Media coverage in Las Vegas Sun

Liz Bentson picked up some of my comments in an article in Las Vegas Sun. The other side of the story is the massive increase in baccarat, but she would like to do a separate story on that, including the mystique of the folding and bending the cards.

When we were talking Liz mentioned that she quoted The Wizard once about participation games having lower payback then plain old slot games. She said that she got some nasty feedback from the slot companies. I'm sure she did. People don't like it when you poke their golden goose.

I talked to Liz about the rock bottom revenue and operating income that was generated at Circus Circus, Las Vegas in 2009. It was an example of a non-baccarat casino that was just barely making a profit. I listed it as a casino that was now in danger because of plunging revenue in blackjack, slot, and other non-baccarat games. She declined to speculate in print about the potential failure of the largest hotel in history.

BTW: Circus Circus in Reno is doing equally badly.


Nevada casinos are making a lot less money on nearly all of their games except for baccarat. A surprise big loser for the casinos: blackjack.

While gaming revenue as a whole has plummeted to 2004 levels, blackjack which generated about $1 billion last year has fallen to levels not seen since the late 1990s. Blackjack, the biggest moneymaker among casino table games, generated $996 million in 1998.

Blackjack revenue fell 20 percent last year, on top of a 12 percent drop in 2008 from the previous year. The games also are holding less for the house than they did a few years ago, or about 11 percent versus 12 percent in 2006.

On the Strip, blackjack is down 34 percent from its peak, while slots are down about 20 percent, according to calculations by Frank Martin, a San Diego-based mathematician and gaming analyst.

Martin attributes some of the decline to backfired attempts by casinos in recent years to make blackjack games more profitable. These include the spread of 6-5 odds games and a proliferation of specialty blackjack games and side bets with worse-odds jackpots that attract novices while turning off seasoned blackjack players.

Unlike slots, where the payback setting is a mystery, blackjack has to advertise the rule changes that increase house edge, Martin said.

The rapid descent of casinos biggest moneymaker in table games is a bad sign, especially for older or smaller casinos that can't afford other attractions like baccarat, which is attracting Asian players with money to burn and other high rollers who prefer the mystique and relatively little decision-making involved in baccarat versus blackjack, Martin added.

Do you think this trend could come from the fact that with high unemployment recreational gamblers are no longer flooding in and hitting up the bj tables? With the amount of foreclosures on houses in the Vegas area, locals who frequent the strip, as well as vacationers from other states come to think of it, could just be staying away.

Im not blaming the recession for all the problems Las Vegas has, as that would be naive, but I would definately say it changes peoples priorities with regards to disposable income, especially when there is a lack of it.

Or could it be down to more educated gamblers avoiding 6-5/h17 games and proliferation of side bets as mentioned?

I come in here with absolutely no facts, and just personal opinion and observation.

I believe it has 90% to do with the economy. I went to the hard rock a couple of weeks ago ready to play, all I could find were (full) tables of 6-5 with a "hot" dealer and a ton of tables that restricted doubling down/surrender/etc. Still, the majority of people, don't really understand how badly they can get hampered by these rules. I also remember a generally intelligent friend who doubled down on 12, he won't do it because of how much shit I gave him. I can't compare the intelligence of players 20 years ago to today, but those today aren't that smart...

One way you could find this out is look at the profit margin from 10-15 years ago (pre-internet) to today's profit margin on a game like blackjack. I think it was mentioned today's is 11% or so? You'll want to find some kind of a non-dimensional number that can negate inflation and that one seems like the best option. I don't know where to get those kinds of stats, but I'm sure someone here does.

Quote: pacomartin

When we were talking Liz mentioned that she quoted The Wizard once about participation games having lower payback then plain old slot games. She said that she got some nasty feedback from the slot companies. I'm sure she did. People don't like it when you poke their golden goose.

I'm confused. Doesn't that comment seem to suggest that slots are a better bet? Of course, that in itself is questionable. Or did you mean to type "higher"?

Quote: Croupier

Do you think this trend could come from the fact that with high unemployment recreational gamblers are no longer flooding in and hitting up the bj tables? With the amount of foreclosures on houses in the Vegas area, locals who frequent the strip, as well as vacationers from other states come to think of it, could just be staying away.

This has been knocked around on other threads, but, didn't the decline in BJ revenue begin before the recession? Ditto for other casino income.

A lot of Vegas' decline is due to competition from hundreds of casinos nationwide that didn't exist 5 years ago. People don't need to go to Vegas to get their gambling fix.

Quote: DJTeddyBear

Quote: pacomartin

When we were talking Liz mentioned that she quoted The Wizard once about participation games having lower payback then plain old slot games. She said that she got some nasty feedback from the slot companies. I'm sure she did. People don't like it when you poke their golden goose.

I'm confused. Doesn't that comment seem to suggest that slots are a better bet? Of course, that in itself is questionable. Or did you mean to type "higher"?

I think he means "Participation" Slots have a lower payback rather than "Plain old Slot Games". Participation Games (Slots) do not refer to table games, but a slot that the manufacturer gets a cut of the winnings, rather than selling the machine to the casino outright.

Frank, Congrats on getting a mention in the LVRJ. I was intrigued by your Baccarat post in another thread and decided to investigate myself by downloading the strip figures for the past 3 years. Rather than look at total revenue, I decided to look at table games as a % of total revenue. The results are below. I excluded slots from these totals



What is interesting is that craps and roulette have remained quite flat at about 4-5%. Bacarrat is indeed making an marked increase. Blackjack is decreasing indeed over time. But I am interested more in your explanation that it's the introduction of 6-5 that is causing the issue. The number of tables has decreased overall by about 2% in the past three years despite the increase in overall games 1400 / 2822 in January 2010 vs 1414 / 2747. The win % is trending from about 12% 3 years ago to 10% today.

Meanwhile, baccarat has increased from 184 to 238 games in the same period. And the revenue from Bacarrat has really kicked it up in the past six months with fairly gigantic swings.

Quote: cclub79

Quote: DJTeddyBear

Quote: pacomartin

When we were talking Liz mentioned that she quoted The Wizard once about participation games having lower payback then plain old slot games. She said that she got some nasty feedback from the slot companies. I'm sure she did. People don't like it when you poke their golden goose.

I'm confused. Doesn't that comment seem to suggest that slots are a better bet? Of course, that in itself is questionable. Or did you mean to type "higher"?

I think he means "Participation" Slots have a lower payback rather than "Plain old Slot Games". Participation Games (Slots) do not refer to table games, but a slot that the manufacturer gets a cut of the winnings, rather than selling the machine to the casino outright.

Duh. In the back of my mind, I knew what "participation games" means. But yeah, at the time I was thinking table games.

Quote: pacomartin

Martin attributes some of the decline to backfired attempts by casinos in recent years to make blackjack games more profitable. These include the spread of 6-5 odds games and a proliferation of specialty blackjack games and side bets with worse-odds jackpots that attract novices while turning off seasoned blackjack players.

Unlike slots, where the payback setting is a mystery, blackjack has to advertise the rule changes that increase house edge, Martin said.

The rapid descent of casinos biggest moneymaker in table games is a bad sign, especially for older or smaller casinos that can't afford other attractions like baccarat, which is attracting Asian players with money to burn and other high rollers who prefer the mystique and relatively little decision-making involved in baccarat versus blackjack, Martin added.

I just don't know if the data supports these statements. It would be great to see the revenue by type of blackjack game. Even though 6-5 blackjack does suck, there are plenty of people (mostly novices who don't know better or craps players who have a betting system where odds don't matter :) ). The side bets you would think would also bring in revenue, so you would expect to see the win % creep up since there are worse games out there. Take Caribbean Stud and 3 card, which are 3.5 - 5% house games. They have win %s between 20 - 30%. If anything, with the win % decreasing, you would think that there are more players hammering the 3:2 games low advantage games.

Maybe I'm faulty on my logic however and there are other factors looking at the win % on table games. Perhaps the volatility is decreasing and more people are choosing to leave when they're ahead. I just don't know if you can attribute blackjack's decline to a proliferation of 6-5 games and turning off seasoned blackjack players. Maybe a proliferation of other games or just a general decrease in the popularity of the game is causing the decline. How do you know?

Why can't older or smaller casinos afford baccarat? Certainly I would understand that Asian players would be attracted to different properties. But with the proliferation of the revenue, if I was an operator, I would be spending the capital to get the game in and put it in a very attractive corner of the casino. Indeed the number of baccarat games has risen in 2009 to factor in this increase.

Quote: boymimbo

The side bets you would think would also bring in revenue, so you would expect to see the win % creep up since there are worse games out there.

They DO bring in revenue - from the low-rollers. They, in turn, tend to admonish people who don't bet the side bet when they catch a hand that would have paid. That doesn't help keep the seasoned player, who is generally playing at higher levels, at the table.

Quote: boymimbo

...you would think that there are more players hammering the 3:2 games low advantage games.

Only if they can find it.

Regarding the increase in baccarat play, is it possible that baccarat play is increasing in Vegas because players can't get that game in their local casinos? I've not paid much attention, but I don't recall seeing baccarat as an option at the two or three Indian casinos I have been in over the last couple of years.
If a player is making a trip to Vegas, and they can play BJ any time at their local casino, wouldn't they perhaps be inclined to try baccarat?

Quote: boymimbo

I just don't know if the data supports these statements. It would be great to see the revenue by type of blackjack game.

I was pretty careful to say that some of the decline is attributable to the odds change since I did not have any objective data. I tried to look at percentage declines downtown vs the strip because there are very few 6:5 games downtown. In fact there was less percentage decline in blackjack, but there was also a lower percentage decline in all other forms of gaming. So I couldn't say anything conclusive,

I think that the cumulative effect of small rule changes like "Reno rules", hitting on soft 17, etc. means that a lot more people are coming to Vegas and simply soured by the game.

Quote: RaleighCraps

Regarding the increase in baccarat play, is it possible that baccarat play is increasing in Vegas because players can't get that game in their local casinos? I've not paid much attention, but I don't recall seeing baccarat as an option at the two or three Indian casinos I have been in over the last couple of years.
If a player is making a trip to Vegas, and they can play BJ any time at their local casino, wouldn't they perhaps be inclined to try baccarat?

I think this speculation is very significant. People gamble all the time now, in local casinos and on the internet. When on vacation in Vegas they simply don't want to spend much time gambling. They are more interested in the pool, the nightclubs and shopping.

All casinos can afford mini-baccarat which offers the same rules. Atlantic City had 140 mini-baccarat games. But mini-baccarat has dropped by even higher percentages than blackjack. It leads me to believe that it is not a case of gamblers switching games, but a new class of gambler who is attracted by the mysticism of baccarat. They want to bend and destroy the cards. You can't sit down to a mini-baccarat game and tear up the cards as you use them.

They crave that kind of near religious experience. Hard Rock Cafe completely redesigned their casino because the original design was supposed to be a hip way to wander out of the concert halls and pop into a table game. It was very noisy and trendy. They found that they couldn't attract the Asian gambler who plays like he is reading a financial report. They had to provide some quiet, and distraction free spaces.

Quote: DJTeddyBear

This has been knocked around on other threads, but, didn't the decline in BJ revenue begin before the recession? Ditto for other casino income.

The BJ revenue on the strip began to decline after October 2007 which was just at the beginning of the recession. Slot revenue began to decline about 8 months later, and baccarat almost 12 months later. But baccarat revenue only dropped for 7 months before it began to recover. With the opening of ARIA in December it has soared to record levels surpassing any historical revenues for the game.