Popularity of blackjack in Vegas

Quote: pacomartin

I'm not sure how to decrease the size of the image. I made it in excel, used Gimp to turn it into PNG file, and uploaded into Wikimedia Commons.

You can resize in Excel.

Quote:

Dorothy, I respect your analysis. But I was trying to figure out where the decreases are coming. Part of the decrease in BJ revenue is the elimination of BJ tables.

Frank, your work is excellent, I read several other bits of research you did. I caution against fitting the data to the conclusion. No revenue is being lost by elimination of BJ tables. Revenue is lost because people aren't playing blackjack as much.

--Dorothy

Quote: pacomartin

I'm not sure how to decrease the size of the image. I made it in excel, used Gimp to turn it into PNG file, and uploaded into Wikimedia Commons.

You can resize in Excel.

Quote:

Dorothy, I respect your analysis. But I was trying to figure out where the decreases are coming. Part of the decrease in BJ revenue is the elimination of BJ tables.

Frank, your work is excellent, I read several other bits of research you did. I caution against fitting the data to the conclusion. No revenue is being lost by elimination of BJ tables. Revenue is lost in the game of blackjack because people aren't playing blackjack as much.

Quote:

We've known for some time that the casinos would like to de-emphasize blackjack since it has such a low house edge and it is expensive to operate. Roulette and Craps have higher house edges (depending on how you play) and most carnival games have much higher edges.

Players are moving from blackjack to non-traditional games, they are not moving to Roulette and Craps. Some non-traditional games have a lower edge than blackjack (e.g. Blackjack Switch). The products are out there, players are making the choice and driving the market by virtue of these choices.

There's a lot of data about various gaming markets. Aside from saying what's obvious to the casual observer, there is a lot of downside risk in trying to draw conclusions. Nevertheless, I enjoy and appreciate your work towards that end.

--Dorothy

Relative to October 2007 when statewide revenue peaked the state numbers are:
(1) Slots down 19% to year ending July 2004
(2) Pit (all sources) down 22% to year ending Dec 2004
(3) Blackjack down 30% to year ending Dec 1997
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So in the last 2 years Nevada numbers have dropped to what they were over 5 years ago. Then how long do you think it will be before they come back? Will it take 5 years just to get back to where they were? Over the last two decades gaming revenue has been growing by 50% every 7 years. Now it might take the industry 7 years to just getting back to where it was in 2007.
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More importantly the newspaper says we broke 23 months of month over month (year before) consecutive declines. But what really happened was there was a huge jump in baccarat which offset losses in all other areas. Baccarat is very variable since it depends on whales and because it is far fewer players it fluctuates much more widely. The Paquiao-Mayweather fight may have been the deciding factor. It should be noted that the Baccarat hold was very high which means in probability that the players were staying at the table longer than normal.
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Maybe the big time blackjack players are all playing baccarat now. It is as valid a hypothesis as anything else. The final answer may not be knowable because only the casinos know the habits of the top 1000 players who can tip the balance every month. The behavior of these men is one of the most closely guarded secrets in Vegas. The Gaming Board expressed their surprise the there was a Billion dollars in baccarat play last August for no apparent reason. There was more play than for the rest of the pit combined.
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I also wonder about the potential collapse of the older casinos which still supply tens of thousands of jobs. They may not be sustainable without the slot and blackjack and carnival game revenue. One of the reasons Sheldon Adelson made more many faster than anyone in history was that his casino, the Venetian was catering to so many high rollers. He could maintain them with a relatively small workforce. All the profits went straight into his pockets. Harrah's employs most of the people in the industry, trying to keep all the restaurants, gaming tables, rooms and player clubs going for the millions of small time gamblers all across the country. Nevada has 193K hotel rooms, more than any comparable size place in the world.

Quote: DorothyGale

People are not leaving blackjack because of 6/5. People are playing more blackjack because of 6/5. The game of 6/5 is offering a price-point that allows casinos to offer low-limit games, drawing in players who can't afford a $25 minimum, for example. Harrah's, in particular, offers 6/5 specifically because of its broad ability to attract players, and develop them to play at higher limits. Without 6/5, there would be much less blackjack in Nevada.

While I agree with most of your other points and analysis, I can't agree with this. The fact is there is no data to support this statement. Blackjack was doing very well before 6:5 and in fact has declined significantly since. While it is very difficult to seperate cause from effect and thus nobody here can make meaningful conclusions, we can say that 6:5 certainly has not been the savior of blackjack.

Whether it has hurt the game is another matter. Personally I think those very un-exciting payouts on naturals (who wants white chips?) are one of the reasons low-limit gamblers have moved to other games or reduced their casino patronage entirely. But I really don't know. I am reasonably sure that everyone would be better off without it. Without 6:5, lots of casinos would simply offer exclusively H17 games with poor rules for all their low limit tables like they used to. Most people playing these games play to a pretty high disadvantage but at least still get to enjoy their bonus payout on blackjacks. 6:5 is not a necessity for the casinos here, and may very well have been a bad business decision.

Other than that, very interesting data on the carnival games. I knew they were on the rise, but I did not realize how much it actually was. I'm a bit surprised this is not driving at least some revenue growth overall. These games are usually far worse than even 6:5. Blackjack switch is an exception, but the strategy is so complicated that it probably has a quite high real-world edge. Nobody knows the switching strategy, and few people make adjustments for the push-on-22 rule in basic strategy.

Do you think this is all really a case of the 'market has spoken', or do you think the casinos have misjudged the market by installing too many of these games simply because they were blinded by the flashy house edge numbers?

Paco, the year 2007 is not a good baseline for measuring any trends. It was a bubble year. Data is available since 1990, it should all be used in any academic discussion about gaming trends in Nevada.

As far as data about blackjack, the following data (this is my personal research -- if IP means anything these days) shows the number of visitors per blackjack table (V/BJ) in Nevada from 1990 to 2009, and the number of visitors per table game overall (V/TG). The value V/BJ is going up steadily, showing the incremental decline of blackjack as a destination for the Nevada visitor. The value V/TG has been steady since 1999, showing that overall about the same fraction of visitors are playing table games.

The data since 2007 is anomolous, due to the failing economy, hence my caution to Paco.

Year	V/BJ	V/TG
1990	6039	4582
1991	6265	4539
1992	6789	4357
1993	6963	4674
1994	8375	4839
1995	8525	5014
1996	8332	5229
1997	8647	5224
1998	8807	5218
1999	8949	5667
2000	9640	5712
2001	9620	5669
2002	9813	5588
2003	10278	5500
2004	11118	5425
2005	11134	5685
2006	11578	5679
2007	11972	5646
2008	11629	5629
2009	11326	5500

--Dorothy

Quote: pocketaces

Quote: DorothyGale

People are not leaving blackjack because of 6/5. People are playing more blackjack because of 6/5. The game of 6/5 is offering a price-point that allows casinos to offer low-limit games, drawing in players who can't afford a $25 minimum, for example. Harrah's, in particular, offers 6/5 specifically because of its broad ability to attract players, and develop them to play at higher limits. Without 6/5, there would be much less blackjack in Nevada.

While I agree with most of your other points and analysis, I can't agree with this. The fact is there is no data to support this statement. Blackjack was doing very well before 6:5 and in fact has declined significantly since. While it is very difficult to seperate cause from effect and thus nobody here can make meaningful conclusions, we can say that 6:5 certainly has not been the savior of blackjack.

See data above. I believe it supports my statements. There is more data I can present, but it all gets boring.

Blackjack was not "doing very well" before 6/5. Blackjack has been in steady decline in Nevada for almost 20 years (as long as data has been kept). If you look at those values in the table, you will see that V/BJ has been relatively constant since 6/5 was introduced, but was increasing very quickly before that. 6/5 has helped keep the number of blackjack tables relatively high, keeping the ratio smaller than would be predicted by the trend 1990-2003. In this sense, 6/5 has saved blackjack.

Imagining Las Vegas without 6/5 gives me the creeps; just think of how much more Crazy 4 Poker, Whoop Ass Poker and Ultimate Texas Hold 'em there would be in that universe.

--Dorothy

Quote: DorothyGale

Imagining Las Vegas without 6/5 gives me the creeps; just think of how much more Crazy 4 Poker, Whoop Ass Poker and Ultimate Texas Hold 'em there would be in that universe.

--Dorothy

Heh. Not to get too off-topic, but Ultimate Texas Hold 'em can be a good play sometimes, especially if you are playing for comps. Check out some of the links on the Wizard's page.

Quote: DorothyGale

Blackjack was not "doing very well" before 6/5. Blackjack has been in steady decline in Nevada for almost 20 years (as long as data has been kept). If you look at those values in the table, you will see that V/BJ has been relatively constant since 6/5 was introduced, but was increasing very quickly before that. 6/5 has helped keep the number of blackjack tables relatively high, keeping the ratio smaller than would be predicted by the trend 1990-2003. In this sense, 6/5 has saved blackjack.

Imagining Las Vegas without 6/5 gives me the creeps; just think of how much more Crazy 4 Poker, Whoop Ass Poker and Ultimate Texas Hold 'em there would be in that universe.

--Dorothy

I agree that there would be less blackjack tables without 6:5. There is no doubt that if there were no 6:5 tables, there would be less blackjack tables overall today. However, an argument can very easily be made that 6:5 is a carnival game like any other. If we take this to be true and remove 6:5 from all the blackjack figures, it can be seen that it has massively hurt blackjack with the V/BJ figure shooting skyward as tables were converted.

I really look at it that way. Many of the carnival games have house edges better or not far from 6:5, and some like the WPT games are far better when using element of risk. Far from a savior, 6:5 accelerated the trend towards carnival games.

If we are including 6:5 in the blackjack figures, why not SF21? Is it simply because the casino still calls it blackjack?

Basically, using house edge as our determining factor rather than the casino's chosen name, 6:5 belongs in the grouping which have house edges many times worse than regular blackjack.

I also am convinced 6:5 has been part of the overall decline in table revenues. 6:5 replaces an exciting game (blackjack) that has a massive draw with a less exciting game where a low-limit player can look forward to some white chips with their naturals. Blackjack always had the appeal of getting this bonus payout, and without it, I think it signicantly reduces playing time for many gamblers. I don't have any data to back this up, but as I said, this move to 6:5 and other carnival games certainly has not increased revenue.

Besides being 55 and having played some very good games in Vegas in the mid-and late 70’s and 80’s, I have to take exception to Mr. Wizard’s 4th opinion regarding establishing a baseline of 55 years for becoming obsolescent or moribund. Blackjack is a casino’s best friend, maybe not a golden goose but certainly a silver duck if casino management respects and reveres the beauty and simplicity of the game. During the 80’s and 90’s every Blackjack book espousing a winning strategy to “beat the dealer” or “turn the tables” derived more profit for the casino’s than for the authors of these books, or certainly for the readers- who naively came to Vegas with high expectations, little experience and low bankrolls. I seem to remember a litter nuisance, just south, past the Welcome to Fabulous Las Vegas sign, of Blackjack-Your-Way-to-Riches books piling-up from despondent losers throwing these get-rich-fast-playing-Blackjack texts out of the windows of their cars. If the casino’s changed the minimums to $5 and only revised the rules to the standards of the 1980’s they would pack the tables, make the game exciting, while only appearing to be vulnerable to risk. The years following Ken Houston’s Million Dollar Blackjack were the most popular and most profitable for Blackjack in Vegas and AC. People will come again, in the thousands with thousands, if they hold a false perception that they have an edge over the casinos playing Blackjack. And we all know that Blackjack has an enormous house edge or advantage if basic strategy is not perfectly employed. In my 30+ years of playing Blackjack in Vegas, I cannot remember sitting at a table full of strong basic strategy players, let alone with a table full of advantage players. Will high–rollers still find a game in Vegas? Duh!. Can the casinos increase employment, increase profits and provide an intoxicating and seductive environment with low table minimums and better Blackjack rules? Well? Yes-even at 55 years old.

Quote: DorothyGale

The data since 2007 is anomolous, due to the failing economy, hence my caution to Paco.
--Dorothy

I was trying to see what games were doing well in the failing economy. Comparing strip revenue in November 2009 (latest data) against October 2007 (peak data). I used data that represented 12 months ending on these months so as to take out any seasonal fluctuations.

Of the traditional games which represent 84.7% of the pit revenue, baccarat is not down far from it's absolute peak. Blackjack is way down. Since mini-baccarat is even lower than blackjack we can assume it is about lifestyle and income of the players instead of increasing popularity of the actual game. Baccarat and Blackjack are half the pit.
BACCARAT | -8.2%
ROULETTE | -14.1%
CRAPS | -21.1%
TWENTY-ONE | -31.2%
MINI-BACCARAT | -40.6%

The two proprietary Shuffle Master games are holding their own, but they represent 4.8% of the market.
LET IT RIDE | -11.2%
3-CARD POKER | -22.3%

Race and Sports have dropped considerably as they have elsewhere. Represents 3.2% of the market.
RACE BOOK | -35.7%
SPORTS POOL | -39.7%

There is a shift toward Pai Gow Poker probably because it is easier for the casino to deal cards than to play with tiles. Represents only 2.9% of the market.
PAI GOW POKER | -19.4%
PAI GOW | -55.8%

Small traditional games representing only 0.4% of the market
BINGO | +118.0%
KENO | -31.6%

Carnival Games are 4.0% of market
Rest of Pit | -14.4%

The dollar drop in total pit revenue is 47% from blackjack. Since the pit revenue as a whole has dropped 21.4% you can eyeball which games are doing better than average.