How Casinos Are Able to Predict Human Behavior

The jogan Experience so I live in Las Vegas which happens to be a good town to think about why the hell can't we moderate right now when you live there you see all kinds of wild stuff right but to me what's always been the strangest has been the slot machines so you've spent time in Vegas yeah it's like they're in the casinos obviously but they're in the gas stations the grocery stores the restaurants the bars and the airp port and they're not sitting empty right people are playing them around the clock yeah so I'm like

what the hell is up with that just plays in your dopamine well and it doesn't make sense because everyone knows The House Always Wins yeah it's not uh it's like a a numbing thing they just sit there and press the buttons and press the buttons and press the buttons and hope they make money yeah so I I decide all right like I'm going to find out how a slot machine works why do people get hooked on slot machines that's the question and so I go into journalist mode and I start making calls now the first

group of people that I call turns out to be a dead end so who I call are people who are effectively anti-gambling researchers okay so these are researchers who have a very anti-gambling bent and they tell me all sorts of sort of strange things they're like oh it's because casinos don't have clocks they're like these myths we've all heard casinos don't have clocks uh slot machines only play in the key of C which relaxes people and relaxes their wallet uh casin don't have any right angles and right angles uh activate their rational part of your

brain and so I go okay and then I go to an actual casino and there's right angles everywhere right the screens are right angles uh no clocks but guess who else doesn't have clocks like most businesses right there's not clocks in Costco most restaurants right yeah it's not normal to have clocks and then for the uh the audio the key ofc I call up a slot machine audio composer now this is a real job you can have in Las Vegas right and this guy goes where the hell do you hear that he's like I use

all keys so I realized that the problem that I'm encountering is that I have called people who want us to stop gambling I need to call people who want us to start gambling right I got to follow the money on this so long story short I talk to handful of people in town and this leads me to uh this casino on the outside outskirts of Las Vegas I it's brand new it's Cutting Edge but the catch is that it's not open to the public so this place is basically a living breathing casino but it's used

entirely for research on human behavior what yeah so really who funds that 73 different companies so there's gambling companies that are involved but also a bunch of big tech companies who are on the Fortune 500 so I I go there and it's it's like I said it's a legit Casino how big is it it's um I would say I mean it's not the size of a normal Casino like a sprawling strip one it's probably about the size of your everything you have here maybe a little bigger but they have hotel rooms it's like a Walmart

that big yeah it's in this big um office building basically and they're basically looking at how everything that happens in a casino affects human behavior so how does room design and the technology we're using in rooms affect Behavior how does Bing with say an AI bot versus an actual human impact betting now when I'm there I meet with to bring it back to slot machines I meet with a guy who designs slot machines so the reason that these things are so entrancing to people it tracks back to this uh Behavior Loop that I call the

scarcity Loop and this is a basically a loop looping behavior that when people do it they tend to get hooked on it very easy so it's got three parts it's got opportunity unpredictable rewards and crook repeatability so opportunity you have an opportunity to get something of value so in the case of a slot machine it's money right uh two unpredictable rewards you know you're going to get the thing of value if you continue the behavior but you don't know when and you don't know how valuable it's going to be so with a slot machine game

when those reels are spinning you could win nothing you can basically lose your money you could win a couple dollars or you could win a life-changing amount of money there's a fantastic range of things that could happen and then three uh quick repeatability you can immediately repeat the behavior so with slot machines the average player plays about 16 games a minute and that's different from all other Habits Like most habits you don't immediately repeat them now the reason that people are so interested in this companies cin knows is because that this sort of three-part system

I just laid out it can get people to repeat a lot of other behaviors too so it's in social media it's in sports gambling uh it's in dating apps even companies uh like gig work economy companies are using it to get people to work longer hours it's being leveraged by the financial industry and a lot of personal finance apps and on and on and on it's become uh it's been embedded in so many of the products even institutions that influence people's lives because it is so captivating to us we tend to get hooked on this

three-part system and so when when you're talking about like gig economy stuff like uh you're talking about like uber and things along those lines driving for Uber and so how how do they use that so things like um unpredictable rewards get put up in front of a driver to get them to drive into an area of town that Uber might want them to be in there's also unpredictable rewards what yeah so like you might get um say oh if you drive here like your whatever will you you'll make x amount more money right it sort

of pops up unpredictably also they'll they'll incentivize you that they they offer you more money to go to a different part of town yeah or dropping in cues at saying like hey this is where we are you're going to make more money today type of thing oh um if you think about it in terms of something like social media it's like the opportunity is to get say status or likes or whatever it is right and then say a person posts and then the rewards become totally unpredictable right you might get two likes which is like

H that wasn't great or you might get hundreds of likes which is like oh my God that's amazing it's the same exact architecture as a slot machine and then you check and recheck you're repeating the behavior all day and um this Loop the reason that we're so attracted to it it goes back to Evolution so I talked to this uh once I learned how this kind of loop pulls people in it's really what slot machines lean on to get people to repeat the behavior I call up a psychologist he's this old school dude from the

University of Kentucky who's been studying psychology since the late 60s his name is Thomas cental and um he describe he basically explained this likely goes back to Evolution and finding food so if you think out Hunter gathers the thing you have to do every day is find food but it's a random it's random whether you're going to find the food or not so you go to point a you don't find any food go to point B you don't find any food you go to point C no food Point D oh my God it's a giant

berry bush full of food and that saves your life right so that search that repeat searching really pushes us and grabs our attention because it used to help us survive in the past oh and there's even I mean if you want to get down the rabbit hole in it there's even um things like what are called near misses in slot machines which is when you kind of almost win right you might two lemons yeah two lemons other lemon just barely passes by barely passes by or losses disguised as wins do you know what those are

no so that's when uh let's say you bet $1 and you quote unquote win 50 so oh right so you don't lose everything but you win 50 cents now we tend to re react to that as if we're winning when they when they study uh gamblers and that's also embedded in the search for food right you might let's say you're hunting you're like oh we got a big kill on our hands and then you whiff and the animal's on its way it's like damn that is a that's a right that's the near Miss MH um

or you come up on a berry bush and let's say it took you you burned 500 calories looking for this thing and it only contains 200 calories worth of food and so all of these sort of evolutionary parts of this system that we used to fall into as we evolved are now in slot machines and in turn now being used by a lot of big tech companies and different Industries so they just trick the human reward system yeah yeah mimics these sort of ancient Pathways more or less and gambling is to me is one of

the most peculiar ones because um it's so overwhelming for people that are hooked on gambling it's such a mental health issue it's such a an addiction and when you see people that are just like chasing it and they just can't stop it's like I always wonder like what pathway is being hijacked like what what is about human beings that want to risk like literally all of their money on a roll of the dice or on a spin of the roulette wheel or on a hand of cards like what is that yeah this is a good

question now this this Zen guy that I told you about he does a lot of research on pigeons so he can basically turn a pigeon into a degenerate Gambler and like two minutes he'll give a pigeon a pigeon dude he'll give them yeah I said the same sounds cruel I said the same thing when I was talking to isn't life hard enough as a pigeon yeah he uh so he he'll get pigeons who you know they live in these cages and he'll give them the option to play a game where they every other peack they

give say 15 units of food so pack no food pack 15 units of food but then they have an option to play a second game and this second game is very much a gambling game in that they get food about every fifth peack but it's random right so you could go PE peack food PE PE the next one could be food PE PE PE PE right so it's just kind of like a slot machine and they get more food playing the gambling game they get 20 units if you do the math it makes a lot

more sense to play the game where where you get every other right every other peack is getting you food it adds up to a lot more food but what he finds is that the pigeons consistently play the slot machine game 97% of pigeons will choose that game right but they're not risking anything they're not risking anything right but it's still how's that gambling they're still putting in the effort to have to play the game yeah but that seems obvious like the the rewards are greater so they know that if they just keep pecking it doesn't

hurt to Peck they're going to get a bigger supply food they don't get a bigger supply though because they'll get 15 every other pack versus 20 every fifth pack so if you put in 100 packs you're going to get more food playing the one where it's you get food every other time right but it's still not gambling because the pigeon just sees a larger pile of food with the more pecs so just wants the larger pile of food so just keeps going it's not like they're risking all their food right right um so I don't

think it's a gambling thing well the larger the larger pile of food comes from the predictable reward yes right if you do every other right yeah every other is how you would get the biggest pile of food but you don't get the biggest pile in one jump one dump right the one where it's every five that's a larger quantity of food yeah so you'd get 20 yeah see that's not gambling why is it not gambling because it's just more effort it's more effort to get a bigger pile so he would argue that they're just dumb

they just can't say oh it's every other one well all they see is that they're getting you know whatever 15 units versus 20 is that what it was yeah yeah 15 vers all they know is 20 units like oh this one gives 20 units just keep pecking I don't think they're smart enough to figure that out I think they're just like keep going keep Oh's 20 keep going keep going 20 but there's not a risk so here's what I'll tell you he would argue and a lot of biologists would they would say you know there's

this Theory called the optimal foraging Theory says that animals will expend the least amount of energy to get the most amount of food all right so over time they're expending a lot less energy to get get more food and so here's where it gets interesting though is that to sort of bring it back to why do people fall into this why would someone bet their entire fortune on a roulette will or whatever is that when he will put pigeons in a sort of wild environment so where he keeps them is in these pigeon cages where

they kind of live alone it's you know it's a basic cage when he puts them in a cage that mimics the wild so it's this giant cage that has like roof it's got Cliffs it's got other pigeons it's very much like they would have to live in the wild and then he throws them back to choose a game they start choosing the optimal game oh interesting yeah