- The author investigates why people get hooked on slot machines in Las Vegas.
- They initially speak to anti-gambling researchers who provide various myths about why people are attracted to slot machines.
- The author then visits a casino used for research on human behavior and discovers that slot machines exploit a behavior loop called the scarcity loop.
- The scarcity loop consists of opportunity, unpredictable rewards, and quick repeatability.
- This behavior loop is not only used in slot machines but also in various other industries such as social media, sports gambling, and the gig economy.
- The loop taps into our evolutionary instincts for finding food and the excitement of near misses.
- The author reflects on the addictive nature of gambling and wonders why people are willing to risk all their money on games of chance.

- Researcher studies pigeons and their gambling behavior
- Pigeons are given the choice between a game with predictable rewards and a game with random rewards
- Despite the predictable game offering more food, pigeons consistently choose the random game
- The researcher argues that this behavior is due to the pigeons' inability to understand the optimal strategy for obtaining the most food
- When placed in a more natural environment, pigeons choose the optimal game
- This behavior is compared to why humans may engage in risky gambling behavior

Taken from JRE #2039 w/Michael Easter:
https://open.spotify.com/episode/2Ohm79xyAa3X4WeOb3S3PH?si=c86a52d86c854d7e

So I live in Las Vegas, which happens to be a good town to think about why the hell can't we moderate.

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 airport and they're not sitting empty, right?

People are playing them around the clock.

So I'm like, what the hell is up with that?

Well, and it doesn't make sense because everyone knows the house always wins.

They just sit there and press the buttons and press the buttons and press the buttons and hope they make money.

Yeah, so I decide, all right, like I'm gonna find out how a slot machine works.

Why do people get hooked on slot machines?

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.

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.

Slot machines only play in the key of C, which relaxes people and relaxes their wallet.

And right angles activate the rational part of your brain.

And then I go to an actual casino, and there's right angles everywhere, right?

No clocks, but guess who else doesn't have clocks?

And then for the audio, the key of C, 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?

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.

So long story short, I talk to a handful of people in town and this leads me to this casino on the outside, outskirts of Las Vegas.

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.

So there's gambling companies that are involved, but also a bunch of big tech companies who are on the Fortune 500.

So I go there and it's like I said, it's a legit casino.

It's, I would say, I mean, it's not the size of a normal casino, like a sprawling strip 1.

It's probably about the size of your, everything you have here, maybe a little bigger, but they have hotel rooms.

Yeah, it's in this big 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 betting 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 behavior loop that I call the scarcity loop.

And this is basically a loop, looping behavior that when people do it, they tend to get hooked on it very easy.

It's got opportunity, unpredictable rewards, and quick repeatability.

So opportunity, you have an opportunity to get something of value.

In the case of a slot machine, it's money.

You know you're gonna 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 the slot machine game, when those reels are spinning, you could win nothing.

Or you could win a life-changing amount of money.

There's a fantastic range of things that could happen.

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, casinos, 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, it's in dating apps, even companies like gig work economy companies are using it to get people to work longer hours.

It's being leveraged by the financial industry in a lot of personal finance apps and on and on and on.

It's become, 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 you're talking about gig economy stuff, like you're talking about Uber and things along those lines?

So things like 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 we yeah, so like you might get say oh if you drive here, like you're whatever, you'll make X amount more money.

Oh, so they'll incentivize you, that they offer you more money to go to a different part of town?

Yeah, or dropping in cues that saying like, hey, this is where you're going to make more money today type of thing.

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 2 likes, which is like, oh, 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 this loop, the reason that we're so attracted to it, it goes back to evolution.

So I talked to this once I learned how this kind of loop pulls people in.

And it's really what slot machines lean on to get people to repeat the behavior.

He's this old school dude from the University of Kentucky who's been studying psychology since the late 60s.

And he described, he basically explained this likely goes back to evolution and finding food.

So if you think about hunter-gatherers, 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.

Point D, Oh my god, it's a giant berry bush full of food.

So that search, that repeat searching, really pushes us and grabs our attention because it used to help us survive in the past.

And there's even, I mean, if you want to get down the rabbit hole in it, there's even things like what are called near misses in slot machines, which is when you kind of almost win, right?

Barely passes by, or losses disguised as wins.

So that's when, let's say, you bet $1, and you quote unquote win $0.50.

So you don't lose everything, but you win $0.50.

Now, we tend to react to that as if we're winning when they study gamblers.

And that's also embedded in the search for food.

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.

Or you come upon 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, it mimics these sort of ancient pathways, more or less.

And gambling is, to me, is 1 of the most peculiar ones because it's so overwhelming for people that are hooked on gambling.

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 Zental 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 in like 2 minutes.

I said the same thing when I was talking.

Yeah, he so 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 peck they get say 15 units of food.

So peck, no food, peck, 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 peck, but it's random.

So you could go peck, peck, food, peck, peck.

The next 1 could be food, Peck, Peck, Peck, Peck, right?

So it's just kind of like a slot machine.

And they get more food playing the gambling game.

If you do the math, it makes a lot more sense to play the game where you get every other, right?

But what he finds is that the pigeons consistently play the slot machine game.

They're still putting in the effort to have to play the game.

So they know that if they just keep pecking, it doesn't hurt to peck, they're gonna get a bigger supply of 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 1 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 packs.

So just wants the larger pile of food, so it just keeps going.

It's not like they're risking all their food.

Well, the larger pile of food comes from the predictable rewards.

Yeah, every other is how you get the biggest pile of food.

But you don't get the biggest pile in 1 jump, 1 dump, right?

The 1 where it's every 5, it's a larger quantity of food.

They just can't say, oh, it's every other 1.

Well, all they see is that they're getting, you know, whatever, 15 units versus 20, is that what it was?

I don't think they're smart enough to figure that out.

I think they're just like, keep going, keep going.

He would argue, and a lot of biologists would, they would say, you know, there's this theory called the optimal foraging theory.

It 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 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 wheel 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.

When he puts them in a cage that mimics the wild, so it's this giant cage that has like roosts, 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.


Speaker 0: The Jerogen 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 airport and they're not sitting empty, right? People are playing them around the clock. So I'm like, what the hell is up with that?

Speaker 1: Just plays on your dopamine.

Speaker 0: Well, and it doesn't make sense because everyone knows the house always wins.

Speaker 1: Yeah, It's like a numbing thing. They just sit there and press the buttons and press the buttons and press the buttons and hope they make money.

Speaker 0: Yeah, so I decide, all right, like I'm gonna 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. 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.

Slot machines only play in the key of C, which relaxes people and relaxes their wallet. Casinos don't have any right angles. And right angles activate the 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. No clocks, but guess who else doesn't have clocks? Like most businesses, right? There's not clocks in Costco. Most restaurants.

Right. It's not normal to have clocks. And then for the audio, the key of C, 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. I gotta follow the money on this. So long story short, I talk to a handful of people in town and this leads me to this casino on the outside, outskirts of Las Vegas.

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?

Speaker 1: Who funds

Speaker 0: 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 go there and it's like I said, it's a legit casino.

Speaker 1: How big is it?

Speaker 0: It's, I would say, I mean, it's not the size of a normal casino, like a sprawling strip 1. It's probably about the size of your, everything you have here, maybe a little bigger, but they have hotel rooms.

Speaker 1: It's like a Walmart. Yeah. That big?

Speaker 0: Yeah, it's in this big 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 betting 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 behavior loop that I call the scarcity loop. And this is basically a loop, looping behavior that when people do it, they tend to get hooked on it very easy. So it's got 3 parts. It's got opportunity, unpredictable rewards, and quick repeatability. So opportunity, you have an opportunity to get something of value.

In the case of a slot machine, it's money. 2, unpredictable rewards. You know you're gonna 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 the slot machine game, when those reels are spinning, you could win nothing.

You could 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 3, 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, casinos, 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, it's in dating apps, even companies like gig work economy companies are using it to get people to work longer hours. It's being leveraged by the financial industry in a lot of personal finance apps and on and on and on. It's become, 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.

Speaker 1: And so when you're talking about gig economy stuff, like you're talking about Uber and things along those lines? Driving for Uber, yeah. And so how do they use that?

Speaker 0: So things like 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 we yeah, so like you might get say oh if you drive here, like you're whatever, you'll make X amount more money. And it sort of pops up unpredictably.

Speaker 1: Oh, so they'll incentivize you, that they offer you more money to go to a different part of town?

Speaker 0: Yeah, or dropping in cues that saying like, hey, this is where you're going to make more money today type of thing. 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 2 likes, which is like, oh, 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 this loop, the reason that we're so attracted to it, it goes back to evolution. So I talked to this once I learned how this kind of loop pulls people in. And 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's Thomas Sental. And he described, he basically explained this likely goes back to evolution and finding food. So if you think about hunter-gatherers, 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. And there's even, I mean, if you want to get down the rabbit hole in it, there's even things like what are called near misses in slot machines, which is when you kind of almost win, right? You might get lemons. Yeah, 2 lemons.

And the

Speaker 1: other lemon just Barely passes by.

Speaker 0: Barely passes by, or losses disguised as wins. Do you know what those are? No. So that's when, let's say, you bet $1, and you quote unquote win $0.50. So you don't lose everything, but you win $0.50.

Now, we tend to react to that as if we're winning when they study gamblers. And that's also embedded in the search for food. 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's the near miss.

Or you come upon 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.

Speaker 1: So they just trick the human reward system.

Speaker 0: Yeah, Yeah, it mimics these sort of ancient pathways, more or less.

Speaker 1: And gambling is, to me, is 1 of the most peculiar ones because it's so overwhelming for people that are hooked on gambling. It's such a mental health issue. It's such 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?

Speaker 0: Yeah this is a good question now this this Zental 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 in like 2 minutes. A pigeon? A pigeon, dude. He'll give them...

Speaker 1: That sounds cruel.

Speaker 0: I said the same thing when I was talking.

Speaker 1: Isn't life hard enough as a pigeon?

Speaker 0: Yeah, he so 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 peck they get say 15 units of food. So peck, no food, peck, 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 peck, but it's random. Right?

So you could go peck, peck, food, peck, peck. The next 1 could be food, Peck, Peck, Peck, Peck, 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 you get every other, right? Every other peck 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.

Speaker 1: Right, but they're not risking anything.

Speaker 0: They're not risking anything, right. So

Speaker 1: how's that gambling?

Speaker 0: They're still putting in the effort to have to play the game.

Speaker 1: Yeah, but that seems obvious. Like the rewards are greater. So they know that if they just keep pecking, it doesn't hurt to peck, they're gonna get a bigger supply of food.

Speaker 0: 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 1 where it's, you get food every other time.

Speaker 1: Right, but it's still not gambling because the pigeon just sees a larger pile of food with the more packs. So just wants the larger pile of food, so it just keeps going. It's not like they're risking all their food.

Speaker 0: Right, right.

Speaker 1: So I don't think it's a

Speaker 0: gambling thing. Well, the larger pile of food comes from the predictable rewards.

Speaker 1: Yes, right. If you do every other, right?

Speaker 0: Yeah, every other is how you get the biggest pile of food.

Speaker 1: But you don't get the biggest pile in 1 jump, 1 dump, right? The 1 where it's every 5, it's a larger quantity of food. Yeah, so you get 20. Yeah, See, that's not gambling.

Speaker 0: Why is it not gambling?

Speaker 1: Because it's just more effort. It's more effort to get a bigger pile.

Speaker 0: So he would argue that-

Speaker 1: They're just dumb. They just can't say, oh, it's every other 1. Well, all they see is that they're getting, you know, whatever, 15 units versus 20, is that what it was? Yeah. Yeah.

All they know is 20 units. Like, oh, this 1 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 going.

Oh, there's 20. Keep going, keep going, 20. But there's not a risk.

Speaker 0: 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. It 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 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 wheel 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 a basic cage. When he puts them in a cage that mimics the wild, so it's this giant cage that has like roosts, 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.

Speaker 1: Oh, interesting. Yeah. You

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How Casinos Are Able to Predict Human Behavior