G2E: The Slot Floor vs. the (Lack of) Table Game Blockbuster

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You know that scene in Ocean's Thirteen where Willy Bank (Al Pacino) offers to take a casino dominoes game called 'Nuff Said with a presumed 14% house edge and put it on center showcase at the grand opening of his new casino in exchange for exclusivity?

That would never happen in real life -- or at least not with the way table games are being made.

Every year at the Global Gaming Expo, or G2E for short, in Las Vegas, table game creators from all corners of the earth -- or mostly just Shuffle Master (NAS: SHFL) -- bring new games aimed at capturing real estate on the casino floor. It's an annual double insult, really: Not only are these companies designing games that the gambler has no hope of beating, but they force the gambler to take the time to learn how to play them!

Not even the slot manufacturers are that presumptuous.

If you've missed G2E in any of the last five years, I'll spare you the trouble: If you've played three-card poker, you've basically played Shuffle Master's entire lineup of proprietary table games. Sure, you might get dealt four cards instead of three, or you might get to draw two cards instead of one or three cards instead of two. But for the most part, every new game Shuffle Master brings out is simply a repackaged version of a previous one, and with a house advantage in the neighborhood of about 2%.

This year, for example, Shuffle Master brought San Lo Poker, which is simply Pai Gow Poker where the player gets dealt six cards instead of seven, and sets three hands instead of two. Unfortunately, this is not the type of game that is going to inspire gamblers to flock to it. The reality is that people aren't going to play this game and go home and tell all their friends about it. Nor are they going to sit down with their friends and spend much time talking San Lo Poker "strategy" -- that is, unless their friends are dumb enough to play the game too.

The fact is, unless the game is beatable, the only actual strategy is not to play. And unless the game is beatable, we are never going to see another table game take on the popularity of blackjack.

Slots: the entertainment machines
While table games makers have not brought much to the table in terms of game design, slot machines have advanced light years as entertainment machines with a gambling component, rather than as pure gambling vehicles. Not only do slot machines continue to get better looking with bigger sounds, more lines per game, and more games per screen, but the slot manufacturers have also gotten more creative in terms of gameplay.

Bally Technologies (NYS: BYI) brought a variety of games such as Space Invaders, where the bonus round is an arcade game in which the player tries to score as many points as possible to put his or her name on the leaderboard, much like one might do on an arcade machine in a bar (or an actual arcade). There was another music-based bonus game much like Electronic Arts' (NAS: ERTS) Rock Band, in which a player presses the right button at the right time on a keyboard (for example) on the screen to score points and get on the leaderboard. What's important is that the player's score here has no bearing on the actual payout - otherwise, these skill-based contests would scare away potential players who are weaker at these games.

Indeed, the line between video games and slot machines continues to blur.

WMS Industries (NYS: WMS) continues to roll out games with bigger screens, bigger sounds, and now moving chairs in the next generation of their Sensory Immersion Gaming line. Australia's Aristocrat now has games featuring a sixth reel.

And along with their usual assortment of next-generation games and new blockbuster themes, one of International Game Technology's (NYS: IGT) new innovations is games in which the player can adjust the volatility to his liking. For example, within a single game, the player can hit a button and choose a low-volatility setting with more frequent but smaller wins, or a high-volatility setting with less frequent, larger wins -- or a setting in between.

Incidentally, last month, IGT announced a 30-day exclusive first-to-market agreement with MGM Resorts International (NYS: MGM) to place IGT's new Ghostbusters slots in MGM's Las Vegas Strip properties. So these Ocean's Thirteen kinds of deals do happen -- for slot manufacturers.

No blockbuster table games
There is a huge hole in game creation on the table games front. While slot machines have come a long way technologically speaking, the slot manufacturers as a group have also been very creative in enhancing actual gameplay, and have been able to create blockbuster titles like IGT's Wheel of Fortune games and WMS' Monopoly.

The same can't be said for table games makers.

Sure, companies like Shuffle Master in particular have been very successful -- technologically speaking -- in bringing electronic table games to the market. But in terms of actual game creation, the fact is that there hasn't been a blockbuster table game since blackjack. There wasn't one at G2E this year, and there probably won't be one until somebody brings something to the table that is theoretically beatable.

At the time this article was published Fool contributorJeff Hwangis a gaming industry consultant with HVS. He is an expert blackjack player, and the bestselling author of four books on pot-limit Omaha poker. Jeff owns shares of International Game Technology and WMS Industries.The Motley Fool owns shares of International Game Technology. The Fool has opened a short position in Bally Technologies. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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