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Paigowdan
Paigowdan
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January 14th, 2012 at 5:31:22 PM permalink
Yes, but up to a point, as casinos cannot operate at a loss either, or else they are not in existence for us.
Cheating and pilfering drive up costs, house edges, and reduce our comps. State Farm and GEICO make a profit, insurance fraud notwithstanding. We ultimately always pay for the sins of others if tolerated.
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bigfoot66
bigfoot66
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January 14th, 2012 at 5:41:30 PM permalink
Dan is actually right. Though we pay more not only for cheaters but also to support the Bob Dancers of the world....
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P90
P90
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January 14th, 2012 at 5:50:51 PM permalink
All industries take losses at times. Car dealerships selling vehicles below invoice, computer stores doing it all the time, for investment it's outright routine.
While it's true that cheaters do have an eventual effect, it's only global and indirect. Only to the extent that cheaters take money out of the sector, thus reducing its size, thus potentially reducing competition, and it's only the reduction in competition that ultimately affects the market price, to the extent of such reduction. It's not occurring at a high enough rate to put a significant dent here.

If you will offer a slashed paytable and half the comps, should a cheater attack occur, so as to help your bottom line - why wait for the cheater and not do it right now?


Online poker has twice more hands per hour, ~100 times lower operating costs (one employee per hundreds of players, versus one per only a few players in casino), yet the rake is still in 5%-8% up to $5 range, only a little below live casinos. Why? Players still swallow it.

All while rake-free and zero-edge sites show it's possible to profitably operate at a small fraction of the take.
But... a zero-edge game is still a -EU proposition, and rake-free sites are populated by smarter players, which don't bleed chips at the rate fish does. Relegating such sites to only a small market niche, since players dumb enough to fleece don't care enough to move.
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Paigowdan
Paigowdan
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January 14th, 2012 at 6:04:16 PM permalink
If casino operators want to institute zero-edge games, it's their call.
If it's profitable, they'll do it.
We place our bets, and we wait and see.
Personally, I'd like to see zero-edge and fraud-free auto insurance implemented, and pay $3 a month on my new car for my fine driving record.
Maybe online, not meaning to be too glib....
Beware of all enterprises that require new clothes - Henry David Thoreau. Like Dealers' uniforms - Dan.
P90
P90
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January 14th, 2012 at 6:33:27 PM permalink
Quote: Paigowdan

If casino operators want to institute zero-edge games, it's their call.
If it's profitable, they'll do it.


Not correct.
If it's the most profitable game they can offer, then they'll do it.

Until then, if increasing the house edge increases the profit, then that is what will be done, until the point where higher edge results in lower profit.
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Paigowdan
Paigowdan
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January 14th, 2012 at 9:33:49 PM permalink
Quote: P90

Not correct.
If it's the most profitable game they can offer, then they'll do it.


Okay - good point.
Question: Would that house edge/table hold necessarily have to go up, to cover increased theft or pilferage?
What defines "most profitable" when accounting for these variables? Would it change/increase?
Beware of all enterprises that require new clothes - Henry David Thoreau. Like Dealers' uniforms - Dan.
AlanMendelson
AlanMendelson
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January 15th, 2012 at 2:53:25 AM permalink
So if the rest of us as players are paying for the cheating of others, a question:

If you are a player and you spot another player "cheating" do you say something?
If you are a player and you see a dealer make incorrect pays (too much) do you say something?
I guess you can also add -- if you are a player and you see a dealer paying too little to some other player do you say something?
P90
P90
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January 15th, 2012 at 3:19:07 AM permalink
Quote: Paigowdan

Okay - good point.
Question: Would that house edge/table hold necessarily have to go up, to cover increased theft or pilferage?


Only in specific circumstances.

Imagine you're a small overpriced store on the Strip, selling sodas for $5.00 a bottle. Customers have the choice of going elsewhere on LVB for $4.50 a bottle, going a bit offstrip for $3.50 a bottle, or driving to a supermarket.
You are starting to get increased theft rate. Do you increase the price further?
No. By setting it at $5.50, a lot more customers will be willing to walk extra 50 yards to save what is now $1 rather than $0.5.

Increased price will only bring reduced revenue, and no reduction in losses - the price-demand elasticity is not affected by your pilferage problem.
Neither can you just jack the price up if you're that supermarket 10 miles away: people only drive that far because you're the cheapest. Although in that case it gets a bit more involved.

Eventually the effects will reach the consumer, but in modern economy you aren't much more affected by a shoplifter in your neighborhood than you are by hoodlums way on the other coast breaking windows in an entirely different store.


Quote: Paigowdan

What defines "most profitable" when accounting for these variables? Would it change/increase?


Revenue = players*(player bankroll)*hold, where players<=n*tables
Gross profit ~= revenue - ((table cost)*tables+cheaters*antihold
Net profit ~= gross profit - (dealer cost)*tables

The point of maximum revenue is when adding to house edge either doesn't add to hold anymore (players lose too fast and leave), or when added hold doesn't compensate for player loss.
The point of maximum (gross) profitability is a little north, if table cost is significant, as fewer players means fewer tables. Table cost would be significant if you're either short on space or the game requires per-table royalties.
Net profit optimization pushes it a little further up due to adding dealer cost. Optimization for net profit impedes business growth, but becomes necessary if closing to the break-even point.

Unlike players, cheaters aren't shopping for the best rules, as they aren't playing by them, so their number remains roughly a constant. It will only decrease if there simply aren't enough tables for them all.
Increase in base game HA also only has a minimal effect on negative hold. So there is no direct way in which an increase in HA beyond the point of optimal revenue helps offset an increase in losses.

Indirectly, if the losses to cheaters are very significant, they will push your profit margins down. The lower your profit margin, the more weight will you be assigning to net profit versus revenue and gross profit in business strategy optimization. Such optimization will favor having fewer tables in order to reduce costs, at which point you do increase the HA to detract players exceeding your capacity. Another way of cutting down on cheater losses would be pulling the game completely or almost completely.
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odiousgambit
odiousgambit
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January 15th, 2012 at 4:30:43 AM permalink
I could never make myself cap a post-come-out Don't bet even if I thought I could get away with it. I did remove a Pass line bet after a point was set once without immediately realizing what I had done, fumbling with a bunch of chips from the winnings of another bet. Then someone instantly 7d out. I didnt bother tossing back in my loser, and I have to tell you it felt good! I can see how you could get into this kind of cheating. I am resolved, though, to never intentionally cheat, this has served me pretty well in life and I always have noticed with my own observations that the old saying "cheaters never prosper" is absolutely true.
the next time Dame Fortune toys with your heart, your soul and your wallet, raise your glass and praise her thus: “Thanks for nothing, you cold-hearted, evil, damnable, nefarious, low-life, malicious monster from Hell!” She is, after all, stone deaf. ... Arnold Snyder
Paigowdan
Paigowdan
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January 15th, 2012 at 5:37:07 AM permalink
Quote: AlanMendelson

So if the rest of us as players are paying for the cheating of others, a question:

If you are a player and you spot another player "cheating" do you say something?


Yes, I do always, and have done so. Sometimes (- rarely) the player feels guilt or remorse, but often is annoyed, and says that I took money away from him. I always say that:
1. that was never the case, as he had NOT won it; a dealer error does not make ill-gotten money "yours" or "not my business." If I am at a table witnessing this crap - it is my business.
2. And if he wanted to be a petty thief, he should go stick up a 7-11.
For that matter, if I saw someone pilfering cash from a broken ATM location, let's say, I'd call the police with a plate number with other details; what would I otherwise say? Good for the crook? Not my business? No way.
Quote: AlanMendelson

If you are a player and you see a dealer make incorrect pays (too much) do you say something?


Yes. You overpaid him by x dollars. Again; - money not his to begin with, and; - it is my business if at the table.
Quote: AlanMendelson

I guess you can also add -- if you are a player and you see a dealer paying too little to some other player do you say something?


Yes. You the dealer underpaid him by 'x' dolllars. Again, not the house's money to begin with if the house is wrong, and, yes, it is my business, if at the table.
Beware of all enterprises that require new clothes - Henry David Thoreau. Like Dealers' uniforms - Dan.

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