Bill Zender Newsletter – December 20, 2018
( Reprinted with permission )
I just want to take the time to wish everyone a Merry Christmas, Happy Holidays, and a Happy and Joyous New Year. I’m sorry that I have been unable to conduct my usual consulting work, travel to different casino and provide them advice and answers to table game problems, teach seminars on game protection and table game mathematics, and looking into and learning all the new techniques the “dark side” of casino gaming has been throwing at us in 2018. As you all know, I have spent the last nine months (has it been that long?) helping to operate a Cardroom Casino in Northern California. Unfortunately, it has taken up a great amount of my time, and because of the situation, it appears that I will be in this same position at least until the summer/fall of 2019. For now, take care and I wish you all a fun and very happy holiday season, and a pleasant and prosperous 2019.
I like to publish questions I receive from various people who contact me and my answers that I believe would be, not only interesting, but enlightening to other people who subscribe to my eBlast list. One major problem our industry has always had is the sharing of information regarding gaming mathematics and issues related to possible cheating and advantage play. I believe in maintaining a forum that is as open as possible where others in the industry can learn from various industry executives and managers regarding their questions and experiences.
Following are three emails I received over the past months. When replying to the questions, there are some instances where I also mention attached backup articles, spreadsheets or charts. If you happen to find the reply to a certain email appealing, and are interested in obtaining the additional material mentioned, feel free to contact me and ask for the specific article, spreadsheet, or chart.
In addition, I do honor your individual privacy. I will omit the location and name of the individual asking the question, and will not use a question/reply if the person who asks the question wishes to keep it between the two of us. Please send any table game related questions to email@example.com.
I am wondering if some casino’s place comp restrictions on Video Poker players (Jacks or Better or Double–Double bonus machines)?
Note: Not really a table games question, but I do comment on comp restrictions in ETGs;
The short answer is yes they do. A lot of video poker games operate off a low H/A%, usually less than 3%. In most cases, each slot “point” represents a theoretical give back of 0.25%. If you offer 5X points as a promotion, the give back is 1.25%. If the video poker game is a 1% game or less (played perfect basic strategy), then you have eliminated your edge. Of course this would require the player receiving 100% of their reinvestment return (cash, food, rooms, etc.), but you get the picture. It’s not unusual to see casinos offer 8X or greater promotion days or periods.
Another area to consider is electronic devices/games that involve a participation with the machine manufacturer. You need to consider your “profit sharing” agreement before including that device in your standard point promotion. Example; one major gaming corporation does not give players slot points for play on their ETG roulette machines. The reason for this is that they have a high participation sharing percentage, and even though the roulette machine is subject to a 5.26% H/A% on all bets, if they apply their standard points reinvestment, they are upside down revenue potential. Be sure to evaluate (or reevaluate) all participation devices and games.
I am the table games manager for a casino in Oklahoma. I have a couple of questions about one play only promo chips. The first question is how will having promo chips affect a tables hold %; let’s say the table usually holds X% but we then add promo chips, what is the expected change in hold % and how did you come up with this figure? The second question is how would you create a report showing how the promo chips are doing? If you can give me some directions on these questions it would help me out a lot, please remember that the promo chips are one play only no matter if the player wins or losses.
Great question. Single play Promo chips result in a loss to the chip tray of the table where they are played. If you reduce the amount of chips in the tray, you lower your hold percentage.
The purpose for single play chip promotions is to bring players to the table to gamble. The down side to this promotion will occur if the customers don’t stay at the table long enough for you to win back the cost of the chips. The cost of the single play promo chip is approximately 48% of face value (based on a standard BJ game). If you give a player a $10.00 single play (also known as “free play”) promo chip, it cost the casino (and the table tray) $4.80. If the customer continues to play and bets $10 (on BJ), he will have to place an additional 37 wagers (at $10) before you will break even. In many cases, the marketing department has no idea of this cost and give the promo chips away like they are candy.
Note: In review of this person’s question, I noticed I forgot to answer his question 2 regarding how to create a report that shows the effect, positive or negative, regarding the single play promo chips usage. The answer; you need to compare the cost of the promo chips given away, in this case about 48% of face value, with the incremental revenue gain from the promotion. You also need to add in any additional cost such as extra dealers to open more games, and personal to handle the promotion. In many cases, the promotion is not structured correctly and/or closely monitored by management, and the cost exceed the increase in revenue generated by the promotion. God bless the marketing department; however, a number of marketing personnel do not understand that the cost of this promotion is felt by the table games. When marketing creates a promotion Proforma (I hope they create a Proforma!), they usually don’t include the true cost of the promo chips.
I’ve recently heard that you advise operators to keep side bets on blackjack tables at $100 max or less. I’m reaching out to question your reasoning behind that. More specifically, in relation to the side bet offered at my property. We offer 21+3 side bets that pay 9 to 1.
There are a couple reasons for setting lower side bets limits:
- On multiple paying wagers, in this instance 9:1, you are open to large swings when players wager large amounts, and in most cases upper management does not understand when someone crushes a BJ game on a non-high limit table. Keeping the limits low allows you to maintain the “grind” play.
- Side bets are sometimes exploitable when players are allowed to wager larger amounts. For instance, the “Match the Dealer” side bet can be counted using a special count system, but no one attacks it when it is limited to a $25 maximum side bet. The estimated hourly “card counting” return for an average paced game is under $3 per hour. If someone were to raise the limit to $250, the side bet becomes much more attractive (just under $30 per hour). I tell people, be careful when raising the side bet limits you don’t open up Pandora’s box.
On the opposite side of this equation, raising the side bet limit will increase your revenue potential from that side bet. The only problem is that an overwhelming majority of side bet players wager in $5 to $10 maximum, and the side bets don’t really attract higher range players who usually are not interested in anything but wagering on the main game. Idea; maybe consider giving certain higher limit players a special limit on the side bets (if your regulations allow it).
If you want to raise the side bet limit, be sure you understand how the side bet can be beaten through advantage play beforehand (check www.apheat.net), and be sure upper management understands any possible win/loss volatility; explain the trade-off of short-term volatility for long-term revenue potential.
Scheduled Seminars and Workshop
World Game Protection Conference March 2019 – Las Vegas
Don’t forget the World Game Protection Conference, March 3-6, 2019 at the Tropicana Resort in Las Vegas. I plan to conduct two 50 minute sessions; one on Electric Table Games, similar to last year, but with updated material, and a second 50 minute session which will be a “drill down” into Roulette and Craps. It appears there are a couple of gambling jurisdictions that are including both roulette and craps to their State’s available table games for the first time. This session will be interesting for both the “newbie” and the “long-term” veterans. For more information, please go to: https://www.
On the Move
I don’t have any additional jobs other than the one in northern California. I will keep everyone informed when that changes. Following is my obligations for the 2019 (so far):
World Game Protection Conference in Las Vegas Nevada
As mentioned previously in this eBlast, I’m always available to answer your questions. If you have any questions on gaming; don’t hesitate to contact me through email. I answer close to a half dozen emails on gaming every day firstname.lastname@example.org.
Cheers and good luck.
Bill Zender and Associates