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Class II: Is It Fair?

Electronic bingo games are becoming more sophisticated and more like traditional slot games.

When the Indian Gaming Regulatory Act of 1988 (IGRA) established the various classes of gaming permissible by Native American tribes on reservation lands, the law designated bingo and similar games under the heading of “Class II.” The classification was established to allow tribes to hold bingo games on their reservations, but it stipulated that “electronic aids” could be used to simulate bingo.

That stipulation led to electronic versions of the game of bingo, which eventually took the form of Class II-style slot machines, known as Bingo Games. The Class II Bingo Games would essentially be a game of bingo, with prizes drawn from the overall money wagered. Those prizes, however, would be displayed as reel results on the slot machines.

In recent years, those Class II bingo machines have become more and more like their traditional, or “Class III,” slot cousins in Las Vegas. The Seminole Hard Rock properties in Florida represent the state of the art in Class II sophistication. The central computer system, developed by a team headed by former IGT systems chief Lyle Bell (now the CIO for the Seminole Hard Rocks), was created with a singular purpose—to provide a player’s-club experience to simulate the Class III slot experience on a Class II floor. Meanwhile, Casino Operations Senior VP, Charles Lombardo—formerly slot operations VP at Caesars Palace—worked with the major slot manufacturers, who refined Class II technology to provide games that look and play like the traditional games.

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Though they are technically electronic bingo games, the Hard Rock’s slots mimic the traditional Las Vegas-style games in every way. Other than the LCD screen that shows the bingo patterns appearing with every spin, it is hard to tell the difference.

How do they make bingo games behave like slot machines? And how are the payback percentages determined? The answer to both can be summed up in one word: mathematics. The Class II electronic bingo games at the Hard Rock are programmed with mathematical calculations to mimic Class III games as closely as possible while remaining within the definition of Class II bingo that is contained in IGRA.

Under IGRA, a Class II game must have a draw of bingo balls, and must result in what is called a “game-ending pattern.” That is a pattern of numbers—two, three, four in a row; diagonal, vertical, four corners of the bingo card, etc.—that ends the game with a winning result.

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According to Lombardo, this occurs continuously. “We have a 20-millisecond window, and anyone (in the casino) pushing the Play button during that window is put in the game for that common ball draw,” he explains. “It must be at least two players, but the maximum is unlimited. If it is a minimum of two, one of them gets a bingo—a winning pattern.” He says every ball draw results in at least one bingo.

How do the payback percentages work? One of two ways, says Lombardo. In one style of game, the calculations relate to the stack of possible outcomes loaded into the central computer. In this style of game, there is always a 50-percent hit frequency—one of every two spins on average results in a bingo, with a prize determined from a finite pool of outcomes loaded into the computer. When the bingo game is over, the computer selects a prize from the top of an electronic “stack” and feeds it to one of the games with a winning outcome. To the player, it looks, for instance, like a mixed-bar win for $5. That just means a $5 prize has been awarded from the results of the bingo game.

The overall payback percentage in this case is governed by how many results equal to each prize amount are included in the finite stack of prizes. Just like the universe of numbers from which the random number generator in a regular slot selects reel outcomes, the payback percentage here is determined by the universe of prizes available for each winning result. The hit frequency is always 50 percent, but the payback percentage is determined by how many $2 prizes, how many 75-cent prizes, how many $1,000 prizes, and so on, are loaded into the program.

In a multiline video bingo game, this system results in a game virtually indistinguishable from that nine-line game in the Vegas casino that has a 50-percent hit frequency. According to Lombardo, though, this method is also used on some of the traditional single-line, three-reel slots. In this case, the 50-percent frequency still stands, but not every win is a traditional reel combination. Because traditional games like Blazing 7s or Red, White & Blue generally have hit frequencies around 14 percent for the seven or eight possible winning combinations in the pay schedule, a 50-percent frequency would be impossible and still have the game make money for the casino.

To remedy this, Lombardo explains, “we came up with a bonus feature.” Fourteen-percent of results in the pool will be actual reel combinations, and the other 36 percent of the winners will yield a bonus symbol on the reels that will accumulate. When you accumulate 25 of those symbols, you win one bonus credit. Therefore, you still have the 50-percent frequency, but your frequency of reel wins is similar to what it is in the traditional Class III versions of those games.

In the other style of game, the odds of each winning bingo pattern is matched to the odds of each paying combination in the slot game. “We figured out the odds of hitting certain patterns on the bingo card,” Lombardo explains, “and we take those bingo patterns and plug them right into the payout scheme to replicate any Class III game.” Drawing from millions of possible patterns on a bingo card, programmers can match the odds of landing any given combination of symbols on a slot machine. In this way, each chosen bingo pattern can trigger a certain payout combination. Hit frequencies and percentages in this case will match a traditional slot exactly.

But what are those payback percentages, and how do we know they are fair? As you may know, the Seminole tribe is a sovereign nation, and its casinos are not subject to state regulation or public reporting of payback percentages. How do we know we’re getting a fair shake?

We know we’re getting a fair shake because tribal casinos must compete with all other casino choices, says Lombardo. “We are competitive with all Class III markets,” he says. “We’re not doing anything differently (with percentages) than Atlantic City, Las Vegas or Mississippi. We are competitive with any casino in the country.” He adds that he takes average bets in lower denominations into account when determining the payback percentage he wants to offer. “If I am requiring players to cover the lines on a 20-line nickel game, that’s a dollar bet,” says Lombardo. “I take that into consideration when I figure out the payback percentage I offer.”

Lombardo adds that tribal casinos have obligations to both the players and the slot manufacturers to keep the games fair. “Over the long hall, any player is going to know if you screw with percentages; they’ll know the difference,” he says. “And, a manufacturer is not going to give us their title if we are going to misrepresent that title (with low payback). We don’t want to kill a title.”

It is that respect for the player—and obligation to represent a manufacturer’s title fairly—that should make you approach the slot experience at the Hard Rock or other large Class II tribal casinos with expectations similar to those you have when playing slots in most major jurisdictions. In other words, you are likely to get a fair shake. They know that if you don’t, you will go elsewhere.

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Class II Video Poker

We have noted before that video poker in a Class II tribal casino does not work in the same manner as video poker in a traditional casino. While this is true, it does not mean that it is unfair, or that you can’t win.

The result of any Class II video poker hand is predetermined by the result of the ball draw in the bingo game on the little screen. In some jurisdictions, you will be required to touch the screen to daub the bingo card and claim your prize.

Those results are determined by winning patterns on the bingo card. Using one of the two methods described above, a winning pattern will either trigger one of a stack of predetermined prizes or a corresponding video poker hand, according to the odds. The odds are calculated to be similar to the odds of a standard video poker game. You won’t find the player’s-advantage paytables in Class II, but the return represented by the pay schedule you do see will be similar to the return of that game in a traditional casino.

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The real difference lies in the importance of perfect strategy. A Class II video poker game is actually better for the strategy novice, because the game will often correct your bonehead moves. If the bingo result determines you win the a certain prize, you will get that prize even if you make the wrong choice, through a special feature on the game.

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For instance, on the IGT version of Class II video poker, let’s say your winning bingo pattern translates to the prize for four-of-a-kind, and you are dealt 10-c J-c Q-c J-h J-s. Even if you screw up and decide to go for the royal, the game will not let you. A “Genie” will appear on the screen and change your hand to four Jacks—for the quad prize that corresponds to the bingo pattern you got.

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It’s better for the novice because it shows you the optimal strategy by changing your choice to match the bingo win. Other than that, the Hard Rock’s Lombardo says the games work like the standard versions of video poker—again, because the Class II casino will not risk “killing a manufacturer’s title.” “A lot of players may not know the difference between Class II and Class III,” he says. “That’s why we replicate the video poker paytables as closely as possible. It would be a killer for us to do anything else.”