Keeping keno players coming will soften losses
December 30, 2014 3:08 AM
by Pesach Kremen
Many casinos have made every effort to enhance their keno by offering attractive tickets and promotions to encourage more play. This keeps the customers happy and returning to their casino time and time again.
Thus, it is a wonder why two casinos (same ownership) would downgrade their games, especially when their location (off Strip) does not encourage a lot of play from tourists despite excellent transit and shuttle access to their properties.
The casinos made two changes. The major one was elimination of their “Exacta” ticket option. The “Exacta” is a side bet where for 25 cents additional per game or way you are betting to get the exact number of hits two games in a row.
The house edge on this bet is about 3%-5%, lower than regular keno substantially, but nevertheless the bet is good for the house. Due to the long odds of hitting the same number of spots in multiple games, especially on higher number of spots tickets, it allows for some very attractive payoffs.
Anytime you have a long odds payout, this may or may not occur as expected. These type of hits are best described by a Poisson distribution.
A simple example should suffice. The odds of getting a Royal Flush in video poker can vary roughly from 32,000:1 to 48,000:1 (even less or more) depending on the game played and player skill. However; anything that is expected to happen once in 40,000 tries can easily happen more than once or not at all.
Also, keep in mind, just because you have gone 39,999 hands without a royal flush you are no more or less likely to hit one on the next hand. Likewise, if you just hit a royal the odds of hitting another on the next hand are no worse than if you did not just hit a royal.
How is this all relevant to keno and The Exacta? It just so happened that in a short period of time several Exacta hits were recorded for large sums of money.
So the casinos pulled the Exacta bet. Did they think players would buy more tickets with the money not spent on the Exacta? Doubtful. If you run a casino, even with a house edge you will have losing days but the more action the more you make. Eliminating a player’s favorite option will cause you to lose customers.
On top of this they cut the maximum payout per game to $100,000 rather than $500,000, another major blunder. If a player plays a $2 straight 8-spot and hits the progressive of $150,000 he will get the $150,000. However; should another player in the same game hit a $5 7-spot for $50,000 then the first $100,000 of the win gets prorated. This is ludicrous.
Let’s say you attack the progressive as most do with way tickets. Say you play 9 groups of 2 playing for the 8s and 9s. You have one 9 and nine 8s for a ticket cost of $20.
Let’s say you hit 8-of-9. That gives you a SOLID 8 for the progressive for which you get paid in full (assuming no other major ticket hit that game). But will you get paid in full on that first $100,000? Maybe yes, maybe no, as your “small” winners total quite a bit.
Your 8-of-9 is worth $10,000. Your 7-of-8’s total $24,000. This way causes pro-rating of these hits. The casino should want more action, not less. When the players discover they will be paid less for the same win, they will vote with their feet and walk.
If the above was not enough to insult the better players, the following surely will: They cut the intermediate pays on their $10 high roller tickets. Now 5-of-6 pays $850 instead of $950.
I once hit 5-of-6 on this ticket. Will I play it again? No way, even though it still has a lower house edge than their other tickets. I treat it as a potential robbery of $100 from my pocket. Many others will feel the same.
It costs the casino the same to write a $1 ticket or a $10 ticket. Thus if a casino keeps 25% on a dollar ticket they make 25 cents on the ticket. If the casino keeps 10% on a $10 ticket they keep $1. Thus the logic makes no sense. People who can afford to play $10 a ticket have the bankroll to play where they choose so if you short change them they will go elsewhere.
It is even stranger when the same casinos have a lot of in-house progressive slots that pay in 6 figures. What if a few hit the same day? Will they take these out, too?
Let’s bring in players, give them good returns, and keep them with better payouts, increased volume and limits. This has been a proven formula for success, reducing payouts and player options loses customers.
Which way do you want your keno game to be?
Pesach Kremen is a former UNLV Masters Gaming student, has won and placed in multiple local keno tournaments, and has written several academic papers on Keno. You can reach him at PesachKremen@GamingToday.com.