Many slot machines throughout the world only accept bills. However, there are still some classic coin-based slots in Las Vegas.
Such machines are typically found in the downtown gambling joints, which use coin-operated slots to appeal to gamblers’ nostalgic side. El Cortez is the best-known Vegas casino that features a slew of coin-based machines.
However, El Cortez and other casinos that offer these slots are facing a dilemma. Gambling in the US has mainly moved towards a cashless society. A coin shortage has only exacerbated the problem.
Will this proposed transition away from cash along with a change shortage eventually wipe out coin-operated slot machines? I’ll discuss more on the crisis that’s affecting certain casinos along with if coin-based slots will survive the cashless trend.
The Scramble for Quarters, Dimes, and Nickels
This isn’t the first time that the US has gone through a change shortage. It suffered a similar event in the late 1950s and early 60s.
Back then, though, America completely relied on cash and had more of it per capita. Additionally, there was no pandemic causing bank and business closures in the 50s and 60s. Combine the pandemic with an increased population that uses money, and it’s not hard to see why there are fewer coins than ever.
The El Cortez epitomizes the struggle that casinos now face in keeping their coin-operated machines stocked. Adam Wiesberg, the casino’s general manager, talked with the Las Vegas Sun about struggles he faces in scrambling for change.
Wiesberg had around $120,000 in quarters, nickels, and 50-cent pieces before the pandemic hit in March 2020. This amount was enough to cover the casino’s 100 coin-based slot machines.
Once Nevada Gov. Steve Sisolak ordered Vegas casinos to close last year, El Cortez put around $90k worth of coins in the bank. They expected to get the change back rather quickly once COVID restrictions lifted, but it hasn’t happened.
“Our first coin order that we did after reopening, in July, we ordered $30,000 in quarters,” Wiesberg explained. “When the Brinks people came, they brought us just $500 in quarters.”
El Cortez’s struggles highlight what every casino with coin-operated slot machines is dealing with. People aren’t spending as much coming out of the COVID restrictions, meaning fewer coins are going around.
If this continues, casinos won’t have any other option than to go to coinless slots.
Cashless Trend Gains Steam
The cashless trend is the other big issue that’s threatening coin-based slots. Many governments are studying digital currencies or have even rolled them out already.
Cryptocurrencies are also drawing interest in the land-based gaming industry. Already popular at online casinos, crypto would provide gamblers with another payment option in brick-and-mortar casinos.
International Gaming Technology (IGT), the largest developer of slot machines, has patented a unique Bitcoin ATM. These machines will let gamblers use their wallets to send Bitcoin (BTC) to the casino.
Of course, BTC and other cryptocurrencies can take hours or days to arrive. Therefore, the given casinos will essentially let players gamble on credit while the crypto is en route.
ATMs and slots bill acceptors have already greatly diminished the need for coin-operated slot machines. Most gamblers simply put bills into slot machines to obtain credits these days.
Crypto and digital currencies are poised to hit brick-and-mortar casinos in the future. The introduction of these digital payments could further diminish the need for coin-operated machines.
Don’t Expect Cash & Coins to Disappear Any Time Soon
It feels like the American financial system is rapidly changing and moving away from cash. This feeling creates the possibility that there won’t be any more change to feed coin-based slots.
Even with digital currencies and crypto on the rise, though, cash won’t be going away for the foreseeable future. Federal Reserve Chairman Jerome Powell recently said that even if a digital dollar comes about, it wouldn’t eliminate cash.
Speaking at a conference in Switzerland, Powell highlighted a point made by a Bank of International Settlements report. The report noted the following:
“One of the three key principles highlighted in the report is that a CBDC needs to coexist with cash and other types of money in a flexible and innovative payment system.”
In short, talk of central bank digital currencies (CBDCs) is more about countries remaining competitive with each other. Given that China now has a digital yuan, other nations like the US don’t want to fall behind in the financial technology sector.
At the same time, though, countries realize that they can’t simply eliminate cash overnight. That said, no immediate plans exist for getting rid of cash and coins.
Coin Shortage Figures to End Soon
US Treasury Secretary Steven Mnuchin is urging Americans to either spend change or take it to banks. His goal is to get coins circulating again and have things return to normal.
Casinos are also helping in this matter. El Cortez, for example, used to charge a 5% fee when gamblers used its coin-counting machines. These machines print out a ticket that players can cash out at the cage.
Given the lack of change going around, though, El Cortez has eliminated this fee for the time being. They want to encourage gamblers to use coins as much as possible.
“People can come to El Cortez and change out your piggy banks for free, which has helped increase the amount of coin we’re bringing in,” said Wiesberg. “We used to empty those machines much less frequently, but now we’re emptying them every day.”
Most banks are also waving fees that they might normally charge to count coins. This move should also get more nickels, dimes, and quarters circulating throughout the economy.
Coin Based Slot Machines Should Be Around for At Least Another Decade
El Cortez certainly isn’t one of Vegas’ more-glamorous casinos. Instead, this gaming venue prides itself on offering a vintage feel that hearkens back to the 1960s and 70s.
Coin-operated slot machines are a large part of this experience. With around 100 such games, El Cortez features far more coin slots than any other casino.
They’re not the only Vegas gambling establishment that’s hoping cash remains a viable part of the economy. The Henderson-based Skyline casino features 88 coin-operated machines.
Sam Kiki, Skyline’s general manager, had to purchase a coin-sorting machine at one point so that he could recycle the incoming change. This machine cost Skyline $10,000.
The good news for El Cortez, Skyline, and other casinos that own coin-based slots is that cash will stick around. The US and other governments have no immediate plans to get rid of cash and change.
Furthermore, the coin shortage shows signs of letting up. People are encouraged to spend their coins now that counting fees have been lifted at banks and casinos.
The US Mint is also producing more coins than ever before. Prior to the pandemic, the Mint was making around 1 billion coins per month.
It’s now ramped this production up to 1.65 billion per month ever since. This influx of change is gradually working to reduce the shortage.
Taking everything into consideration, change should be available for years to come. Subsequently, coin-operated slot machines will also be able to stick around alongside its digital slot machine counterpart.
It’s difficult to pinpoint exactly how long coin slots will exist in the gaming industry. Based on comments by Powell and the Bank of International Settlements, though, coins should be around for years to come. That said, coin-based slot machines will probably be available for at least another decade—if not much longer.
Assuming you enjoy pumping quarters and nickels into slots, then you don’t have to worry about this experience going away any time soon.
Governments are still in the early stages of CBDCs. Furthermore, brick-and-mortar casinos haven’t begun accepting cryptocurrencies either.
Any major changes to the financial system will likely take at least a decade to occur. Even with CBDCs being rolled out, the changes figure to be subtle and gradual.
In summary, nickels, quarters, 50-cent pieces, and dollar coins will be around for a number of years. Subsequently, Vegas casinos can keep offering coin-based slot machines for years too.