Nearly 10% of Nevada's 122,000 slot machines are being retrofitted after a decision by gaming authorities that players were being misled by a "near-miss" feature into thinking they were about to hit jackpots.
A computer within the machines was responsible for jackpot symbols appearing much more frequently on the pay line than random selection would dictate, according to testimony at a hearing. But the computer, while tantalizing customers with near-jackpots, does not pay off any more frequently than other machines.
Other slot machine makers acknowledged at the hearing that almost all machines are deceptive to some degree but the commission decided that these machines went too far.
The retrofit order imposed earlier this year by the Nevada Gaming Commission gives the Japanese-owned Universal Co. Ltd. until the end of the year to alter its machines, including the popular "Magnificent 7," seen in many casinos.
Some have already been altered and others are being altered on a monthly schedule. But the machines that have not yet been corrected can legally be used in the meantime.
New Jersey authorities have also taken action against the Universal machines in Atlantic City casinos, ruling that electrical mechanics, not a computer, should dictate which symbols appear on the pay line.
Gaming officials in the two states say their actions reflect a determination to maintain public confidence in the integrity of slot machine gambling. But representatives of Universal Co. Ltd. insist that all machines contain "near-miss" features of one kind or another and the move against theirs served only the interests of a leading competitor.
Frank Schreck, Universal's attorney, charged in an interview that "hysteria was built up" against Universal's technologically advanced machines and that they were no less random in displaying results than any other machines.
'A Japanese Issue'
He accused a leading competitor, International Game Technology, of making the matter "a Japanese issue. Their former owner made no bones about saying that allowing a Japanese firm into gaming was a mistake."
At a Gaming Commission hearing, the counsel for International Game Technology, Raymond Pike, referred to Universal as a Japanese firm, but he put his prime emphasis on the contention that the "near-miss" features in the Universal machines went far beyond the ones in other machines.
It was agreed by all sides at the hearing that almost all slot machines are misleading to some degree. For instance, it has long been conceded that on a three-reel machine, more winning symbols are on the first two reels than on the third. Therefore, a player often finds that jackpot indications show when the first reel or the second reel stops, but it is rare to have a jackpot when the third reel stops.
Similarly, winning combinations often show up above or below the pay line, leading some players to surmise that they just missed a jackpot.
But the controversy over Universal's machines focused on the allegation that similarly misleading impressions were showing up on the pay line as well.
"Yes, we (at International Game Technology) have had subliminal inducements (to continue playing for a jackpot) above and below (the pay line), and people see things peripherally, and we have lights and we have blips and we have bells and we have loud toots and all kinds of things that help add to the enjoyment," Pike said. "But we haven't toyed with the pay line."
Schreck responded: "Whether you are two or three months pregnant, you are pregnant. We have the technology to do it on the pay line. They do it above and below the pay line."
After hours of testimony, however, the Gaming Commission voted 4 to 1 that the Universal machines had stretched misleading indications too far.
Dennis Amerine, an official of the Gaming Control Board, the agency serving the commission in a staff capacity, urged the action, saying:
"Never before has the board or commission approved a feature within a gaming device that causes a specific symbol to appear on the pay line more frequently than its mathematical probability of occurrence."
Ed Allen, chief of the staff's electronic services division, told the commission that every slot machine should allow a sophisticated player to gauge their chances of winning by counting the number of winning symbols appearing on the pay line in a large number of pulls of the lever, and then dividing to find the odds of a jackpot.
"With near-miss features, he can't do that," he said.
Commission Chairman John O'Reilly, explaining his vote to require a retrofit, said he and other members of the majority were not prepared to allow a weighting factor to be introduced on the pay line.
But commissioner Robert N. Peccole, who voted against the retrofit, said he regarded Universal's computers as the wave of the future. And he said of the commission's decision: "We are going to declare these machines basically illegal. And then we are going to leave them out there in the public (for months)."