Saturday, January 20, 2007

How much does a slot machine cost?

How much does a slot machine cost?

These answers are a little varied. Recent numbers indicate that Bally sells their machines for $9,671.00 each. WMS sells their slot machines for $11,840.00.

IGT sells theirs for less than that in some cases becuase their business model allows for game changes which costs an additional amount.

A general assumption (which is a pretty broad assumption based on Las Vegas, Atlantic City and many other markets) is that each slot machine makes a profit of $100 a day. That means, before other expenses like paying for the employees or the buildings, it takes around 100 days for a casino to pay for its slot machines.

How does that affect me as a slot player?

Recommended: Go to casinos that have the games that you enjoy playing. The above numbers mean that a slot machine has paid for itself after less than one year. Using a general estimate of building costs after less than two years the building is paid off as well. Allocate 1/3 a year for ongoing employee costs and you get one heck of profitable business.

That means that 1/4 of the floor being new games would be really phenomenal! That is unreasonable as Casinos need to make a profit. In fact the replacement cycle in the slot machine business is 10% to 20% a year which means every 10 to 5 years (a wide variation) the whole floor would be brand new.

As a player you can walk the casino floor and look at how many new games they have. If about 1/5 of them are a couple of years old or newer then you know you are getting a good deal for your gambling dollar.

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