How Casinos Are Able to Predict Human Behavior
How Casinos Are Able to Predict Human Behavior
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00:00 Now, when you live there, you see all kinds of wild stuff,
00:04 right?
00:05 But to me, what's always been the strangest
00:08 has been the slot machines.
00:09 So you've spent time in Vegas.
00:10 Yeah.
00:11 It's like, they're in the casinos, obviously.
00:13 But they're in the gas stations, the grocery stores,
00:17 the restaurants, the bars, and the airport.
00:20 And they're not sitting empty.
00:22 Right.
00:23 People are playing them around the clock.
00:25 Yeah.
00:25 So I'm like, what the hell is up with that?
00:28 It just plays in your dopamine.
00:30 Well, and it doesn't make sense, because everyone knows
00:32 the house always wins.
00:33 Yeah, it's like a numbing thing.
00:37 They just sit there and press the buttons,
00:39 and press the buttons, and press the buttons,
00:41 and hope they make money.
00:42 Yeah.
00:42 So I decide, all right, I'm going
00:45 to find out how a slot machine works.
00:46 Why do people get hooked on slot machines?
00:48 That's the question.
00:50 And so I go into journalist mode, and I start making calls.
00:53 Now, the first group of people that I call
00:55 turns out to be a dead end.
00:57 So who I call are people who are effectively
00:59 anti-gambling researchers.
01:01 So these are researchers who have a very anti-gambling bent.
01:04 And they tell me all sorts of strange things.
01:07 They're like, oh, it's because casinos don't have clocks.
01:10 They're like these myths we've all heard.
01:12 Casinos don't have clocks.
01:14 Slot machines only play in the key of C, which relaxes people
01:17 and relaxes their wallet.
01:19 Casinos don't have any right angles,
01:21 and right angles activate the rational part of your brain.
01:26 And so I go, OK.
01:28 And then I go to an actual casino,
01:29 and there's right angles everywhere.
01:32 The screens are right angles.
01:35 No clocks, but guess who else doesn't have clocks?
01:38 Like most businesses, there's not clocks in Costco.
01:41 Most restaurants.
01:42 Right.
01:43 It's not normal to have clocks.
01:44 And then for the audio, the key of C,
01:48 I call up a slot machine audio composer.
01:50 Now, this is a real job you can have in Las Vegas.
01:53 And this guy goes, where the hell do you hear that?
01:55 I was like, I use all keys.
01:58 So I realized that the problem that I'm encountering
02:01 is that I have called people who want us to stop gambling.
02:06 I need to call people who want us to start gambling.
02:09 I've got to follow the money on this.
02:11 So long story short, I talked to a handful of people in town,
02:14 and this leads me to this casino on the outskirts of Las Vegas.
02:19 That's brand new.
02:20 It's cutting edge.
02:21 But the catch is that it's not open to the public.
02:24 So this place is basically a living, breathing casino,
02:27 but it's used entirely for research on human behavior.
02:30 What?
02:31 Yeah.
02:31 So--
02:32 Really?
02:33 Who funds that?
02:34 73 different companies.
02:36 So there's gambling companies that are involved,
02:39 but also a bunch of big tech companies
02:40 who are on the Fortune 500.
02:43 So I go there, and it's like I said, it's a legit casino.
02:49 How big is it?
02:50 It's-- I would say--
02:52 I mean, it's not the size of a normal casino,
02:54 like a sprawling strip one.
02:56 It's probably about the size of your--
02:59 everything you have here, maybe a little bigger.
03:02 But they have hotel rooms.
03:03 It's like a Walmart.
03:05 Yeah.
03:06 That big?
03:06 Yeah.
03:07 It's in this big office building, basically.
03:09 And they're basically looking at how
03:14 everything that happens in a casino affects human behavior.
03:17 So how does room design and the technology we're using in rooms
03:22 affect behavior?
03:23 How does betting with, say, an AI bot
03:26 versus an actual human impact betting?
03:29 Now, when I'm there, I meet with--
03:31 to bring it back to slot machines,
03:32 I meet with a guy who designs slot machines.
03:36 So the reason that these things are so entrancing to people,
03:39 it tracks back to this behavior loop
03:42 that I call the scarcity loop.
03:44 And this is basically a loop, looping behavior
03:47 that when people do it, they tend
03:49 to get hooked on it very easy.
03:51 So it's got three parts.
03:53 It's got opportunity, unpredictable rewards,
03:57 and correct repeatability.
03:58 So opportunity, you have an opportunity
04:01 to get something of value.
04:02 So in the case of a slot machine, it's money.
04:05 Two, unpredictable rewards.
04:08 You know you're going to get the thing of value
04:09 if you continue the behavior.
04:11 But you don't know when.
04:13 And you don't know how valuable it's going to be.
04:15 So with a slot machine game, when those reels are spinning,
04:18 you could win nothing.
04:20 You could basically lose your money.
04:21 You could win a couple of dollars.
04:23 Or you could win a life-changing amount of money.
04:25 There's a fantastic range of things that could happen.
04:28 And then three, quick repeatability.
04:30 You can immediately repeat the behavior.
04:32 So with slot machines, the average player
04:35 plays about 16 games a minute.
04:39 And that's different from all other habits.
04:41 Like most habits, you don't immediately repeat them.
04:44 Now, the reason that people are so interested in this,
04:48 companies, casinos, is because this sort of three-part system
04:52 I just laid out, it can get people to repeat
04:55 a lot of other behaviors too.
04:57 So it's in social media.
04:59 It's in sports gambling.
05:02 It's in dating apps.
05:04 Even companies like gig work economy companies
05:07 are using it to get people to work longer hours.
05:10 It's being leveraged by the financial industry
05:12 and a lot of personal finance apps, and on and on and on.
05:17 It's been embedded in so many of the products, even
05:22 institutions, that influence people's lives,
05:24 because it is so captivating to us.
05:26 We tend to get hooked on this three-part system.
05:31 And so when you're talking about gig economy stuff,
05:35 you're talking about Uber and things along those lines?
05:37 Driving for Uber.
05:38 And so how do they use that?
05:41 So things like unpredictable rewards
05:44 get put up in front of a driver to get
05:47 them to drive into an area of town
05:49 that Uber might want them to be in.
05:51 There's also--
05:51 Unpredictable rewards?
05:53 Yeah, so you might say, oh, if you drive here,
05:57 whatever, you'll make x amount more money.
06:01 And it sort of pops up unpredictably.
06:02 Oh, so they'll incentivize you?
06:04 They offer you more money to go to a different part of town?
06:07 Yeah, or dropping in cues that saying, hey,
06:10 this is where you're going to make more money today
06:12 type of thing.
06:14 If you think about it in terms of something
06:18 like social media, it's like the opportunity
06:20 is to get, say, status or likes or whatever it is, right?
06:23 And then, say, a person posts, and then the rewards
06:27 become totally unpredictable.
06:29 You might get two likes, which is like, oh, that wasn't great.
06:33 Or you might get hundreds of likes, which is like, oh my God,
06:35 that's amazing.
06:37 It's the same exact architecture as a slot machine.
06:39 And then you check and recheck.
06:41 You're repeating the behavior all day.
06:43 And this loop, the reason that we're so attracted to it,
06:49 it goes back to evolution.
06:52 So I talked to this--
06:53 once I learned how this kind of loop pulls people in,
06:56 and it's really what slot machines lean on to get people
06:58 to repeat the behavior, I call up a psychologist.
07:03 He's this old school dude from the University of Kentucky
07:06 who's been studying psychology since the late '60s.
07:09 His name's Thomas Sental.
07:11 And he described-- he basically explained
07:15 this likely goes back to evolution and finding food.
07:18 So if you think about hunter-gatherers,
07:21 the thing you have to do every day is find food.
07:23 But it's random whether you're going to find the food or not.
07:27 So you go to point A, you don't find any food.
07:30 Go to point B, you don't find any food.
07:33 You go to point C, no food.
07:35 Point D, oh my God, it's a giant berry bush full of food.
07:39 And that saves your life, right?
07:41 So that search, that repeat searching,
07:44 really pushes us and grabs our attention
07:47 because it used to help us survive in the past.
07:50 And there's even--
07:51 I mean, if you want to get down the rabbit hole in it,
07:53 there's even things like what are called near misses
07:58 in slot machines, which is when you kind of almost win, right?
08:01 You might get--
08:02 Two lemons.
08:02 Yeah, two lemons.
08:03 And then the other lemon just barely passes by.
08:06 Barely passes by, or losses disguised as wins.
08:09 Do you know what those are?
08:10 No.
08:10 So that's when, let's say, you bet $1
08:13 and you quote unquote "win" $0.50.
08:16 So--
08:17 Oh.
08:18 Right?
08:18 So you don't lose everything, but you win $0.50.
08:20 Now, we tend to react to that as if we're winning when
08:24 they study gamblers.
08:26 And that's also embedded in the search for food, right?
08:28 You might-- let's say you're hunting.
08:30 You're like, oh, we've got a big kill on our hands.
08:32 And then you whiff, and the animal's on its way.
08:34 It's like, damn, that is a--
08:35 that's a-- right?
08:37 That's the near miss.
08:39 Or you come upon a berry bush, and let's say it took you--
08:43 you burned 500 calories looking for this thing,
08:45 and it only contains 200 calories worth of food.
08:48 And so all of these sort of evolutionary parts
08:52 of this system that we used to fall into as we evolved
08:55 are now in slot machines, and in turn,
08:57 now being used by a lot of big tech companies
08:59 and different industries.
09:01 So they just trick the human reward system.
09:04 Yeah.
09:04 Yeah, it mimics these sort of ancient pathways, more or less.
09:07 And gambling is, to me, is one of the most peculiar ones,
09:12 because it's so overwhelming for people
09:15 that are hooked on gambling.
09:16 It's such a mental health issue.
09:18 It's such an addiction.
09:20 And when you see people that are just like chasing it,
09:24 and they just can't stop, it's like--
09:27 I always wonder, like, what pathway is being hijacked?
09:31 Like, what is it about human beings that want to risk,
09:36 like, literally all of their money on a roll of the dice,
09:39 or on a spin of the roulette wheel, or on a hand of cards?
09:42 Like, what is that?
09:44 Yeah.
09:45 This is a good question.
09:46 Now, this Zental guy that I told you about,
09:51 he does a lot of research on pigeons.
09:53 So he can basically turn a pigeon
09:55 into a degenerate gambler in, like, two minutes.
09:58 He'll give--
09:58 A pigeon?
09:59 A pigeon, dude.
10:00 He'll give them--
10:01 [LAUGHTER]
10:03 That sounds cruel.
10:04 I said the same thing when I was talking about--
10:06 Isn't life hard enough as a pigeon?
10:08 Yeah.
10:09 So he'll get pigeons who-- you know, they live in these cages.
10:13 And he'll give them the option to play a game where
10:16 they--
10:17 every other peck, they get, say, 15 units of food.
10:21 So peck, no food.
10:22 Peck, 15 units of food.
10:24 But then they have an option to play a second game.
10:26 And this second game is very much a gambling game,
10:28 in that they get food about every fifth peck,
10:31 but it's random.
10:32 So you could go peck, peck, food, peck, peck.
10:36 The next one could be food, peck, peck, peck, peck, right?
10:38 So it's just kind of like a slot machine.
10:41 And they get more food playing the gambling game.
10:43 They get 20 units.
10:45 If you do the math, it makes a lot more sense
10:47 to play the game where you get every other--
10:50 every other peck is getting you food.
10:52 It adds up to a lot more food.
10:55 But what he finds is that the pigeons consistently
10:58 play the slot machine game.
11:00 97% of pigeons will choose that game.
11:03 But they're not risking anything.
11:04 They're not risking anything, right?
11:06 But it's still--
11:06 So how's that gambling?
11:07 They're still putting in the effort
11:09 to have to play the game.
11:10 Yeah, but that seems obvious.
11:12 Like, the rewards are greater.
11:14 So they know that if they just keep pecking,
11:16 it doesn't hurt to peck.
11:17 They're going to get a bigger supply of food.
11:19 They don't get a bigger supply, though,
11:21 because they'll get 15 every other peck--
11:23 Right.
11:24 --versus 20 every fifth peck.
11:26 So if you put in 100 pecks, you're
11:27 going to get more food playing the one where it's--
11:30 you get food every other time.
11:31 Right, but it's still not gambling,
11:32 because the pigeon just sees a larger pile of food
11:35 with the more pecks.
11:37 So it just wants the larger pile of food, so it just keeps going.
11:40 It's not like they're risking all their food.
11:42 Right, right.
11:43 So I don't think it's a gambling thing.
11:45 Well, the larger pile of food comes
11:47 from the predictable rewards.
11:49 Yes, right, if you do every other, right?
11:53 Yeah, every other is how you get the biggest pile of food.
11:56 But you don't get the biggest pile in one jump, one dump,
11:59 right?
12:00 The one where it's every five, it's a larger quantity of food.
12:03 Yeah, so you get 20.
12:04 Yeah, see, that's not gambling.
12:06 Why is it not gambling?
12:06 Because it's just more effort.
12:09 It's more effort to get a bigger pile.
12:10 So he would argue that--
12:12 They're just dumb.
12:13 They just can't say, oh, it's every other one.
12:16 Well, all they see is that they're getting,
12:18 you know, what are 15 units versus 20.
12:20 Is that what it was?
12:21 Yeah.
12:22 Yeah.
12:22 All they know is 20 units.
12:24 Like, oh, this one gives 20 units.
12:25 Just keep pecking.
12:26 I don't think they're smart enough to figure that out.
12:28 I think they're just like, keep going, keep--
12:30 there's 20.
12:30 Keep going, keep going, 20.
12:32 But there's not a risk.
12:33 So here's what I'll tell you.
12:35 He would argue, and a lot of biologists would,
12:37 they would say, you know, there's
12:38 this theory called the optimal foraging theory.
12:40 It says that animals will expend the least amount of energy
12:43 to get the most amount of food.
12:45 So over time, they're expending a lot less energy
12:48 to get more food.
12:50 And so here's where it gets interesting, though,
12:54 is that--
12:55 to sort of bring it back to why do people
12:58 fall into this, why would someone
12:59 bet their entire fortune on a roulette wheel or whatever,
13:02 is that when he will put pigeons in a sort of wild environment--
13:08 so where he keeps them is in these pigeon cages
13:10 where they kind of live alone.
13:12 It's a basic cage.
13:14 When he puts them in a cage that mimics the wild--
13:17 so it's this giant cage that has, like, roosts.
13:19 It's got cliffs.
13:20 It's got other pigeons.
13:22 It's very much like they would have to live in the wild.
13:25 And then he throws them back to choose a game.
13:28 They start choosing the optimal game.
13:30 Oh.
13:31 Yeah.
13:32 Interesting.
13:32 Yeah.
13:34 [BLANK_AUDIO]