Inside Asian Gaming

INSIDE ASIAN GAMING | June 2011 48 A slot manager recently installed two new banks of 10 slot machines each. Both were installed on the same day, are in the same area of the casino, and are the same denomination and number of lines. They even have similar features. Machine A won $300 per unit per day for the last 60 days, while Machine B earned just $200. The floor average is $170, so both games are performing well. After a careful analysis of the data he decides to not only add 10 more of the Machine B that won $170/day but to reduce Machine A by five units. Why would the slot manager add more of the weaker game and reduce the games that were generating $300 per unit? We will explore his reasoning shortly, but first let’s look at what the “win per unit” (WPU) measurement is all about. The figure can be expressed over any period of time, but typically it is expressed as WPU per day. This measurement, which is used in slots and to a lesser extent in table games, is calculated as follows: Total win ÷ Total Units ÷ number of days. It is not uncommon for a new game to be installed on a trial basis with the stipulation that it will only be purchased if the game can meet the floor average or exceed it by some certain amount. Often times this will be the only criterion on which a game is evaluated. It seems like a great measure and certainly the CFO will understand its meaning. After all, you can’t fake the cold hard cash that a game wins, and isn’t that what really matters most? While it is true that a game can not fake win, it can get lucky or unlucky, which is why operators will often look at the theoretical win of a game as well. This is the expected hold percentage times the handle on a slot machine or times the drop on a table game. The “U” in WPU is often ignored and can lead to misleading results. In our opening example, the slot manager decided to add more of the game that was generating $170 per day and reduce by five units the game that was generating $300 per day. The reason for his decision had nothing to do with win per unit obviously, but everything to do with game utilization. What he found after digging into the detail was that the bank of games generating $300 per unit per day rarely had more than three players, but they were all betting the maximum and would play for hours. This told him that he could likely generate the same win with just five games. Even though the win per unit would double to $600, the total contribution to the casino would be the same. The bank that was generating $170 per unit per day regularly had players on all ten games with players waiting to get a seat. Therefore, by adding 10 more games the casino was able to capture this business in a more efficient way. It is all too common for an operator to just assume that the number of machines originally installed on trial is the exact number of games the casino needs. Sometimes a bank of eight games may do 80% of floor average and all of the games are removed, when the proper decision may have been to keep four of the games and see the performance move up to 160% of floor average. This question of having the right number of units should not just be limited to new games, but should be applied to games that are being considered for removal as well as games that are steady performers month after month. Certainly other factors must be considered such as floor layout, game cost, depreciation schedule, gamemix, and trying to determine if a game contributes incremental win or if it just moves money from one side of the slot floor to the other. Win per unit is a good measure when it is coupled with other pieces of data such as theoretical win, utilization, handle, and the like, but taken as a stand-alone statistic it can be misleading. So next time you hear that a game is performing below floor average, you may want to look at the headcounts to determine if the game can be turned from a weakling to a star by removing some of the units. Todd Haushalter has worked as a dealer, run a scheduling department and opened properties, but mostly he is the guy who figures out ways to make major casinos more profitable—most notably Wynn Resorts, where he spent four years before joining Shuffle Master. Now, as Shuffle Master’s Director of Product Development, he travels the world working closely with casinos’ management teams to identify new ways to help make casinos more successful. Win Per Unit: Is it the Best Way to Measure Performance? By Todd Haushalter Feature Sometimes a bank of eight games may do 80% of floor average and all of the games are removed, when the proper decision may have been to keep four of the games and see the performance move up to 160% of floor average.