How many slots are there?

The full question is, how many legal slot machines are there in the United States? Thanks to an article in the always-accurate Gaming Today, I have a quick answer for you. Plus, you’ll get a wild guess for how much money they earn in a day and throughout the year.

According to Gaming Today(who rather vaguely cited “experts”), there are currently 800,000 slots in the US:

According to industry experts, the U.S. slot machine market should grow from about 800,000 machines to 900,000 machines over the next year.

Fueling growth will be the placement of machines in new jurisdictions such as Pennsylvania, Florida and Oklahoma.

In Pennsylvania, 10 manufacturers have submitted license applications to regulators. However, experts believe it will be late 2006 or early 2007 before the jurisdiction will be fully functional.

U.S. slot inventory to expand

Anyone remember the episode of Star Trek: The Next Generation where we found out that Data was “fully functional“? I guess Pennsylvanians can look forward to a happy 2007!

If there are 800,000 slots in the US today, and each averages $160/day in revenue (a rough estimate: in some places it is much higher but in others it is much lower), then simple math (my favorite kind) tells me that slot machines make somewhere in the neighborhood of $128 million a day and, by extension, $46.7 billion a year.

Given that, according to the American Gaming Association, the total 2003 revenues for commercial and Native American casinos (slots, tables, and everything else) was about $46 billion, this figure is impossible. So either there are fewer than 800,000 machines out there, or machines average far less than $160/day. Or I made a mistake in the arithmetic.

Assuming an average hold percentage of 8% (again, a rough estimate), we learn that Americans put $1.6 billion a day into slot machines, or about $584 billion a year.

There’s another way to figure it. I’d guess that, nationally, slots account for 80% of total casino revenue–it’s higher in some markets but lower in others. With the AGA’s numbers, that gives us total slot revenue of about $34.5 billion in 2003. Working backwards, I get a total of 472,602 slot machines. In this case, Americans only drop $1.2 billion a day into slots, or $431 billion a year.

When I started this post, I thought I’d give you, the reader, a nifty little factoid to impress your friends. Instead, I seem to have demonstrate just how difficult it is to state anything with certainty. Of course, if Gaming Today wasn’t so coy about the “experts” they quoted, I’d shoot them an email and get to the bottom of all these numbers.

At least my calculator is “fully functional.”

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