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Don’t violate the
law of numbers!

Dec 23, 2003 1:56 AM

I’ve been involved in floating crap games aboard ship in the Navy. I also ran "Vegas Night" crap games for the Elks Club in Colorado. These were not always profitable ventures and we could take a hit. On any given night, a big casino on the Strip can take a bath on any table game.

It takes "The Law of Large Numbers" (there’s no such thing as "The Law of Averages") for many people, many tables, much action to approach equilibrium from aberrant swings of randomness to let the vigorish assert itself and the house grind out an inevitable profit.

Even though a game is biased towards the house, short term losses can occur, if not it couldn’t be called "gambling" per se. In casino lingo, three terms are most kicked around: drop, hold, and vigorish. "Drop" is the total handle ”” the total volume put into action. Cash is quickly exchanged into chips to stuff the drop box. Markers are also put in the drop box.

Periodically when the drop boxes are counted and the chip racks filled, the "hold" percentage can be determined. In craps and "21," the hold averages about 16 percent. This means, for every $100 of drop, the house pays out about $84 in winnings.

We know the craps vigorish is only about 1.4 percent but that’s the grind on the average single bet. A $100 bet would have to be replayed about a dozen times to lose the $16 hold then obviously our average player salvages and moves on until they cash out at the cage, etc. These figures hold true thousands and thousands of hours at hundreds of tables of many casinos. You can count on it. Blackjack holds about 16 percent as well.

Roulette (0-0) averages about a 27 percent hold in the long run even though the dollar volume is about one-third of that of craps. The higher hold can be attributed to the very high vigorish of 5¼ percent. Slots, of course, is the steady profit grinder and posts more action than all the table games in the casino. These mechanical and video contrivances pose no threat to the casino and will eventually turn most smaller casinos into slot arcades.

Sports and horse betting are but a drop in the casino volume bucket. All the big casino really asks of them is to "break even." They are more of an accommodation.

The game of great concern to the casinos is baccarat. It’s an extremely volatile game. Ironically, their tables historically hold about 29 percent of the drop yet provide the smallest vigorish (1.17 to 1.36 percent). This can be attributed to the fact that their comfortable surroundings have the player exercise their bankroll (expose it to the vig) for much longer periods of time and the increased dollar volume per capita.

While many thousands of patrons may circulate through a casino for blackjack and craps, at best only a couple hundred or so make it to the baccarat pit. Traditionally, baccarat profits have exceeded craps at about 150 percent. However lately, baccarat profits have dropped dramatically to equal craps.

Baccarat players are big-time bettors and highly coveted by the casinos. Only in Las Vegas have four casinos had luck on these very, very high-bet premium players: e.g., Mirage, Hilton, Caesars, and Desert Inn. All offer extremely high limits to attract the wealthy. $200,000 single bets are not unheard of. They are attracted worldwide. In the 1960s, it was affluent Americans then the 1970s brought on the oil-rich Arabs and Mexicans. The 1980s saw the shift to Orientals from the Far East, originally Japanese but then shifting to Chinese. Wherever the big money is at the time.

Now, these ethnics are waning and we see marketing emphasis shifting to Taiwanese, Koreans, and South Americans. It’s ironic that, even among these groups, less than one dozen comprise the really big players. Only two players Kashiwagi (murdered) and Mizuno (indicted for fraud) have had great impact on their drop out of the game.

Baccarat revenues have dropped over the years. It alone has previously amounted to 2 percent of the entire Nevada state budget revenue. Never have so few meant so much. It’s by far my favorite casino game and I would like to see its popularity enhanced rather than dwindle. We’ve got to bring more players into the fold even through mid-size bettors to stabilize the game.