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Players at Indian Slots Have No Clue on Payout

It's anybody's guess how much of money put into machines returns as winnings.

February 10, 2003|Paul Pringle | Times Staff Writer

For California's casino customers, it's the real wild card -- a secret that the Native American gambling industry holds close to the vest.

The mystery concerns the payout rates for slot machines: How much of the money pumped into the thousands of chirping contraptions -- the life's blood of the state's 50 Indian casinos -- is returned to players as winnings?

Casino executives have the answer, but they tend to guard it like the house vault. State regulators are clueless. And the players can only guess.

"I expect the rates are worse than they are in Las Vegas," said Bruce Burton, 31, a Murrieta salesman who was heading out of the Pechanga Casino near Temecula, lighter in the pockets than when he arrived. "If the rates were good, the casinos would publicize them."

California is by far the biggest gambling state that does not require casinos to disclose payouts for one-armed bandits, video poker and other computerized games. The devices bring in more than 80% of the Indian casinos' $5 billion in estimated annual revenues -- a tally that's second nationwide to Nevada's $9.5 billion.

No government agency has suggested that the Golden State's gambling parlors are fleecing players, and the tribes say that their machines pay on par with the rates in Nevada. But most casino operators decline to provide specific figures. To do so, they say, would tip their hand to competitors.

"I would never release that information," said Jerry Turk, general manager of the Pala Casino in northern San Diego County.

Divulging payouts doesn't seem to be a competitive problem in other states with billion-dollar casino markets.

From Nevada to New Jersey and Illinois to Mississippi, non-Indian gambling halls must report their percentages to state authorities. Connecticut is the only top gambling state that requires tribes to reveal their rates.

States with reporting regulations make the numbers public, either by region -- the Las Vegas Strip, for example -- or by individual casinos. The rates, determined by computer chips embedded in the machines, generally range from about 92% in Atlantic City and Connecticut to a tad shy of 95% in Nevada. Most states also set payout minimums -- typically 75% or 80%. California's is 75%.

The percentages can be deceiving. A 92% rate means that a machine is programmed to pay back, over time, 92 cents for every dollar wagered. The casino's ultimate take, however, is often greater because so many players feed their winnings back into the machines, bet after losing bet -- the "grind," in casino parlance.

Eventually, 92% of a dollar becomes 92% of 92 cents, then 92% of 83 cents, and so on, until the player's last nickel is gone.

Cindy Smith, 45, knows how that goes. The Sherman Oaks saleswoman was spending a recent Friday night at the Pechanga Casino, where she had just dropped $40 at a 25-cent machine. "The odds here probably aren't that great," Smith said, looking across the wall-to-wall rows of slots, whose carnival lights colored the faces of glassy-eyed players. "And since they don't have to report them, they won't. They probably figure what you don't know won't hurt you."

Smith's friend, Sylvia Browne, nodded. "This is leisure time for most people, and whether they win or lose isn't important," said Browne, an entertainment promoter visiting from Massachusetts. "But I want to know what the return is before I put my dollar in the machine."

Pechanga executives did not respond to interview requests.

One reason payout rates are kept under wraps in California is that state officials, starting with Gov. Gray Davis, did not insist on a disclosure requirement when they negotiated gambling compacts with the tribes. The 3-year-old compacts spell out the terms for casino regulation.

Critics Angry at Davis

Gambling opponents are still angry that the agreements failed to address payouts. They say Davis stacked the deck for the tribes because they lavished money on his election campaigns.

"He did it as a campaign promise to the tribes," said Cheryl Schmit, director of Stand Up for California, an anti-gambling group. "From a consumer point of view, this is not a good deal. People need to know what the rates are."

Davis spokeswoman Hilary McLean denied that campaign cash influenced the governor. She said the tribes held a strong position in the compact talks because California voters had approved an Indian gambling initiative, although the state Supreme Court ruled it unconstitutional.

The state sought the compacts to keep another tribe-backed measure off the ballot, a proposal that would have shielded even more information from the public, McLean said. "Anyone who says the governor went easy on the tribes is laughable," she said.

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