The Rise of Penny Slot Machines

Penny slots have never really been an operators’ dream machine.

They’re too, well, penny ante.

“The last time one-cent stepper (reel-spinning) slots were a viable option for casinos," Ed Rogich, marketing vice president for leading slot manufacturer IGT, "was when a penny had the value a nickel does today. And that's a long time ago."

Times change. Penny reel-spinning slots may be a thing of the past, but suddenly one-cent video slot machines are the hottest thing around. Players are flocking to them --- at many casinos, they’re the first machines to fill up with customers each day.

And it’s no cheap thrill. Many casino operators say they’re making more money per machine on penny games than they are on nickels or quarters. Other casinos that haven’t yet gone to penny games are having success with two-cent games that draw bigger play than higher-denomination machines.

Our pennies are performing better than nickel games in some cases," says Tammy Couchman, slot director at Par-A-Dice Casino in East Peoria,  Illinois. "We made a Penny Lane area downstairs with a juke box, '50s and  '60s music. It's a fun area. The people love it."

John Clausen, slot director at Majestic Star Casino in Gary, Indiana, just started to sprinkle in penny slots this summer, but has been successful with two-cent games. “The two-cent games outearn nickel and quarter games,” he says.

Adds Terry Carlson, slot director at the Chip-In Island Resort in Harris, Mich., “Definitely, the penny games are what people want to play. As long as they’re playing ‘em, I’ll have them on my floor. Just give the people what they want.”

None of this would have worked if players were still feeding coins into the slot by hand for each pull, with coins dropping into the tray for each spin, and bets limited to one, two, three, perhaps five coins on a three-reel slot that used diagonal paylines as well as the three horizontal lines across the reels.

To give pennies a new casino life, there had to be changes in money-handling and games with more paylines with the possibility of bigger bets. And while not all casinos that have penny slots have gone the multiple-denomination route, it doesn’t hurt to be able to offer players the chance to bet in units of pennies, two cents, three cents and higher, all at the same machine.

MONEY-HANDLING

While the slow speed of dropping coins in slots or payouts from a coin hopper are not issues for online casinos, penny slots wouldn’t be possible in the physical world without advances in money handling.

"The enabler for low denomination slots is ticketing system," says Rogich, noting that ticket in, ticket out (TITO) systems eliminate the need for frequent hopper fills or hand-pays to serve customers who cash out thousands of low-denomination credits at once.

Beyond all that, the small size of the penny makes it difficult for hoppers to handle, leading to frequent jams and payout mistakes. The same problem exists with the dime, which is part of the reason 10-cent machines never carved out floors space to rival nickel or quarter games in the pre-video days.

At Treasure Island casino in Red Wing, Minnesota, slot director Ken LaVenture was able to offer low-denomination machines without TITO through the use of tokenization. Instead of using small-denomination coins such as pennies, tokenized machines use a larger standard token --- for example, a $1 token to put 100 credits on a penny machine. Payouts are made with the larger tokens. Cash out 2,000 pennies, and you get 20 $1 tokens. The problem comes in cashing out odd change. To cash out 2022 pennies, you get 20 $1 tokens, then have to wait for a hand-pay on the remaining 22 cents.

 "We started doing tokenization early in the process," says LaVenture, who  was adding penny slots to an inventory of two-cent games this summer. "We  started seven years ago, and have had a very good reception from players.  They’re happy to pick up one coin rather than 20 nickels. They're very receptive  to that. We're still limited to hand pays when we have to pay out less than a dollar, such as 20 cents, 22 cents."

Kent Young, marketing vice president for Aristocrat, a leader in the low-denom movement with its large catalog of Australian games, says, "The first technology driving low denominations, primarily in the Midwest,  was tokenization. The bill acceptor was important, but we had to be tokenized."

But Treasure Island now has TITO on some machines, and LaVenture says the numbers of ticket printers will expand. That’s a natural evolution in meeting the needs of low-denomination games.

"We waited for ticket printers to do pennies," says Couchman. "Imagine putting pennies into the coin hopper. Tickets made it possible to have pennies."

At Chip-In, Cashman says, “We just started tickets this year. We’re up to about 50 percent. I think we’ll just go coinless. The customers seem to prefer that.”

Katie Stage, marketing director at slot manufacturer Atronic, adds, "Technology, specifically  TITO, certainly makes it easier to run penny games. While some casinos  successfully ran low denomination games on tokenized machines, TITO offers  added value to both operators and players.”