Slot managers must continually modify their slot mix due to supplier innovation, consumer demand, competition and optimization. The pressure to grow same store revenues is intense for casino executives. Finding the right slot mix requires slot executives to organize and create accurate data, develop a set of standard reports and deploy advanced analytics to assist in gaining key insights into the operating performance of the floor.
Organizing Your Data
Effective decision making regarding slot performance requires the organization of useful data. The quantity of available data relating to slot performance is virtually unlimited. It is important to determine the usefulness and relevance of available data. Once this determination is made, the relevant data must be set in a logical manner. Frequently, casinos fail to ensure that the game configuration is accurate. Ensuring that your data is clean requires a persistent and watchful eye; but inaccurate data may cause the casino to make poor decisions or miss important opportunities. Keeping these key steps in mind will help you address your data requirements:
1. Verify that data in slot accounting reflects the reality of the floor.
2. Descriptions should be clear and concise.
3. Game elements should be consistently described.
4. Utilize all data fields to capture unique variables that describe the game.
5. Select a row identifier that clearly describes the position of the game on the floor.
Standard Slot Performance Reporting
Standard slot performance reporting will identify underperforming and overperforming products. A systematic report structure accompanied by ad hoc performance analysis will provide meaningful insights and improve decision making capability. Building a standard slot performance report structure is necessary before you can apply advanced tools and products. Advanced analytics have their place in the repertoire of any slot executive and supplement the standard reports.
To guide your work, you must define the unit of analysis and develop a report or methodology to approach the level of analysis that will help you find key insights. Examples of potential levels of analysis include the following questions: What is the performance of the department versus the performance of a specific game model? How are manufacturers’ games contributing to my overall performance? Should I examine a group of rows or a specific bank? These questions drive the reporting framework discussed below.
There are four key report types that can improve your perspective regarding the performance of your slot machines: 1) Slot Statistical Report, 2) Model and Location Reports, 3) Graphical Row Reports and 4) Flash Report. These reports assist in defining your unit of analysis for measuring performance (see Exhibit A).
These reports are designed to allow an operator to ask key questions regarding slot machine performance. These questions help determine the effectiveness of a strategy and assist with finding creative solutions to maximize slot performance. Below are four key questions that a well-designed approach to slot performance analysis can help address:
1. What is the proper mix of denominations on the casino floor?
2. How many video reel, mechanical reel and video poker games should I offer?
3. How many participation games should I offer and what percent of the revenues should I pay for them?
4. What is the proper mix of manufacturers by platform, cabinet type, betting configurations, and game theme, hold percentage, etc.?
Slot Statistical Reports
The slot statistical report is designed to allow you to examine revenue performance by denomination on a daily, monthly and annual basis. It provides insight into how your denomination revenues contribute to your total performance, and it is a basis for evaluating hold percent variances by denomination. The report also measures historical performance by comparing similar periods of time.
Model and Location Reporting
Model and location reports are designed to allow you to disaggregate performance into manageable sets of analysis that can be reviewed often. Model type is a means of identifying unique game configurations on the floor. Exhibit B identifies a list of potential characteristics that can help define a model number. Examining games by their unique configurations allows an operator to determine if a strategy is effective. Location reporting provides a simple view of how location impacts game performance. Combining model performance and location reporting together allows an operator to compare model performance averages versus individual performance at a specific location. Ranking models by a variety of parameters such as coin-in, games played, actual and theoretical win help an operator to make meaningful conclusions from the data.
Graphical Row Reporting
Graphical row reporting can be prepared using Excel. The report provides a graphical representation of the casino floor with associated row performance statistics. The banks can be identified with a variety of colors or graphics, all designed to allow the operator to see patterns within the data that may not be easily identified in traditional reporting means. The data and the map layout provide an operator with an intuitive and factual basis for evaluating floor design and associated performance.
The Flash Report
The flash report is designed to track the performance of changes to the slot floor. It is a simple variance report that compares the before and after of game changes. The slightest change to a game’s configuration should be tracked on a flash report to measure the impact of the new configuration. Essentially, the flash report is a report card on decisions made by management to alter the mix of slot machines.
The flash report is designed to allow an operator to close the information loop in changing slot mix, floor layout and new game launches. This decision loop was modified from a Harrah’s (now Caesars) Entertainment presentation, Concepts for Managing Slot Profitability at the Slot Manager Institute circa 2003. The basic ideas is that defining objectives, developing hypotheses and creating strategies for slot floor management are critical to efficiently deploying capital assets, such as slot machines, to maximize return on invested capital. The execution, measure and learn steps are designed to provide slot executives and general managers important information regarding the success of the strategies being deployed to achieve organizational objectives.
Keeping the decision loop in Exhibit C will help you decide on the level of analysis required to support the ongoing pursuit of maximizing revenues. The process requires operating discipline and can be incredibly rewarding, as successes are measured and accounted for and mistakes are identified for you to address in a positive and proactive manner. These building blocks can provide a great deal of insight into the performance of your department.