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Best of Alan Krigman

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Gambling for Groceries: Is It an Idea whose Time Has Come?

13 July 2005

Yet another state has authorized a modified form of casino gambling. The Pennsylvania legislature has approved slot parlors. Some of the facilities will be associated with race tracks. Others will be self-contained establishments. Details have yet to be finalized. But, at the moment, there's no telling whether Pennsylvania punting will be an elegant upscale entertainment experience, a down-and-dirty shot at the lifestyle of the rich if not famous, or an amalgam blending the best or worst of each.

The lawmakers could care less. They merely want funds to funnel into the state coffers. This, to finance new government spending, balance the budget, and not add or raise direct taxes. Governor Rendell said that all Pennsylvanians already or will soon have easy access to some form of casinos in nearby states, anyway, so why not keep the money at home? Further, it's no secret that taverns galore from Philadelphia to Pittsburgh have illegal poker machines. Licensed operations would give the public a cut, and add oversight -- ostensibly to ensure the integrity of the games.

In their haste to hop the gambling gravy train, the politicians ignored a brilliant proposal by CASHCOW (the Committee to Augment Shoppers' Happiness by Compensating for Overextended Wallets). The plan was to link slot machines to cash registers at food market checkout aisles. When purchases are tallied, patrons get the opportunity to let fate pay the freight. CASHCOW's Gambling for Groceries games could be configured in either of two modes.

In one suggested approach, the state would set an edge based on the expenditures covered -- the payoff -- and also the likelihood of a customer scoring. It would be like betting the sales tax to win a shopping spree. The actual fee for the try would vary but the computer in the cash register would figure out the amount, as it now calculates tax. If you chose to bet, the cashier would ring it up, thereby activating the slot machine for you. Winning, you'd be home free. Losing, the bet would be added to your tab.

Assume the state wanted to earn 6 percent of the bill on the average. If your purchases came to $100, and the probability of winning was set at one out of 100, the gamble would cost you $7.00. The bet would be less if the prospects of winning were lower. For instance, $6.20 on a $100 tab for a chance of one out of 500, and $6.10 for one out of 1,000. The bet would also rise or fall in proportion to the size of the purchase to be settled.

CASHCOW's second method involves a standard bet, such as a dollar, of which the state earns a fixed portion. Solid citizens could feed their wagers directly into the slot machines. With groceries priced as they are these days, an extra buck would hardly be noticed. The theory is therefore that almost everyone would go for it, hoping to cover the whole tariff with chump change. Buyers could make multiple tries, since many would consider a few shots, at a buck each, worthwhile for a big enough bill. With this system, a fixed wager yielding different returns depending on the cost of purchases, odds of winning would be adjusted on the fly by the computer chip inside the device.

Here's an example. Say the state looked for an average of $0.50 on every dollar bet. For groceries worth $100, the chance of winning would be one out of 200. Half as big a bill, $50, doubles patrons' chances to one out of 100.

Any casino boss would advise the Pennsylvania people to pick the second option, and tell them to aim for more than $0.50 on the dollar. They know that few slot aficionados think about the chance of winning or the house's share as long as the bet is small. So takers won't be deterred if the state charges a buck and sets the machines to keep an average of $0.90 on the dollar bet. At this level the game would give shoppers one chance out of 1,000 to cover a $100 purchase, and one out of 2,000 if they had $200 worth of goods in their carts. A buck to be a pull away from erasing a $200 charge? Who wouldn't go for that? It's precisely as the prescient poet, Sumner A Ingmark, pithily predicted:

What ancients did by casting lots,
We'll do some day by playing slots.

Alan Krigman

Alan Krigman was a weekly syndicated newspaper gaming columnist and Editor & Publisher of Winning Ways, a monthly newsletter for casino aficionados. His columns focused on gambling probability and statistics. He passed away in October, 2013.
Alan Krigman
Alan Krigman was a weekly syndicated newspaper gaming columnist and Editor & Publisher of Winning Ways, a monthly newsletter for casino aficionados. His columns focused on gambling probability and statistics. He passed away in October, 2013.