Competitive, Live Gaming Malls

I posted a blog about a new concept in gaming (I think its new).

Its about 4 pages long, but I think it describes the way many casinos in the near future might run their live gaming operations in order to reduce costs.


QUESTIONS for the good people at the Wizard of odds:

Can it get any better than this (for the players)?

Is this bad for the casino industry, given the state it is in right now?

Is this bad for anyone?

If a bunch of smaller casinos jumped on-board, perhaps as a last-ditch effort to reduce costs, would the larger casinos join the party as well, because that is where the entire industry is heading, (like it or not), or would they resist?

What if it started becoming really popular with only the startups, would they sign up then or say never, no way?


Is this technically feasible? YES!!!

Is this a reasonable proposal?



Tiltpoul already replied:

Can it get better than this for the players? Technically, yes. They could just be giving money away without risking any of your own, but realistically the situation you presented would never happen anyways.

Is it bad for the casino industry? Yes, since they would be offering wagers at a loss.

If every casino jumped on board because that's where the industry is heading, would they resist? In this theoretical world, probably not. You're giving a scenario where casinos will do ANYTHING to get any sort of business...

Is this a reasonable proposal? Absolutely not. Casinos would never set themselves up like that. You would also have a crazy host of gaming laws to jump through, and frankly, the state wants their cut too. There has to be some risk and I understand casinos have to make money. I don't blame them for any changes; it's a shame that's where we are, but I get it.

It's already being done with the exception of the competitive odds aspect. Interblock, ShuffleMaster, Digideal, and several non-US vendors sell multi terminal systems connected to central game outcome engines. I think your restriction to live gaming hurts the revenue potential, and therefore the competitive advantage, but it's still workable. If you have IP on it, those are the companies I'd talk to.

The cold hard reality that I see is illustrated in the following table comparing gaming revenue "On the Vegas strip" with "off-strip" having the broad definition of all the rest of Nevada.

Comment	Month	State	Strip $billions	Rest of NV
Latest reported	Oct-11	$10.63	$6.01	$4.62
Low for off-strip	Sep-11	$10.55	$5.94	$4.61
Low for the state	Jul-10	$10.28	$5.62	$4.66
Low for the strip	Oct-09	$10.38	$5.49	$4.90
Peak of market	Oct-07	$12.97	$6.95	$6.03
Historic	Oct-04	$10.38	$5.24	$5.14
Historic	Dec-99	$9.02	$4.49	$4.53

I think it is fair to say that there is almost no competition within the Vegas strip based on House Advantage of the games. The only two exceptions are Hooters (right now) and Casino Royale, and they are extremely minor casinos in terms of revenue. All competition on the strip seems to be in terms of comps for high rollers.

The rest of Nevada does compete on House Advantage. They offer increased free odds, 9/6 video poker, and all kinds of lucrative come ons.

Since the majority of games outside of Nevada are at an extremely high house advantage (with some rare exceptions) then people should come to Nevada to outer areas of Clark County, or to Reno to seek out these games.

But the revenue of Nevada off the strip has been falling horrifically, almost as bad as Atlantic City percentage levels.

Quote: pacomartin

Since the majority of games outside of Nevada are at an extremely high house advantage (with some rare exceptions) then people should come to Nevada to outer areas of Clark County, or to Reno to seek out these games.

But the revenue of Nevada off the strip has been falling horrifically, almost as bad as Atlantic City percentage levels.

So the best place for the Competitive Gaming mall would be somewhere between Jerry's golden Nugget and The Joker's Wild ?

Quote: MathExtremist

It's already being done with the exception of the competitive odds aspect. Interblock, ShuffleMaster, Digideal, and several non-US vendors sell multi terminal systems connected to central game outcome engines. I think your restriction to live gaming hurts the revenue potential, and therefore the competitive advantage, but it's still workable. If you have IP on it, those are the companies I'd talk to.

Nice to hear from you, Math. I hope all is well with you.

Thanks, my lawyer did get a reply from the USTPO and it looks like my concurrent mapping ideas might fly. The claims were all rejected due to a percieved overlap with Asher (the guy who came up with some games mapped to the outcome of a horse race) but his claims don't specify multiple concurrency. I made a big deal out of the wording in it, I dont know if you recall, I use the term "ZERO-MAP" and MAP 1, indicating that the original game could be duplicated itself. Asher's claims don't indicate this and his wording uses the singular tense on all referals to the games being mapped, so my lawer is claiming that my pending patent is unique simply because I did strees the multiple concurerency.

I have asked my lawer specifically about the applicability of this mapping IP to the concept of "competitve gaming malls", which, BTW I introduuced publically in 2009 on my website, so I apparently can't have IP for it any more, but I have something even better... I have the working product ready to demo.

I know, "its not created by registered programmers" "its not certfied" "its not legal in Nevada", etc. however, it works great for a demo and if any companies want to look at it I can show it to them (pretty soon it will be ready, like 3 man-weeks of work) now under patent pending protection.


The reason this works goes back to my approach to treating the casino floor like its the factory floor. Do you think they shut down a $20,000 per minute assembly line every time they need to make a configuration change on a given station? My systems allow configuration changes to be made ON THE FLY in live production, and THAT is where this capability comes from. We used to call it "Warm-Start"... re-loading a new configuration while still processing live data.

Thanks for your interest and positive response.

Quote: discflicker

I know, "its not created by registered programmers" "its not certfied" "its not legal in Nevada", etc. however, it works great for a demo and if any companies want to look at it I can show it to them (pretty soon it will be ready, like 3 man-weeks of work) now under patent pending protection.


The reason this works goes back to my approach to treating the casino floor like its the factory floor. Do you think they shut down a $20,000 per minute assembly line every time they need to make a configuration change on a given station? My systems allow configuration changes to be made ON THE FLY in live production, and THAT is where this capability comes from. We used to call it "Warm-Start"... re-loading a new configuration while still processing live data.

Thanks for your interest and positive response.

But you're under the assumption that players will respond to such a network. Even if there is a live person operating the central unit, there will be naysayers in the casino who assume all outcomes are rigged, regardless of which "company" you are patronizing. Further, who's to say, in your given scenario, that a person playing for free hot dogs doesn't play a few dollars, get the hot dog, then switch to a competitor. I know they can do that now, but in the setting you provide it would be easily exploited.

Further, the more I thought about it, I stand by the feasibility of offering better than odds on a given number in your scenario (the 44-1 on the 12 for example). Competitors would suddenly have to offer better offers to outdo each other, or enter a game theory scenario where they all agree not to. Then how much better of are you in the current scenario. I think you have an interesting concept, bu the real-world practicality of it being profitable just doesn't strike me. Gaming operators are simply too self-interested to share with other groups.

Quote: Tiltpoul

Even if there is a live person operating the central unit, there will be naysayers in the casino who assume all outcomes are rigged, regardless of which "company" you are patronizing.

No way, the shooter is right there and all players get to rotate through the list and be shooters themselfs.. In a remote video feed, I guess the asumption could be there, but I would like to just start out establishing that the entire systems is honest and acts more like an ATM than a casino.

Quote: Tiltpoul

Further, who's to say, in your given scenario, that a person playing for free hot dogs doesn't play a few dollars, get the hot dog, then switch to a competitor. I know they can do that now, but in the setting you provide it would be easily exploited.

They will figure it out, stuff like requiring a certain number of bets by the casino giving away the hot dogs, for example. How do those costs compare to having an entire brick and mortar casino to keep up and running? Must be expensive mustard.

Quote: Tiltpoul

Further, the more I thought about it, I stand by the feasibility of offering better than odds on a given number in your scenario (the 44-1 on the 12 for example). Competitors would suddenly have to offer better offers to outdo each other, or enter a game theory scenario where they all agree not to. Then how much better of are you in the current scenario. I think you have an interesting concept, bu the real-world practicality of it being profitable just doesn't strike me. Gaming operators are simply too self-interested to share with other groups.

Right, and that is why setting them against each other is the best way for the end customers get a better deal.

Where's the incentive for the casino to end up in a direct competition like you describe?

Casino's don't compete on price. They compete on the experience you get for the price. The experience is different at each joint, and I reckon that's the major differentiation between the LV casinos. Yes, some of this is price/offers, but a lot of it is surroundings and service.

I'm not your target market, but the scenario you describe sounds unappealing to me.

Quote: discflicker

So the best place for the Competitive Gaming mall would be somewhere between Jerry's golden Nugget and The Joker's Wild ?

I think you missed the point. The Vegas strip where there is no competition in gaming odds, is back to revenue from almost 3 years ago. The "rest of Nevada" is back to the revenue of almost 13 years ago. There is no evidence that competing over house advantage grows the overall market.

It may be a short term panacea for one casino, and clearly some players make out, but it's not clear that you can grow the market that way.

Okay, so I have thought a LOT about this idea. It's actually a very entertaining idea, and I commend you for thinking of it. The rest of this will be highly critical, but any ideas that help benefit the player are always a welcome sign.

1) In your given scenario, you talk about three casinos that seem to be struggling to stay alive on their own. I presume they would be able to use their current licenses and sell their properties. I can only see a few casinos that are struggling to the point where this would actually help them: Circus Circus, Riviera, Stratosphere and Tropicana for the immediate on-strip properties. Tropicana just did major renovations, and the land is valuable, so they don't seem to fit the concept. Circus Circus is still owned by MGM, and while it's not important to their main brand image (they aren't a part of the rewards club and barely advertised as an MGM property), they are unlikely to team up with others in this concept. That leaves two independent casinos that would benefit... Riviera, and Stratosphere. Also, let's say they don't shutter their casinos completely as they will become the two to offer "hotel options..."

2) The only other gaming companies who could possibly be interested in such a concept would be those without a current Vegas presence. That's a lot of small businesses, but let's narrow this group down to two larger and one smaller group: Ameristar, Pinnacle, and Full House Entertainment. Pinnacle apparently has some agreement with Wynn, as they are advertising getaways at Belterra, so they COULD have a hotel option (which will later be discussed). My feeling is Ameristar has no desire to head into Nevada, as their only juncture in Nevada is some rinky dink place in Jackpot, NV. But for the purpose of the argument, the three companies we'll explore are: Ameristar, Pinnacle and FHE.

3) Third, there would be those non-gaming companies that want to establish a gaming presence. These could be investment groups (similar to Colony Capital, or as an example, San Diego Credit Union) or private citizens with enough of an influx of cash (for example, Warren Buffet and Bill Gates). Investment groups often see casinos as a way to build equity and use it to pay out in dividends, similar to the stock market. They have no real interest in the gaming aspect but rather look at it as a way to generate revenue. Individuals may be very interested in the gaming aspect, but may not have the means to figure out how to get started. For the purpose of my example, the investment group will be San Diego Credit Union, and the individual will be a made up consortium of PaiGowDan, JerryLogan and me (Tiltpoul), hereby known as WoV.

4) Finally, the last interested parties would be those with a Vegas presence, but not necessarily a strip presence. For the sake of a simple argument, El Cortez fits nicely. I'll go into ramifications of why I'm not expanding on this later...

Okay, so now we have Riviera, Stratosphere, Ameristar, Pinnacle, FHE, SDCU, WoV, and El Cortez. All of these companies or casinos exist (exception: WoV), and all have reasons to want to take part in such a company.

First, you have to determine ownership of the building. A mall works since an outside group owns the physical property, leasing spaces to tenants. They agree to certain rules and attract tenants to the mall. The mall property takes care of maintenance of the building and providing safety, while each individual store runs their own businesses. Competition can exist because of the rules set up by the group to avoid too much of any type of business (for example, there can only be two sandwich shops).

The easiest thing would be to create a joint group to own the building, but if any one business has even 1 cent more invested in the building, that company could claim majority ownership. Simon Properties (a large mall developer) could buy the building and lease spaces, but given that all the companies would be using the same terminals and equipment and staff, that would be silly to pay a middle-man (and probably more expensive, cutting into operating costs).

Next is gaming licenses. As each operator would be independent (in the scenario you set up), each would have to apply for a gaming license. This is not cheap and rather redundant for all the gaming properties. Assuming NGC doesn't have a problem with that, the next step is approval for the games. This should be relatively easy, as it seems craps and roulette would be the games of choice. You could also, theoretically, expand to all games, although 139 hands of BJ would take a while to deal and move rather slowly. Slot machines would be a much better fit, but that's basically what the Brick and Mortars (B&M) casinos are doing with the newest machines.

You've finally jumped through all these hurdles and now you are ready to start gambling. But what about those promotions? Well to change odds on any game requires NGC approval as well. This would have to be done in advance, so each company would know what the other is doing. In your scenario (and assuming they all follow this), Riviera starts at 31-1, then Stratosphere goes to 32-1, and so on. Eventually there comes a breaking point (let's say 50-1 for one roll only). Some company out of the group will get hit badly and the rest will retreat in fear of the same fate.

I could go on, but I think what I've said should cover most of the problems with the issue. The only places I see such a venue even getting off the ground (in a true casino-type setting) are places that are competitive gaming markets. These include Las Vegas, Reno, Atlantic City, Tunica, Biloxi, Blackhawk, Detroit and Lake Tahoe. These are all markets where the casinos are so close to one another they have a reason to want to compete. However, LV Strip is saturated by two companies (Caesars and MGM). Same goes for AC and Tunica, and to a degree, Lake Tahoe. Remember the idea only works when it's true competition going up against another (meaning Luxor and Excalibur aren't competing against each other).

The only real world, potentially successful markets for this idea would be places where "Internet Cafes" or "Skill game parlors" are utilized. However, those places can operate at a much higher HE since they are probably not the most legit. Further, they only succeed in states that don't have casinos, b/c as soon as the casinos come, the state shuts them down super fast. I live in Ohio, and the Skill Game parlors are everywhere, and they must bring in some money or else they wouldn't exist. But I guarantee you two companies are not going to team up for the idea you suggested, and they do their best to keep a low profile in abandoned strip malls.

I hope you haven't put any money into this idea, because the probability of it succeeding is extremely low, in my opinion. If you have, I wish you the best, but I wouldn't get your my up.

Well thanks for that awesome reply, WoV, I owe you some disc golf discs whenever I see you! Are you in Vegas?

In truth, you have put way more thought into the bussiness implementation than I ever have.

I have put my time into the software that makes this possible.

I'm not sure if you read my post to MathEx, but this capability is a rare technical achievment (MathEx and a bunch of pure-ists might disagree).

But stepping back, in my mind, the only way to reduce the costs of live gaming must somehow involve chipless wagering. I think the concept is starting to dig in.

I dont know why a big company like Station Casinos still thinks they need to have 6 craps tables in every one of their properties... why don't they just have one "big game" as I call it in each casino, and have the other 5 casinos in town also brodcast THEIR big games to all 6 casinos... customers get to play all 6 live games (1 local, 5 remote), always filled every time, they can even roll the dice and be tipped by all the players in all the casinos, and Station only needs to run 6 tables vs 36. And BTW, those 6 tables are each being manned by one "unskilled" stickman, and the security cost drop to nill because there can be no player-to-player theft and any dealer theft is hard to get away with.

Talk abut your cost savings, and that's without even adding the competitive gaming aspects.

Why doesnt somebody make this proposal to the Station casinos and see what they say, and then approach old ShuffleMaster and see if they can hook their system up to a simple multiple-site video feed.

Why am I not worried about this idea being stolen / copied ? I'm not worried about it, my system has capabilities beyond any of what I've already talked about, and those are patent pending concepts.

I can demo all of this for you LIVE right now if you like, I can even demo the "live data -reloads" proving that "warm starts" of live gaming operations is definately feasible. I showed this stuff to the Wizard last year live at the Red Rock casino.


Thanks again for your response.

Quote: thecesspit

Where's the incentive for the casino to end up in a direct competition like you describe?

Casino's don't compete on price. They compete on the experience you get for the price. The experience is different at each joint, and I reckon that's the major differentiation between the LV casinos. Yes, some of this is price/offers, but a lot of it is surroundings and service.

I'm not your target market, but the scenario you describe sounds unappealing to me.

HMMM.. alright, how about this idea used for on-line casinos? I know when it comes to Craps, right now its not the live interactive kind, but what if it was? What if the "on-line" casino WAS the gaming malls themselfs, syndicated out to whomever wants to play, and NOW the on-line customers know its for real, unlike playing on-line craps against a suposid RNG in the computer owned by the casino being played against.

If the gaming mall can't get even one casino to risk money in a competitive way, my systems also have an option that allows any player playing the game to press a botton that says "BE THE HOUSE". If they press it and if they are approved (bankroll, etc), they assume the risks of the house in the subsequent shooter's roll (they can't be the shooter, and they can't do any wagering on it)... the request to "Be the house" is queued up, and anyone wanting to take the risk of a shoot of the dice can do so, and thus the gaming mall won't need any casino to sign up at first. I would put this rule in place and then allow casinos to take any risk ONLY if they are willing to participate in live competitive gaming and offer at least as good a game as the gaming mall already provides.

My whole focus is on the end user getting the very best deal and SCREW the friggin casinos!

Of course the gaming commision would have another field day, but that's another story.

Thanks for your interest!

Quote: pacomartin

...

There is no evidence that competing over house advantage grows the overall market.

It may be a short term panacea for one casino, and clearly some players make out, but it's not clear that you can grow the market that way.

If the Internet piece of this can be achieved, it would grow the market. Please see the reply to CessPit, this is not really about growing the market, its about letting gaming take full advantage of modern technology, and part of this is standardization of the gaming interfaces that allow such exchanges and inter-vendor plug-in abilities, handicapped access, the whole 9 yards. ONE set of standards should be used to define the entire system and allow OPEN ACCESS by any vendor who wants to join in and compete. Once that is accomplished the end-user costs will plummet even more, so instead of .4929 to .5070 house edge on the pass line, it will be more like .4993 to .5007.

Like I said before, screw the big casinos!

In my opinion, the days of keeping secret the FACT that casinos all make money upon the ignorance of their customer's (about basic probability and statistics in gaming) are numbered. I think the concept of supporting a huge resort like the Excalibur upon these income sources (your average 7 out of 10 gamers who haven't a clue) is also diminishing.


Thanks for your interest.

Quote: discflicker

In my opinion, the days of keeping secret the FACT that casinos all make money upon the ignorance of their customer's (about basic probability and statistics in gaming) are numbered. I think the concept of supporting a huge resort like the Excalibur upon these income sources (your average 7 out of 10 gamers who haven't a clue) is also diminishing.

No disrespect to your opinion, but I think the opposite is true. Casinos are seeking new gamblers who don't have a clue about house edges by offering more options outside of the casinos (at least in Vegas, but to a degree, across the country and world). As nearly every responder has posted, the experience of playing craps in a casino cannot be simulated on the screen. The technology may be there, and you may have developed a fantastic system, but your "screw the big casinos" concept isn't going to fly, unless it gives private individuals an opportunity to enter the market (and I'm not talking about the banking option you are referring to).

To put it another way, think about online retailing. Logic says that EVERYBODY should shop online, since you can get cheaper prices and low overhead. A very small faction of the population shops online exclusively (say 3%), about 10 % shop online frequently, another 22 % shop online semi-frequently, 35 % shop online infrequently, and 40 % shop rarely or never shop online. Even those in the 10 and 22 category still go to stores to check products out in person.

Stores like JCPenney's and Sears are trying to capitalize on this trend, setting up computer kiosks where you can place online orders in the store. Of course, the technology is primitive by what you've developed, but the marketing side to the consumer is basically the same result. It may streamline processes, it may save on inventory and lower costs associated with shrink and delivery, but in the end, the consumer still wants to experience shopping.

Casino patrons still want the casino experience, but electronic gaming hasn't replaced traditional gaming. And players aren't boycotting casinos to the point of changing odds to player's favor, so while you may have a small faction of the population (3% of the gambling population is VERY small, and probably too generous) who would like the idea, you have basically created a Wide-Area system of Rapid Roulette or Rapid Craps.

It's a novel idea, but the real-world applications and hurdles are simply too great, even with the modifications you suggest.