Estimating the Effects of Micro-Location Variables and Game Characteristics on Slot Machine Volume: A Performance-Potential Model

Abstract

A performance-potential model explains 64% of the variation in the unit-level wagering volume of 166 slot machines located in a Las Vegas Strip casino. This study extends the extant gaming literature by narrowing the definition of a slot machine’s location and advancing new variables theorized to influence slot machine performance. Micro-location variables describing ceiling height, aisle locations, and the placement of a unit within a bank of machines all produce significant increases in unit-level performance. These results also have floor design implications related to increasing real capacity. In addition, slot signs fail to significantly affect coin-in levels, whereas the standard deviation of the pay-table and the top-award value produce significant and negative effects on performance. Casino executives are offered a performance-potential equation as an alternative evaluation tool beyond that of simplistic comparisons to categorical averages. The model specification is influenced by literature from the marketing, environmental psychology, performance-potential, and gaming disciplines.