SICK OF MG

[Slotmachine]

Originally Posted by caruso

Au contraire by a long way: it is all, and only, and nothing but, the house edge.

I agree with Caruso; it's absolutely all about the house edge. It's the house edge that runs players down the way Spear described. I described the same mechanism above using numbers. The house edge can (and will) take every single player to the cleaner's eventually. Risk of ruin=100%. Exception to the rule, you can win in the long run playing low house edge games and making use of bonuses and comp points. Or by being as lucky as Gramma, although she is probably just slightly up after all those years of depositing $36,000 a year.

I'm in it for the excitement, so my main concern is limiting my losses. The simplest way to do this is to determine a monthly deposit limit and knock myself out with it. I don't usually abide by my own "system". If and when I get a big hit, I'll withdraw it and use the winnings to buy something nice since it was surplus money anyway (if there ever was such a thing), and fund my next few month's gambling.

Of course, there is always the element of luck - it's (very remotely) possible to score a very big win, bringing you way ahead in the game, even rich. That's what keeps it interesting.

Also correct; however, you can put it in more of a nutshell: wager less and you will lose less.

Exactly right. That's what my "betting system" is about. You can only lose as much as you deposit. The less you wager, the slower you lose and the longer you get to play.

Cheers,
SM

[caruso]

Originally Posted by spearmaster

I have to au contraire this... LOL...

The house edge is what gives the casino an advantage over the long run. But the reason casinos make money is what Simmo said - they run you down. Keep in mind casinos have deep pockets, and can outride almost any losing streak - while you, the punter, can be wiped out by a short bad streak.

If you have unlimited funds, then this of course is not the case. But most punters who go to the casino tend to say "$500 this trip", "$50 on Megabucks" and so on... and then STILL overrun their budget by pulling out the ATM card they conveniently forgot to leave at home, or by taking out expensive cash advances on credit cards because they DID leave the ATM card at home, and then they take bigger risks hoping to get back to even.

(trust me, been there, done that).

Of course, if there was no house edge, there would be no casino either - and ultimately, the more churn, the more they make. It's a bit of both - but it's definitely not only the house edge.

As for BrianC's advice (hello fellow Jersey boy) - it is almost exactly the method I follow. I deposit $50 at a time, almost never more or less. Any time I can run that to $500 or more, I cash out in increments of $500. And when I hit a cashout level, I cash out and move on to another casino if I still feel like playing.

Ted, I must au contraire you back again.

A player who is short-pocketed is a DISadvantage to the casino because he can only churn so much. Following your argument, the less the player brings with him the better the casino has of it, as they can "bust" him quicker! Taking this scenario to a rather absurd conclusion, players would bring nothing and walk straight out the door.

If a casino can choose between 20 players with $50 and 20 players with $5000, which does it choose? The low-roller for the "rundown" factor or the high-roller, who will bust less quickly assuming similar betting, but churn more? Clearly the high roller. And we know that Vegas courts its whales, the multi-million dollar rollers, so the eating of the pudding seems to be the proof.

OK, an individual $50 roll may last only a short time, but in that event, say $500 wagering, it represents only $10 overall at 2% house edge. The individual roll means nothing to the casino - all they see is one huge roll. They want all those rolls, as one big roll, to be churned as much as possible to generate maximum income. That $50 roller will come back next week with another $50; would not the casino rather he brought $200, for $40 house edge income?

You rather counter-argue your point when you say "... and then STILL overrun their budget by pulling out the ATM card they conveniently forgot to leave at home, or by taking out expensive cash advances on credit cards because they DID leave the ATM card at home, and then they take bigger risks hoping to get back to even.". Exactly: they churn more by so doing. They may get even, they may lose, but they churn more, and in the long run, lose more. They are "run down" LESS quickly, as they have accessed more funds, but they will lose MORE. Hence, "rundown factor" is to the player's advantage, not disadvantage, as he will wager less, stuck as he is with that lower roll.

"Rundown factor" is only a short term consideration for the player, and an income-stunter for the casino. Clearly, ultimate casino heaven is a bunch of unlimited bankrolls wagering endlessly. The "$50 and bust in 20 minutes" club? Nay.

[spearmaster]

While you're not exactly wrong, I shall yet again point out that they are counting on you to bust out before they are. A high roller, churn or no churn, can hurt them a lot more than a low roller.

Also, you might ask yourself why, in Las Vegas and Atlantic City, is a minimum of 75% of floor space dedicated to slot machines - not something high rollers generally get involved with. Not to mention that slot club cashback is higher... even online, at most casinos, slot cashback or comp points are higher.

I'm not going to go into a more detailed explanation because I don't want to go through all the intricacies (besides which I'm busy as hell for the next few days) - your opinion could well be based on what you see in UK casinos (ie. very few slot machines and all fruit for that matter) but I assure you that, at least from a North American and Australian perspective, I am correct.

Sure they entice the whales back - no question about that. But when they are beaten badly, a la Kerry Packer, they are also banned from further play... think about that for a bit Ain't no way a low-roller, especially playing slots, will ever be chased from the casino.

By the way, I forgot to mention that North American casinos have an added advantage - free alcohol. Also, the point of the exercise is NOT churn - it is to bust the player. Churn does NOT guarantee a return. A busted player is money in the bank.

[elscrabinda]

I accept everything written about house edge but it is far from the whole story. Imagine a completely fair zero house edge roulette wheel (one with no zeros). I would contend that this would still be profitable for the casino for the reasons above that gamblers tend not to cash out when up.

To take caruso's point above,

Exactly: they churn more by so doing. They may get even, they may lose, but they churn more, and in the long run, lose more.

What makes you think the player would cash out and leave once they get even again? They would be on a winning streak at that point and unlikely to stop without a lot of self discipline. phyngster gave an example in another thread of a player who had won $280k at an RTG casino before gambling it all back down again. I would contend that it wasn't the house edge that beat him, it was his inability to stop once ahead and that he would likely have cashed out zilch on a zero house edge game as well.

[gfkostas]

Originally Posted by spearmaster

Sure they entice the whales back - no question about that. But when they are beaten badly, a la Kerry Packer, they are also banned from further play... think about that for a bit Ain't no way a low-roller, especially playing slots, will ever be chased from the casino.

Too right

Kerry Packer was once rumoured to have won 20 consecutive hands of baccarat in 20 minutes at $250,000 per hand in a Las Vegas casino

[tencardcharlie]

I accept everything written about house edge but it is far from the whole story. Imagine a completely fair zero house edge roulette wheel (one with no zeros). I would contend that this would still be profitable for the casino for the reasons above that gamblers tend not to cash out when up.

This is only correct if the said gambler NEVER cashed out, but continued to double up into infinity - thus giving her a risk of ruin of 100%. Otherwise, the expected reusult for the casino is zero.

Lets do the math:
One player - A - plays the roulette wheel until she has either doubled up her deposit or busted which gives her a 50% chance of winning. The expected result is (where d is the deposit):
2d*0.5 + 0 * d * 0.5 = d

since she has 50% chance of losing d and 50% chance of winning d.

Now, another player - B - will not stop before she has broken the bank. Lets say that means she has to win 10.000 times her deposit, before the casino has to close down for the night. The expected result is:

10.000* d * 0.0001 + 0 * d * 0.9999 = d

Which is the exact same result as above. Now this player is of course much more likely to make a loss during each session, but once in a blue moon she will hit a win thats so huge it on average evens out the losses. You can plug in any finite numbers in the calculations above and the reults will still be the same.

With a house edge of zero, the casino cannot expect to make a profit. With a house edge, on the other hand, the casino will profit much more on player B than A.

[Slotmachine]

Originally Posted by elscrabinda

What makes you think the player would cash out and leave once they get even again? They would be on a winning streak at that point and unlikely to stop without a lot of self discipline. phyngster gave an example in another thread of a player who had won $280k at an RTG casino before gambling it all back down again. I would contend that it wasn't the house edge that beat him, it was his inability to stop once ahead and that he would likely have cashed out zilch on a zero house edge game as well.

Some whale playing down $280k is the same as 2,800 players playing down $100 each. No difference from the casino's point of view. Caruso's "one big roll" analogy is good: there's this amount of $$ walking in through the door in the form of high rollers, low rollers and bingo players, and at the end of day, the day's wagers are counted as one big wager, and the casino's take is the house edge (say 5%) of those wagers, no more, no less.

However, 2,800 nickle slot players are more likely to play down $280k in one night than one person with $280k in his pocket. Hence Spearmaster's observation that the casinos prefer to allocate more floor space for slots. Also slots have high house edge, about 8% on the Strip. (Spear, of course, knows these things). No question - slots are the business. High house edge, absolutely no way to take advantage of them, no way to get a player edge. Latest: Roadhouse Reels online casino, slots only!

If the house edge is zero, the casino's profit will be zero. There is absolutely no question about it: it's all about the house edge. The casino's profit is defined by the house edge.

The Casino calculates its profits like this:
Income (total wagers) - Payouts = Profit/Loss
Profit/Income approaches house edge in the long run. The more wagers, the quicker the profit will approach house edge.

Say 10,000 gamblers all depositing $100 tonight, wagering 20x on average.
Income 10,000*100*20= 20,000,000
Given a 5% house edge, payout = 0.95*10,000,000 = 19,000,000
Profit = 20,000,000 - 19,000,000 = 1,000,000

Not bad! And 10,000 gamblers depositing $100 per day is probably not an outrageous number for some of the biggest online casinos. It's an amazing business. Unique in that randomness guarantees profits. All you have to do is get the players to come in through the door (or log in) and stay in. Hence the free drinks.

Cheers,
SM

[nafanny29]

Originally Posted by spearmaster

your opinion could well be based on what you see in UK casinos (ie. very few slot machines and all fruit for that matter)

In the UK are casinos not restricted to a certain number of slots, or has that now changed?

[aodat2]

You guys are getting yourself confused here.

1. US Casinos prefer smaller players because they know that if you bring $100 and lose today, you'll be able to come back next week or something like that, thus you'll be bringing in more $$$ in the long run. This is totally different with whales. How many $200,000 can a whale afford to lose? They catch him once and that's it! That's why as Spearmaster said, casinos prefer smaller players.

2. Casinos generally would love to see money churning over and over as they know that in the end of the day, the money will most probably be taken up by the commission or house edge. So $200,000 from a whale churning compared to 2000 $100 players is the same thing to the casino.

Speaking from experience, I could tell you for a fact that Harrah's Entertainment do not prefer WHALES compared to Bellagio/MGM/Venetian and etc. Why? Well simple, they do not want to see a dent in their Quarterly Financial Report, whereas Bellagio/MGM and Venetian do not care about that and would rather catch them than the smaller players. It's just a matter of concept and what the casino's aim is set at. Nothing great, nothing bad either.

Hope this say a little for everyone. I'm sorry if I did deviate from the topic but heck, I'm seeing the confusion and would like to just clarify a little.

[spearmaster]

Originally Posted by nafanny29

In the UK are casinos not restricted to a certain number of slots, or has that now changed?

As far as I can recall, casinos in the UK are limited to 6 fruit machines - and every single UK casino that I have been in has the maximum number. This of course excludes amusement arcades masquerading as casinos - I believe there is a limit there as well but I am not sure of that number.

Regarding churn - keep in mind this is a theoretical figure we are talking about. The longer you churn, the closer you get to the theoretical house edge. Obviously, if you take $100 and run it through 20x, you will probably lose most, if not all, of your hundred. But if you busted out after 3x playthrough, the casino has your $100 - they could care less if through churn you should only have generated them $9, assuming 3% edge.

Ultimately, churn works in the casino's favor - but their goal is to get your money, they don't care whether it takes them 5 days or 5 minutes, $100 is $100. If anything, churn costs them more money, not only in human resources, but in comps.