Would you be the House?

Here in Michigan, hundreds of charities and non-profits sponsor "Vegas Parties" to raise money for their respective organization. It is permitted by the State, highly regulated and, limits the number of days per-year a organization can have an event (16) and the amount of money that can be wagered per-day ($15,000).

Some organizations, (like mine), do pretty well at it by offering traditional games such as blackjack, craps, roulette, etc. We are successful at it because (1) we own our own tables (50) and equipment, conduct the events at our own facilities, have a 99% volunteer work force, are our own concessionaire for food and beverage, and every game is adjusted in the house's favor. In other words, we have virtually no overhead, keep the beer and pizza money and tilt the game so, if we lose, we don't lose big and/or the other tables/games cover for a few that go south.

Many organizations do not have that same luxury as we enjoy but still sponsor "Vegas Parties" and wake up the following morning to discover that they actually lost money at their event--sometimes HUGE money. The occurs because they have to rent the location ($), the equipment ($$) and in some cases, the dealers ($$). Then, incredibly, some offer odds/payouts that are the same or nearly the same as a real casino (GIANT dumb). And, I won't even begin to speak about incompetent and/or dishonest dealers.

In discussing this subject with a friend recently, he said that he would absolutely kill for the opportunity to be in the position of the house, specifically: the non-profit. Of course, he can't because he is merely an individual and you have to meet strict criteria in order to obtain a charitable gaming license from the state. But he made an interesting suggestion. He said that he would happily provide the equipment, tables and dealers to any organization's event under four conditions:

1. He would accept all risks associated with the gaming in exchange for 50% of the night's profit. Thus, the non-profit organization can not lose money from gaming under any scenario. If my friend did not make money, neither would the organization.

2. He will maintain a odds/payout menu that is structured very similar to what we offer at our events

3. He would only offer wagers of $5 or less.

4. He would limit player winnings to say, $500 per-night.

I said to myself that this idea is not so dumb. However, there are some speed-bumps, not the least of which is schlepping equipment from location to location. Still, the organization is on the hook for the location. Hmmmm?

Then, there is the "pucker part".....actually taking on the risks that comes with any game of chance. And, with that risk...possibly paying out huge bucks of your own money! Would you do this??

I asked myself the same question and, my answer is this....YES, but only for craps and roulette. Black jack is too much work for too little return: 1 table, 1 dealer, small house edge.

Thoughts...Would you do this with your own moola?

Quote: Riva

And, with that risk...possibly paying out huge bucks of your own money! Would you do this??

With a max bet of $5 and a max player cash out of $500 there is very little chance of paying "huge bucks" out of pocket.

I would do this, but I think you almost have to offer blackjack to be viable; otherwise, you have a lot of disappointed customers. Perhaps a BJ variant that has a larger house edge (bad game the pros here wouldn't play), but still offer it.

First of all, only inexperienced charities pay to rent dealers and tables. Most of them have table sponsors who pay a fee in exchange for signage. The biggest problem I have seen here is the lessor of the table never standardizes where to put the signs. Many is the time I have had to move or work around the sign because it was just in the way. Otherwise this is how it should be done. Most charities have some car dealers, plumbers, chiropractors, or whatever who can lay out $4-500 to rent a table and pay a dealer. I don't know the law where you live but can't believe it could not be overcome if it had to be.

What your friend suggests is how I would suggest it work, though if he is going to eat losses he needs to take closer to 75% not 50%. My background says this is a smarter way to go based on what I have seen in my (gasp) 6 years doing this. Some more reasons:

1. The person hosting the event will usually have no experience in cash handling and even if they do they will be overwhelmed with the rest of the plans to run a proper cage and count room. They will not realize chips are cash and will probably use regular chips from Wal-Mart. You properly need purpose-made chips with a custom logo for control. Nobody will do this for a one-time deal. The buy-in should be organized, which it rarely is at events I work. And a biggie, you should have armed security or at least an off-duty cop hanging around in case someone wants to rob the place. It can and will happen if word gets out. All it takes is 2-3 meth heads who need a fix and see the fliers.

2. You need very good dealers. Even I thought split AA and getting 21 was payable as blackjack until someone here mentioned it. A civilian holding the event does not grasp the thin margin of some games and that over a short term the players can kill the table. I told the story here about the drunk woman who I was hoping would lose to get some coffee in here who kept winning. Or the field bet nearly cleaning out my bank. Yes I won that bank back, but had the table emptied with the chips the charity would have had a loss for the night on my table alone. It really does take thousands of hands/trials to see how this works, a key reason why supervisors need experience to get licensed in many places. Two hours of training is not going to cut it.

3. Moving the equipment is easy. We can break the place down fast, like a M*A*S*H bug-out. Setting it up of course takes longer. But it all folds up and is in a van in 45 minutes or less.

4. If you do not offer Blackjack don't waste your time. Non-players are scared to death of craps and new players will not play the center bets much. A craps table will be a grind since you need 2-3 dealers to run it. They can be run by one player if no cash in involved, but if it was I can say no way I could do it alone. Some people will make honest mistakes and others will make it a fund raiser for themselves.

Bottom line: I actually am surprised the state does not just license vendors for it already. It can be done, but it has to be done as a serious business with a great crew of dealers and supervision. To build the crew would take more time than most owners could wait out to make a profit. Dealer pay is a breaker. You need to pay $30-40 an hour for dealers on most games and $50-60 an hour for craps, more if a long drive and paying for parking is involved. Your set-up pit-boss is another $200+ per event. That is going to be a breaker.

Quote: Riva

Thoughts...Would you do this with your own moola?

Goodness yes.

The best way* to make money from gambling is to be the house.

Anytime any of my colleagues express an interest in playing blackjack, I offer to deal.


The worry from the organization's standpoint should be that the gaming service's cash handlers have agents in collusion who might cash in chips that weren't purchased at this event, cutting into the proceeds to be split.



*The second best is to sell books.

While I certainly would step in to bank the game, If I was the charity, I would be reluctant to engage in the same relationship with an unproven entity. What if they don't hold up their end of the deal, or the service they provide is sub-standard? Perhaps a good faith bond requirement, or a minium amount of front money makes sense.

I deleted what I originally said. Ill re-post after.

I have a followup question. Assuming you had some money but not billions, would you make this kind of a deal with a real casino, with normal games and wagers? not me.

If you owned a casino would you offer a deal like this to someone? I would. no need for risk, Eh?

Quote: AxelWolf

If you owned a casino would you offer a deal like this to someone? I would. no need for risk, Eh?

Your seat is available for 1/2 no limit.

Quote: Dieter

Your seat is available for 1/2 no limit.

Not sure what that's supposed to mean.

Feel free to answer my question.

If you feel in in left field saying no, I have a perfectly good reason. Would love to hear you thoughts.

Quote: AxelWolf

Not sure what that's supposed to mean.

Feel free to answer my question.

If you feel in in left field saying no, I have a perfectly good reason. Would love to hear you thoughts.

Every poker room is player banked, yes?

Quote: Dieter

Every poker room is player banked, yes?

All the ones that I know of. I didn't realize we were talking about only poker. In that case, Ill take the clubs action over poker. Who wants the restaurants? Poker rooms don't do great everywhere.

I was asking about over all casino table gaming.

Quote: AxelWolf

All the ones that I know of. I didn't realize we were talking about only poker. In that case, Ill take the clubs action over poker. Who wants the restaurants? Poker rooms don't do great everywhere.

I was asking about over all casino table gaming.

Let me clarify...here in Michigan, we have poker rooms. They do hundreds of millions of dollars in business per-year. There are 2 entities involved..the charity and the poker room. Most poker rooms are simply banquet rooms of some larger business entity such as a bar, restaurant or bowling alley. The room provides the physical location, the tables and equipment and dealers. The charity provides the license for gaming and a few of their people to handle the cash. In exchange for all this, the poker room keeps 50% of the poker revenue and 100% of the beer and pizza money. Charities love the arrangement and so do the rooms as there is 0% risk on anybody's part. But, that only applies to poker.

What has happened is, some of the charities have gone in to offering other casino games in addition to poker such as Blackjack, craps and roulette. The state does not distinguish one game from another. Rather, any/all games fall under the license. However, what many charities failed to understand is that they have just gone from one gaming model that has zero risk to the house (poker) to a gaming model that has GIGANTIC risk to the house (traditional games). And, to make things even riskier, the charities have odds and payouts exactly the same as a real casino! Further, the let 100% total strangers deal the games for them with minimal or no controls or supervision! One charity I know of lost $75,000 in one night and, the wager limit per-day is only $15,000. So, there is absolutely no way to recover when your event runs from 6 PM to 2AM and you can only have an event for 4 days in a row.

That said, I think that I would still personally bankroll the gaming operation, including traditional games with one caveat....since its licensed as a charity game, odds and payouts are structured accordingly. I'd bring in my crew, my odds and payouts, my control. Then, I would take on 100% of the risk surrounding traditional games and, simply give a percent of the night's profit to the actual charity sponsoring the event. if a poker player does not like the arraignment, they they can choose to stay with poker or, drive to a real casino.

Quote: AxelWolf

I was asking about over all casino table gaming.

If it's good action, why would they give it up?

The table games I expect that the house might let you bank: Pai Gow / Pai Gow Poker (from time to time), Blackjack (where the house takes an ante), Baccarat (big table, you play as the banker, they still take the commission), Poker (since that's always player banked, and the house "just" collects a rake).

I don't expect they'll let any player bank a game where the house has a real edge (Roulette odds or better) or where there's a significant ratio payout (50:1 or higher). Either the civilians would catch on just how significantly they're getting fleeced, or there aren't enough people who could post the stakes to cover a reasonable maximum bet.

But yeah, I'd love to have a Big Six wheel. I'm convinced that the local place that has one has it there just to collect people's last $7 in chips before they leave (their table allows $1-$50; every other table in the house is $5 or $10 min).

Quote: Dieter

But yeah, I'd love to have a Big Six wheel. I'm convinced that the local place that has one has it there just to collect people's last $7 in chips before they leave (their table allows $1-$50; every other table in the house is $5 or $10 min).

Here's a short video of our Big Six table in action at our big spring event (under a giant tent). And boy, did you hit the nail on the head. The table is located right near the cashier's cage right in the path of players checking out. The thing is, they never get to the cashier's cage but rather, park all night in front of the wheel (the stools are people anchors).

We purchased this wheel new for about 3k. We made a 10' table with dual layouts ($800). Recovered the costs by the second night in action. The dealer is a volunteer mom and she works the table like an ATM. Notice that she never turns around to check out the winning number (uses a mirror). Always smiling when she's sweeping in the loot. This video was taken about 1:45 AM, about 15 minutes before we close for the night. The tent was still jammed with players. What a hoot!

View My Video

Quote: Dieter

If it's good action, why would they give it up?

The table games I expect that the house might let you bank: Pai Gow / Pai Gow Poker (from time to time), Blackjack (where the house takes an ante), Baccarat (big table, you play as the banker, they still take the commission), Poker (since that's always player banked, and the house "just" collects a rake).

I don't expect they'll let any player bank a game where the house has a real edge (Roulette odds or better) or where there's a significant ratio payout (50:1 or higher). Either the civilians would catch on just how significantly they're getting fleeced, or there aren't enough people who could post the stakes to cover a reasonable maximum bet.

But yeah, I'd love to have a Big Six wheel. I'm convinced that the local place that has one has it there just to collect people's last $7 in chips before they leave (their table allows $1-$50; every other table in the house is $5 or $10 min).

of course I would want to be the house in most circumstances.


People might be jumping on this to fast, thinking what a great opportunity( Possibly not) Risk has nothing to do with it IMO (it could be -EV for him) in a real casino he would probably lose.

Everything would get split nightly and then start over again the next night. (ouch)
He would give up half the win and all of the loss.

My dream to find an ongoing situation like this, reverse daily loss rebate.

If I owned a casino, I would let anyone dumb enough that wanted to take that deal, do it. They would get crushed, I would make out like a bandit, In my casino for sure.


Riva's and his friends situation is different, its not a normal casino.
Volume and betting limits combined is the only saving grace his friend would have.

I would worry more about roulette and in his situation. Better HA yes, but the variance might kick your ass on long shots. (his "casino" might profit daily so no big deal)

With Riva's bad BJ rules and $5 max that's much safer.

I would want to see records and know you turn a profit more often than not, or the profit nights are far bigger than losing nights.

If a partnership situation came along like this, one should negotiate a no splitting profits or losses until X amount of hours/days/events.

Riva, is the "standard" Vegas 40:1 Big Six a good enough edge for your organization, or did you feel a need to further juice this one?

Quote: Dieter

Riva, is the "standard" Vegas 40:1 Big Six a good enough edge for your organization, or did you feel a need to further juice this one?

No, we pay 40:1 on the joker and the flag on Big Six. However, we limit the wager on this table to $5 for any spot, including the Joker or Flag. Normally, the 40:1 hits about 3-5 times over the 4-day weekend. No big deal, the table still makes money. However, one night at last year's event, I got wind that a fellow hit either the joker or the flag about 6 times in one hour. That's nearly impossible.

Well, it turns the dealers are two volunteer moms having a wonderful evening at the Fair, chatting about who knows what, and both watching the number land on the wheel behind them (duh). It's a miracle that we didn't lose a zillion dollars. Fortunately, one of the other supervisors picked up on all the hollering screaming and took over the table using the mirrors. No more 40:1's.

Quote: AxelWolf

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I would want to see records and know you turn a profit more often than not, or the profit nights are far bigger than losing nights.

If a partnership situation came along like this, one should negotiate a no splitting profits or losses until X amount of hours/days/events.

As mentioned, I have been doing the event for about 20 years. Plus, countless 1-day events during the year. In all that time, we have NEVER lost money. That is not to mean that overall, a 4-day event was profitable. Rather, it means that on any given day, using our house odds and payouts, we have ALWAYS been profitable. Some more profitable than others, but NEVER a losing day in 20 years.

Quote: Riva

No, we pay 40:1 on the joker and the flag on Big Six.

Good to know that you can get by on 11%-24%. :)

This ought to be a useful lesson to all your players - you juice your edge on all the other games (vs what a "real" casino offers), but this one's standard rules are juicy enough already.

Quote: Riva

Fortunately, one of the other supervisors picked up on all the hollering screaming and took over the table using the mirrors. No more 40:1's.

Also good that your crew put an end to the past-posting. No big deal to hit the joker 4 times an hour... so long as the player is betting it consistently and it's a "fair" wheel. :)

Quote: Dieter

Good to know that you can get by on 11%-24%. :)

This ought to be a useful lesson to all your players - you juice your edge on all the other games (vs what a "real" casino offers), but this one's standard rules are juicy enough already.

Also good that your crew put an end to the past-posting. No big deal to hit the joker 4 times an hour... so long as the player is betting it consistently and it's a "fair" wheel. :)

We could have told the manufacturer to put the joker and flag at 30:1 but, 40:1 was OK knowing we have a $5 cap.

Actually, we have spots that pay exactly the same as a casino and in some cases better. For example, in craps we pay the same in the field. On roulette, all the outside bets pay the same as a casino. In blackjack, we actually pay 2:1 on a BJ versus 3:2 as in most casinos. The reason for the latter is that it is easier to count and pay out thus saving precious time to get more hands in per-hour.

With regards to past posting, it rarely happens in roulette or craps. reason? Too many eyes looking directly over the table. Our roulette is 20" with 2 layouts and the wheel in the middle. One person spins and calls while there is a dealer over each layout.

Where we can really get crushed sometimes on the wheels (we have 3; big six, big 9 and dice). Sometimes, you get a group of say 10-15 young guys in their early 20's or so working as what I call a "swarm" (see my video). The all move in to work one table where perhaps one of the dealers is on break and an unfortunate volunteer mom is left to fly solo for 10 minutes or so. The swarm is making all kinds of noise, money flying in and out, hands and arms flying every direction. In other words, organized chaos. In 5 minutes, there may be 15-20 $10/$20 winners, all $5 bets. These young guys know EXACTLY what they are doing. So, whenever I see a swarm, either I or one of the other supervisors get over to that table immediately. Once we get there, the swarm knows that the gig is up and they disperse. All part if the game.

Quote: Riva

As mentioned, I have been doing the event for about 20 years. Plus, countless 1-day events during the year. In all that time, we have NEVER lost money. That is not to mean that overall, a 4-day event was profitable. Rather, it means that on any given day, using our house odds and payouts, we have ALWAYS been profitable. Some more profitable than others, but NEVER a losing day in 20 years.

if your profitable each time then it's a no brainer. Obviously the HA volume and low limits creates a perfect situation. What's the amount starting amount it costs to set up an event?

If you operated like a real casino this type of deal would be a disaster for the backers. A great deal for the casino.The Casino could target Hugh bettors with perks and really clean up. They are getting a loss rebate situation.

Quote: AxelWolf

if your profitable each time then it's a no brainer. Obviously the HA volume and low limits creates a perfect situation. What's the amount starting amount it costs to set up an event?

If you operated like a real casino this type of deal would be a disaster for the backers. A great deal for the casino.The Casino could target Hugh bettors with perks and really clean up. They are getting a loss rebate situation.

To your first question...for our situation, the costs are next to zero. That's because we own 100% of our tables (50) and equipment. Plus, 99% of the dealers are volunteers. So, there is virtually no overhead. We chose to make that investment years ago and over time, it has been a highly profitable investment.

Other organizations are not as fortunate as us. In order to put on an event, they typically have to rent a location, rent equipment and rent dealers. Then, they have to hope they are profitable enough from gambling just to recover their cost just to have the event. Many don't and say, "We'll never have one of these events again." And, I would not blame them.

As far as cash management goes, that a different subject altogether. The state imposes a $15,000 per-day wager limit. When you sell out your chip limit, you're done. Not only that, but any start-up money you give to a table counts against the limit. So, if you put out say, $3,000 at the beginning of the night, you only have $12,000 left to sell to players. As a result, we typically start a BJ with $20 and hope they start winning right away.

To your second question....the casino could target huge betters however, there are no huge bettors. You keep your max bets low and shave your payouts. Plus, there is a $500 per-night cap on winnings. Doesn't matter how you wine and dine your players. The backers control the game.

Here's an actual case that I just read about.....A local eatery had a banquet room. The owner purchased a ton of gaming tables and dolled up the place real nice. He supplied everything except the license. That has to be obtained by the charity and, the charity is the only one that can touch real money/sell chips.

The proposition went like this.... he offered any charity free use of his room, including tables, equipment and dealers, security--the whole enchilada! In exchange, the eatery owner guaranteed the charity $1,000 flat payment per-night, win or lose. The eatery owner kept all profits after the $1,000 payout. Charities line up by the boatload to have an event at this fellow's eatery. Big charities, little charities, didn't matter. They each got a guaranteed $1,000 per-night and, all they had to do was pull a $50 license from the State and have 3 of their own members at the event to handle money. Oh yeah, the eatery guy kept all the beer and pizza money as well.

The deal lasted less than 30 days before it was padlocked by the state! It never re-opened

WHY?

I'm going to stop here and let you good folks guess as to the reasons.

"we typically start a BJ with $20 and hope they start winning right away. "

Winning? I don't understand that.

Quote: chickenman

"we typically start a BJ with $20 and hope they start winning right away. "

Winning? I don't understand that.

So they don't eat into the chip limit by re-buying.

Quote: wudged

So they don't eat into the chip limit by re-buying.

correct..if we load up each dealer's tray at the start of the night, that's makes for fewer chips we can sell to players.

Typically, we hit the wager limit 9:00 PM per night.

Got it

Quote: Riva

Here's an actual case that I just read about.....A local eatery had a banquet room. The owner purchased a ton of gaming tables and dolled up the place real nice. He supplied everything except the license. That has to be obtained by the charity and, the charity is the only one that can touch real money/sell chips.

The proposition went like this.... he offered any charity free use of his room, including tables, equipment and dealers, security--the whole enchilada! In exchange, the eatery owner guaranteed the charity $1,000 flat payment per-night, win or lose. The eatery owner kept all profits after the $1,000 payout. Charities line up by the boatload to have an event at this fellow's eatery. Big charities, little charities, didn't matter. They each got a guaranteed $1,000 per-night and, all they had to do was pull a $50 license from the State and have 3 of their own members at the event to handle money. Oh yeah, the eatery guy kept all the beer and pizza money as well.

The deal lasted less than 30 days before it was padlocked by the state! It never re-opened

WHY?

I'm going to stop here and let you good folks guess as to the reasons.

Here's what happened and, it's a classic combination of stupidity, greed and arrogance that closed him up.

First, he sets up the games with the exact same payouts and odds as a real casino, forgetting that this is a charity game. He wants it to be as real to life as a casino so, players come to his place instead of to a real casino. Well, having the same odds and payouts as a casino does not stop the house from experiencing bad swings. And, his first bad swing every day of the week is that he is paying the charity a flat $1,000 at the get-go. That has to be recovered through food and beverage and/or gaming.

Next, he set his table limits at $10- $100. Could you imagine a roulette table with $100 chips splashed all around? $100 BJ? Look at his exposure on craps!! Yikes!

Now, you have to remember there is a $15k per-day wager limit. So, this guy is getting murdered and, unlike a casino, does not have the same "time" to recover. State law says you must close up shop at 2:00 AM.

So now, he's already in to the charities for a grand, has to pay all the dealers and, he getting hammered at the tables by the players. It's getting late, and he wants to win his money back. And, the only way to win his money back is to sell more chips to players that are not winning but still want to play. However, the law says you can only sell $15k per day, no matter if the house is winning or losing. He ignores the law and keeps on selling chips. He figures that nobody from the state gaming department is going to check up on some little charity game right? WRONG. Undercover agents are there by the boatload and shut down his operation. The charities are blacklisted from getting a gaming license going forward because, at the end of the day, it was THEIR event.

In my opinion, this guy had a license to print money for decades. All he had to do was structure his odds and payouts like a charity game, keep the wager limits low, keep tight controls and not sell more chips than the law permits and he would be golden. Heck, the beer and pizza money probably covered the juice he was giving the charity. Now, he's got a banquet room full of used gaming tables gathering dust and no way to recover what he lost in the few short weeks he was open. Dumb.