little
consultantly called QCI. You guys, ever heard of a CEO
at companies chief operating officer? Yeah, sure, they're chief operating officer.
There is a computer program. It's got someone's name. I
forget what it is. And if you think about the
Peter principle in our industry, like a QCI, that's a
company that really hires the co CEOs or the co founders.
One guy's an analytical expert in databases and graphical designs
and floor mapping. He's wonderful. The other co founder is
a PhD in mathematics. They're just really good guys. So
you promote those guys to the CEO and they're spending
half their time file and HR reports, answering email wondering
why one of the employees ran off with another employee,
or did they do their requisite training and all this stuff,
and which emails should go out? Who did you respond to?
We checked our supply change. Those are not the skills
of those two guys. So they found GOSH. I wish
I could remember the name they call it. They love it,
but it does all the mundane things like schedule times
for meetings, do all this stuff, knows who's where, who's traveling,
all those kinds of mundane things is being done now
by a computer at that firm, not by a human,
because those are skills better handled by a machine than
I think. You'll see more and more and more of that,
you guys, simple example I can think of Bob Is.
I loved it when cars came out with cruise control
and what that meant, you push a little button, you
set the speed, and now you don't have to keep
your foot, especially on that drive between Ringo and Vegas.
It'll just go the speed. You said of that, Well,
then along came adaptive cruise control use an AI, and
what that did is it had a little sensor in
the front or camera and same exact thing. But if
all of a sudden, now there's a car doing fifty
five in front of you and your cruise control set
the seventy, you won't smash into the back end of
the car. Whereas with the old cruise control it was wonderful,
but you would smash into the back end of the
car if you weren't paying attention. So adapted was really cool.
It would slow down. Then I bought a Tesla, and
a Tesla first part of it was it had adaptive
cruise control. But it also had cameras on all four
sides and everything. And so now it goes and it
goes right up the car, and it keeps the constant
speed no matter what it is. But it also because
of the cameras, it'll go around that car if there's
that other lane. And now I got the latest free
version of a thing called full self driving. And now
I just put in where I want to go, and
I swear to God it works perfectly. The car will
just go there by itself. It'll stop, it'll signal, it'll
stop at the red lights. It makes turns, does everything,
and I don't have to do a thing. Now I
hold on the wheel because my old fashioned mind doesn't
totally trust it, but I barely have to touch it.
These things just keep getting better and better and better.
And Amazon keeps recommending books I like to read, So
getting better and better and better every day.
Speaker 1: As always, Buddy, it's a pleasure to have you on
the show. Thank you. I learned a lot today. You
accuse me of teaching you things. I definitely accuse you
of teaching me things.
Speaker 3: I've got to buy refundable tickets from now on.
Speaker 1: Yeah, but also know that the they're looking out for
you if you're if you're playing Buffalo Ascension too much,
they will they will do things.
Speaker 3: Richard don't tell me, but he just mentioned one of
those games on that list.
Speaker 2: I told you, right, Yeah, yeah, I think the I
think the cat is out of the bag on that one.
Speaker 3: Yeah, among those who know, and they're not hard to spot,
and in fact, I recommend regular players look for that.
Why why should they not do them? But but just
like people not using video poker for winners or some
of the great tools out there, thank god for US
operators and for you advantage players, there's a bunch of
players out there who oblivious and I can't understand why
anybody plays six or five Blackjacker triple lot Roulette, but
there's hundreds of people who do. Yeah.
Speaker 1: All right. So at the end of our show, sometimes
Richard and I would have a recommended section, and today
I am going to talk about a recommended a book
called Blood Game by Jeff Boats. For some reason, Jeff
spells his first name j Effe. I don't know why,
but I asked him how to pronounce it, and he goes,
it's Jeff. So I should have known. I suppose, but anyway.
Blood Game is an action packed thriller involving Mid Eastern
terrorists set at an Eastern European poker tournament. The protagonist,
doctor Thomas Vale, is a highly functioning individual with Ashberger
syndrome somewhat similar to rain Man, and he's on the
fringes of the CIA, but not fully part of it.
The book is the first of a series of adventures
that involve this character. I enjoy the thriller genre and
this book will definitely fit right in and the fact
that it's said at poker tournament will make it adventest
to many of our interest many of our listeners. Richard
will provide a link to that game at at the
end of the show. Its published date is February fourth
of twenty twenty five, so you can't get it quite yet,
but it's coming up soon.
Speaker 2: Yeah, I you know, after spending a lot of time
in Hollywood and reading a lot of really terrible scripts.
You know, when I was younger, I felt like if
I started a book, I had to finish it, and
and and then I got to the point where I realized, boy,
is that a waste of time? If I don't like it?
I'm dropping it, you know, after ten pages or whatever.
So I when Jeff sent the book, you know, I
was trepidacious because I didn't want to have to tell
him like, you know, sorry, I I thought it was terrible.
But I read it in two days. I mean, like you, Bob,
I'm a fan of these kind of thrillers, you know,
Vince Flynn or Tom Clancy or these type of books.
And you throw in the poker aspect. Yeah, I'm a
sucker for that book. But yeah, held my interest right
from the beginning. As I say, I finished it in
two days. So we wanted to give a shout out
to Jeff since he's a fan of the show and
he wrote a good first book.
Speaker 3: So there you go. Hey, I got a recommendation guy.
Speaker 1: Oh good.
Speaker 3: It's a game you can't play until summer unless you
live in Indian Land or a few jurisdictions. In fact,
it's going to be legal in Louisiana any day now.
But it's been out for a while. Was released in
twenty twenty one. I don't know if you've heard of it, Bob,
but it's called Devil's Locke. It's by a company called
Blue and it's a slot machine or what it's a
slot machine and it has a small perceived persistence bonus.
But this machine came out from a very small manufacturer
named Blueberry, Canadian company based in Quebec. They've got they
got a brand new CEO and he hired some really
great people, hired some good sales people and some good
product developers. And this game came out and even though
it wasn't in Nevada, in all the national polls, had
shot up to number one. That's not unusual in one
first month when a game comes out, but this thing
stayed at number one for almost a year, almost more
than a year. It's really a fun game to play.
You can go on to any of those influencers and
watch them play this game. It's up for approvals in
both New Jersey and Nevada in this coming summer two
thousand and five, so I think you'll find all the
nevad operators I talked about are just dying to get
this on their floor, but they can't because it's not
licensed yet, but it will be this summer. You can
go to California and play it all.
Speaker 2: Over the Is it a persistence machine.
Speaker 3: It's got a perceived persistence element in it's not true persistent,
but it's a lot of fun. Instead of using the
eight eight eight, like every Asian game in the world,
or back in my day the seven number, it's based
on sixty six. They didn't want to go to six
sixty six because of the anti Christ, but six ' six.
It's a great game. You know, a lot of people
love it. It uses fifteen independent reels, a center pig
or piggybank figure in the excuse me, devil figure in
the center where because it's a three by five, the
triggers all kinds of bone. It's a game I think
a lot of people will like, but it's not a
true persistence.
Speaker 2: Yeah, I have to tell you a secret, buddy, But
our listeners they don't play slop machines for fun, So I.
Speaker 3: Know I'm just mentioning this one because they'll notice an
awful lot of players playing. I'll give you a tip
that might mislead some of your players at first. A
lot of these persistence bonuses a trigger on the pay line.
This company took those and put them up above the
real set. And it's two pigs that look like piggy banks.
When they grow, they grow grow, grow, and then they explode,
and when they explode, you just about can't lose again.
Don't tell anybody this, but it's perceived persistence because the
size of the pig makes no difference, so they might
get mislad a little bit. They're kind of like the
Firecracker game food a lot when they play that one.
Speaker 2: So that's good for our listeners to know to avoid
this machine.
Speaker 3: Yeah, it's a great invariant. If they want to be entertained,
they'll love it, you know, but it is not two percent.
Speaker 1: Yeah, very good, Thanks again, buddy, You're welcome anytime. Good
talking to you. Bye bye.
Speaker 3: Wow.
Speaker 2: We got to the end of the show and I
was editing it and realized that it had been so
long that Bob forgot to end the show. So I
guess I will have to do it. Go out and
hit lots of royal flushes everybody. Good day.