BNLData Special: Comparative technical analysis between casino slot machines and video lottery terminals (VLT)
The second article in this special series features the expertise of businessman and GLI 14 specialist Marcus Fortunato, who has over 160 certified games operating in the United States market. He examines the distinctions between traditional casino slot machines and Video Lottery Terminals (VLTs), known as "electronic scratch cards," focusing on their operational mechanics and regulatory standards.
Video Lottery Terminals (VLTs) and casino slot machines, popularly known in Brazil as "caça-níqueis," are common forms of gambling in the United States and several other countries around the world. Slot machines are commonly found in commercial casinos, while VLTs are typically used by lotteries and charitable organizations for fundraising purposes. Understanding their differences is crucial for stakeholders, including legislators, regulators, operators, and participants.
Definition of VLT
VLT is an internationally used term (Video Lottery Terminals) to define electronic terminals with video, authorized and controlled by a lottery.
Games processed by a VLT: Instant Lottery
Instant Lottery, also popularly known as "scratch-off" or "electronic scratch-off," is a type of Brazilian lottery characterized by immediate results, where the player instantly finds out if they have won a prize by scratching or revealing their prize on the ticket, either in paper form or digitally.
Regulatory frameworks and judicial approvals
This document will examine the distinctions between traditional casino slot machines and Video Lottery Terminals (VLTs), popularly known as "electronic scratch cards," focusing on their operational mechanics, regulatory standards, particularly GLI-14, and the jurisdictions where VLTs are authorized. While both gaming devices offer similar user experiences, they differ significantly in design, regulation, and intended use.
Slot machines are RNG (Random Number Generator) based devices regulated by standards such as GLI-11, primarily used in commercial casinos. In contrast, VLTs operate on finite (pre-determined) game sets without RNGs, adhering to GLI-14 standards, and are intended for lotteries and fundraising for social causes. Understanding these distinctions is essential for regulators, operators, and players to ensure compliance and maintain the integrity of gaming activities.
Operational Mechanics
Casino slot machine
Casino slot machines are electronic gaming devices that use random number generators (RNGs) to determine the outcomes. They feature spinning reels, multiple paylines, and bonus features. Players insert money, select bet amounts, and spin the reels, with the results determined by probability in real time.
Light Rail Vehicles – Instant Lottery
The results simulate various types of games based on the prize structure of traditional scratch-off paper lottery tickets, but in digital format. Players select from a finite set of predetermined outcomes stored in a "Plan" or "Game Set". Each round contains a fixed number of winning and losing tickets, and when a ticket is played, it is removed from the set. This finite pool ensures transparency and complete predictability of prize distribution before the game begins.
Regulatory Standards: GLI-14
Gaming Laboratories International (GLI), an international testing laboratory, provides technical standards for gaming devices. GLI-14 specifically addresses finite games and similar devices, including electronic tickets. Key provisions include:
Finite Game Sets: The LRT must operate using finite sets of predetermined outcomes, ensuring that each ticket is unique, numbered, and not replaced after being played. Tickets are controlled by a centralized system and authorized by a Lottery.
No RNGs used: unlike slot machines, the VLT does not use RNGs to determine the results.
Central Monitoring: Light rail vehicles (LRVs) are typically connected to a central system for monitoring and auditing, ensuring compliance with regulatory requirements.
These standards differentiate VLT from slot machines, which are governed by other GLI standards, such as GLI-11, focusing on RNG-based gaming devices.
Judicial Approvals
Light rail transit (LRV) systems are authorized in several US and Canadian states, each with specific regulations: Maryland, Minnesota, North Dakota, Indiana, Virginia, Kentucky, and Ohio.
Comparative Analysis
| Categories | Slot machines | VLT |
|
Determination of Results |
Random Number Generators (RNGs) | Pre-determined Game Plan |
|
Regulatory Standards |
GLI-11 | GLI-14 |
|
Market |
Commercial Casinos | lotteries |
|
Real Time |
Slot machine operation | Centralized Monitoring |
|
Approvals |
Authorized by Federal Law | Authorized by Lotteries |
Regulatory and mathematical differences
The operational, regulatory, and mathematical differences between casino slot machines and VLTs are significant. While both are electronic gaming devices with similar user interfaces, they are governed by distinct regulatory frameworks, primarily GLI-11 for slot machines and GLI-14 for VLTs, and fundamentally differ in their outcome determination and payout structures. A quantitative analysis of expected value and house edge further highlights how these games differ in terms of profitability, risk, and target audiences.
Casino slot machines and VLTs are often confused due to their similar digital interfaces and luck-based gameplay. However, their underlying mechanics, regulatory oversight, and financial models differ significantly. Slot machines utilize real-time random number generators (RNGs) to produce results, while VLTs operate using fixed sets of predetermined outcomes. This difference significantly affects the predictability, volatility, and fairness of payouts.
Illustration: Slot machine
In a jar containing 10 balls numbered from 1 to 10, there are 8 white balls, 1 yellow ball, and 1 green ball.
The white balls have a payout equivalent to "zero," meaning they are losers.
The yellow ball has a prize equivalent to "3x", meaning that if drawn, the prize will be 3 times the value of the bet.
The green ball has a prize equivalent to "6x", meaning that if drawn, the prize will be 6 times the value of the bet.
In each draw, the consumer will pay a certain amount to reveal their luck.
The resident program (RNG – Random Number Generator) draws a number from 1 to 10 in each draw.
Probability of winning: 20% (2 out of 10 balls)
Theoretical Return to Player (RTP): 90% (1 yellow ball of 3x and 1 green ball of 6x)
The chance of winning a 6x prize (green ball) is 1 in 10 balls (10%). The chance of winning a 3x prize (yellow ball) is 1 in 10 balls (10%).
The probability of winning a prize is renewed with each draw.
Mathematically, slot machine games are represented by the following equation:
Expected Value (EV)
To where:
P(i) = probability of Outcome i
W(i) = Gain from Result i
Illustration: Light Rail Transit (VLT)
In a jar containing 10 balls numbered from 1 to 10, there are 8 white balls, 1 yellow ball, and 1 green ball.
The white balls have a payout equivalent to "zero," meaning they are losers.
The yellow ball has a prize equivalent to "3x", meaning that if drawn, the prize will be 3 times the value of the bet.
The green ball has a prize equivalent to "6x", meaning that if drawn, the prize will be 6 times the value of the bet.
In each draw, the consumer will pay a certain amount to reveal their luck.
In the first draw, the jar starts with 10 balls.
In the second draw, the jar contains only 9 balls.
The ball drawn in the first draw does not return to the jar.
After 10 draws, the jar will be empty and all the results drawn will be present, representing a finite series.
There is no (RNG – Random Number Generator) in the resident program.
The system only distributes tickets according to its pre-determined game plan.
Draw 1 – Probability of Winning a Prize: 20% (2 out of 10 balls) in the first draw.
Draw 2 – Probability of Winning a Prize: 22.2% (2 out of 9 balls) in the second draw.
Draw 3 – Probability of Winning a Prize: 25% (2 out of 8 balls) in the third draw.
Draw 4 – Probability of Winning a Prize: 28.5% (2 out of 7 balls) in the fourth draw.
Draw 5 – Probability of Winning a Prize: 33.3% (2 out of 6 balls) in the fifth draw…
Real Return to Player (RTP): 90% (1 yellow ball of 3x and 1 green ball of 6x will be drawn from 10 draws)
The chance of winning a 6x prize (green ball) is 1 in 10 balls (10%) in the first draw and changes with each subsequent draw.
The chance of winning a 3x prize (yellow ball) is 1 in 10 balls (10%) in the first draw and changes with each subsequent draw.
The probability of winning a prize changes with each draw.
Mathematically, VLT games are represented by the following equation:
Calculation of Expected Value:
Total Tickets = 10
Total Prize = 9
Operational Mechanics
Casino slot machines
Results generation : each round is independent, determined by an RNG.
Features: Spinning reels, multiple paylines, bonus rounds, and progressive jackpots or progressive jackpots.
Player interaction: Players insert money, select bet amounts, and spin the reels, with the results determined randomly in real time.
VLT – Instant Lottery
Generating results: Results derived from finite sets of predetermined outcomes stored in a "plan" or "set of games".
Features: Simplified interface, results are revealed after selection.
Player interaction: Consumers select from a finite set of tickets, each with a predetermined outcome; once a ticket is drawn, it is removed from the set.
Regulatory Frameworks
⇒ Article 14 of Law No. 13.756/2018 – 14.790/2023 : The following are considered lottery modalities: federal lottery (passive type): lottery in which the bettor acquires a pre-numbered ticket, in physical (printed) or virtual (electronic) form; numerical prediction lottery : lottery in which the bettor tries to predict which numbers will be drawn in the contest; specific prediction lottery : lottery established by Law No. 11.345, of September 14, 2006 ; sports prediction lottery : lottery in which the bettor tries to predict the outcome of sporting events; and exclusive instant lottery – Lotex : lottery that immediately shows whether or not the bettor has won any prize; and lottery modality fixed-odds betting and online games.
⇒ Decree No. 9.327, of April 3, 2018: Regulates the operation of the Exclusive Instant Lottery modality – LOTEX.
⇒ Federal Law No. 14.790, of December 30, 2023: Restrictions on Online Gambling: Bets related to online gambling events must be offered exclusively through virtual means, and their sale in physical establishments is prohibited.
⇒ Prohibition of physical equipment for online games: The installation of equipment or devices in physical locations intended for the sale of fixed-odds betting in a virtual environment is prohibited.
Federal Law No. 14.790/23:
Article 14. The bets referred to in this Law may be offered by the operating agent in the following forms, individually or jointly:
I – virtual: through access to electronic channels; and
II – Physical: through the purchase of printed tickets.
§ 1 The authorization act from the Ministry of Finance will specify whether the operating agent may operate in one or both modalities.
§ 2. Fixed-odds bets that relate to online gaming events may only be offered in a virtual environment.
§ 3 For the purposes of the provisions of § 2 of this article, the installation or provision of equipment or other devices in physical establishments intended for the sale of fixed-odds betting in a virtual environment is prohibited.
⇒ GLI-11: Applies to casino slot machines, focusing on gaming devices based on RNG – Random Number Generator.
⇒ GLI-14: Refers to Instant Lottery and similar devices, including VLTs, requiring finite sets of games and prohibiting the use of RNGs – Random Number Generators – for determining results.
Conclusion
Casino slot machines and VLTs (Volatility Limited Tactics) differ in terms of basic mechanics, regulatory standards, and financial mathematics. Slot machines emphasize continuous and unpredictable gameplay with high volatility, while VLTs offer finite and structured gameplay, suitable for lottery and low-risk environments. Mathematical analysis reveals higher expected losses for slot machines than VLTs over short periods. (Prize Guarantee versus Prize Probability)
“Light rail transit (LRT) systems, due to their predictability, attract consumers who seek to bet on lottery products rather than random products where luck is subject to probability. Understanding these differences is essential for regulators, operators, and consumers,” commented Marcus Fortunato.
References
⇒ Gaming Laboratories International. GLI-11: Gaming Devices.
⇒ Gaming Laboratories International. GLI-14: Electronic Bingo and Other Game Systems
⇒ Minnesota Statutes § 349.1721
⇒ Casino.org, North Dakota Lawmakers Clarify E-Tabs Rules
⇒ Yogonet.com, Indiana Approves E-Tabs for Charity Gaming
⇒ Law.cornell.edu, Virginia E-Tab Dispensing Rules
⇒ North Dakota Lawmakers Clarify Where Electronic Pull-Tabs Can Operate.
⇒ Indiana Senate Approves Electronic Pull Tabs for Charity Gaming Despite Regulatory Concerns.
⇒ 11 Va. Admin. Code § 20-20-200. Dispensing of Electronic Pull-Tabs.
⇒ Maryland Lottery and Gaming.
⇒ Maryland General Assembly. Senate Bill 864 (2012).
⇒ Maryland General Assembly. Senate Bill 995 (2022).
⇒ Maryland General Assembly. Senate Bill 1112 (2024).
⇒ Maryland Criminal Law Article §12–308.
⇒ Maryland Criminal Law Article §13-2503. • Ohio Revised Code, Section 2915.01
⇒ Ohio Casino Control Commission (OCCC)
⇒ Kentucky Revised Statutes (KRS) Chapter 238.
⇒ Kentucky Department of Charitable Gaming (DCG).
⇒ 820 KAR 1:032.
⇒ Article 28 of Federal Law No. 13.155/2015
⇒ Decree No. 9.327, of April 3, 2018
⇒ Federal Law No. 14.790, of December 30, 2023.
***
The next text will be "Central System monitors Video Lottery Terminals in real time in Brazil".
