Turnover is still growing, but what happened to my net and hold %?
Most clubs and hotels are have been experiencing a retraction in their net and hold over the last year. Industry benchmarks have been confirming this trend throughout the past year, where net profit results are increasing just slightly or remaining flat while turnover levels continue to improve at a much higher rate. This is being caused by the larger numbers of multidenom, multigame, SAP, and premium link products with ongoing changes from a market of standalone games and a few premium links of a few years ago. The biggest difficulty is that we mainly remove older standalone games operating at 88-90% (RTP) to add in the newer SAP and link products operating at 91-93% (RTP) that the players clearly preference. We can’t change this if we want to improve our gaming results because we need these popular games, but we can manage it constructively.
These game packs are perfect for small venues, hotels, and outdoor gaming areas where space is at a premium. With a number of games in each multigame pack you can expand the variety of games for your players as well as include a few high and mid denomination games that you don’t have the space to offer as standalone. However, the return to player percentages on multigames are calculated as the total sum of the percentages for each individual game, divided by the number of games in the pack. If you have one or two games that dominate the play, such as a ‘5 Dragons’ and ‘Big Red’ that operate at a much higher return to player percentage than the other games, the manufacturers approved percentage for the game can be significantly different from the actual return you achieve. In most cases, the players aren’t silly and will play these games that give them the best return.
Strategic fix: Make sure you have a variety of these machines so you don’t end up with essentially the same games in a slightly different mix, and only keep the ones drawing the high turnover. In packs that offer high return games such as 5 Dragons (92-93%), remove as many of the standalone versions that you can that aren’t around or above floor average. The more turnover you can get through the machines the more stable the volatility becomes.
These games offer a much higher top level jackpot than a standard game and so drive play onto these machines particularly when the jackpot lifts. With themed games and overhead signage they also have a strong and noticeable presence on the gaming floor and should be featured in an obvious position to attract strong play
Strategic fix: These days a link will run effectively on 4-5 machines. The old days of 10 or many more machines on a link are gone, so when adding in a new 4-5 machine link check the performance of the larger, older links on your floor. If you can reduce the numbers on these old links (at around 92% RTP) and replace them with a new link (at around 92% RTP) you haven’t affected your retained percentage, have a new product to increase turnover and possibly improved turnover on the older link by reducing numbers.
There is much evidence at the moment that these small links are operating at the most effective net per machine result across the industry. Below is the comparison of these game types across NSW Clubs for August over the last 5 years (Data from Maxgaming). It shows the strength of the $Net per machine for Links well ahead of other product types so looking at converting some SAPs to a Link version should pay off for most clubs. The same results are being seen in QLD over the last 5 years.
Standalone Progressives (SAPs)
These games are the trickiest to deal with these days just because they are so prevalent. Most new games that are released by manufacturers now have on-screen jackpots. There are a couple of reasons for this: the most obvious is that these are the games the players like to play because they operate at a higher return to player percentage (RTP%), so they get a few more wins and can play for longer. This adds to the turnover as the players reinvest, but with a higher RTP%, the net hold is often less than a standalone game. The other reason for so many of these types of games in the market is that it adds some volatility back into the game to award players a better result in the feature by having an extra few percent go into the feature and jackpots rather than the base game.
Strategic fix: Many of these games are set at higher RTP% (91-93%) to allow for the extra payouts through the jackpots and we tend to remove standalone older games (at 88-90%) as trades against these SAP machines. This can make a 5% different to your hold for each one of these games you add to your floor. We absolutely need them on our gaming floors so the best way to deal with them is to ensure they are working effectively. Take a ranking report for a 3 month period and separate out all the SAP games to obtain a floor average just for them. Isolate any that are dropping down the turnover and net rankings, (you can use either expected or actual net over a 3 month period), and are in the bottom 25-30%, and order a game conversion to improve them. A small amount spent on game conversions could save you a lot of money in the long run.
Often these don’t get checked very frequently and if your turnover has improved since you put the link in you are probably giving away more than you wanted. Alternatively, if your turnover has dropped you are probably not giving away as much as you thought and the jackpots are no longer driving play or of interest to the players.
Strategic fix: Check these links every 6 months and adjust. You can often add more machines to an in-house link and increase a top level jackpot, but reduce the overall percentage of turnover that is going to a link to freshen it up.
Ante bet games
You don’t tend to notice these games on your floor. There are a lot of popular games of this type where your player pays to cover the lines (e.g. 25c) and then pays an ante bet (another 5c) to access different features or extra symbols. Some of the most popular games have this feature such as 5 Dragons and Jetsetter, and are often assumed to be standalone games but actually operate at a higher RTP% so they can effect your net hold.
Strategic fix: Similar to the SAP games you need to keep on top of game performance and make sure they are performing as well as possible.