(Note: The author originally published this article in the former Casino Enterprise Management Magazine, March 2013. Basically, the article is the same with a few changes to reflect the passage of nine years. This article must have fallen on deaf ears since the industry still makes the same mistakes almost a decade later.)
Every year the casino industry in North America loses millions of dollars to card counting. However, it’s not a group of college students who are doing it. It’s not a congregation of blackjack-playing Christians. Nor is it a collection of computer nerds using concealed blackjack computers.
It’s actually an assortment of individuals who work inside the casino industry. They come in a number of shapes, sizes, genders and backgrounds, and are totally overlooked by game protection professionals tasked with safeguarding the casino’s blackjack games. You may know them by other names such as table games managers, casino managers, casino operation vice presidents, and a smattering of general managers as well. It happens to be most anyone who has influence regarding the establishment of game procedures that dictate the dealing process of the game of blackjack.
Why? Because it isn’t the professional level card counter who is costing the casino money, it’s the casino executive who is hamstringing blackjack’s profit potential. A number of procedures in use today, procedures that have been established to deter loses from card counters, cost the casino industry millions every year. These procedures might prevent loss to a handful of card counters, but they limit revenue production to hundreds of thousands, if not millions of “square” or regular casino blackjack customers.
How Many Good Card Counters Are Out There?
Over the past 60 years, we casino executives have perpetuated the belief that the overall threat to the casino industry is card counting in blackjack. Why not? Almost every book you pick up on the game of blackjack goes into detail about the advantages of keeping track of the dealt cards and using that information to gain an advantage over the casino. Hollywood has released a number of movies centered on educated blackjack players (the “good” guys), attacking the casinos (the “bad” guys), and walking away winning millions of dollars. Millions of people are exposed to the technique of card counting. It’s in magazines, on the internet, in books, and on TV.
An overwhelming majority of persons who try to learn card counting lose money. Novice card counters lose money at the same rate as the average blackjack player. The more sophisticated “semi” professional counter plays break-even at best. The professional level counter, the player who knows how to count flawlessly, has mastered all the technique’s nuances, and has access to a bankroll which allows him or her to place higher limit wagers during advantageous situations, is the only class of card counter who can achieve a long-term advantage over the game of blackjack. However, the professional card counter’s presence in the casino is very limited.
After discussions with several advantage players, I have been informed that the number of professional level card counters in North America, players who make their living purely from counting cards or shuffle tracking, is probably less than 100. Even though only a very tiny group of people in North America (about one in three million) have progressed to a level where they can beat the casino through counting cards, many casino executives find that this threat still needs to be mitigated through a series of game protection measures that for the most part reduce blackjack game decisions. Why are we targeting the very few at the potential profits of the masses?
Are We Losing Money Trying To Protect Against a Minimal Threat?
The answer is “yes.” We focus on the imagined threat of approximately 100 professional level counters and literally ignore the profit potential from the other 200 million possible casino players. Card counting game protection procedures are designed to reduce the card counters advantageous situations. At the same time these opportunity minimizations reduce the number of total game decisions. Reducing game decisions per hour reduces revenue potential per hour. For example, a midsized North American casino has the potential to increase revenue by $100,000 per year if they can gain an average of one additional round of play on their blackjack table per hour. If a midsize casino can increase the number of rounds dealt from 70 per hour, to 71 per hour, their operation has the ability to produce an additional $100,000 in blackjack revenue (win) per year.
In the same instance, a reduction of rounds dealt per hour cost the casino the same amount of money. For example, many casinos incorporate the totally worthless process of “plugging” the unused cards in the multiple deck shoe games into the discard holder. They do this regardless of whether the cards are manually or machine shuffled. What’s the cost? On the average it takes 8 seconds to complete the plug. If you shuffle four times an hour, it cost you about 0.6 rounds an hour. If you employ all multiple deck blackjack games using the same plugging procedure, it is costing you $60,000 annually. And that is if your dealers aren’t wasting more time looking around the casino and taking short breaks.
Following are a list of costs in rounds per hour of different procedures used in blackjack to mitigate the threat of card counting or shuffle tracking.
The reduction of table decisions
• Diminished deck penetration (shoe and pitch games). On a manually shuffled game, the reduction in deck penetration of ½ deck (26 cards) cost about 2 rounds per hour. On machine shuffled games about 1 round per hour. It’s a common belief in our industry that reducing the percent of deck penetration will increase profitability. This is absolutely NOT true. Limiting penetration lessens revenue. Increasing penetration increases the number of decisions and increases revenue potential. Limited deck penetration is the biggest revenue killer in the industry. For regulatory people, this is the biggest tax potential killer as well. On the opposite side of the coin, an increase in deck penetration will increase revenue, ergo increase tax revenue.
• The use of “No Mid-Game Entry.” Utilizing the policy of no mid-game entry after the first hand is dealt on a multiple deck shoe game costs rounds per hour due to the average blackjack player’s inability to wager. What no mid-game entry does is limit a customer’s ability for spontaneous play, i.e., you’re instructing them when to gamble. On double and single deck games, the effect is not as bad; however you can subtract at least 1 round per hour if you use this on hand-pitched games only. This becomes more expensive if you also restrict number of hands played during the deck. Your best course of action; throw the signs away and use table minimum limits to keep “ploppy” blackjack players from jumping in on games played by higher-limit customers.
Discouraging customer participation
• Cutting the shoe in half to gauge the player’s reaction. This is a countermeasure that is used when an uneducated casino executive wants to view a suspected player’s reaction to severely reduced deck penetration. If the player’s reaction is to quit playing blackjack and leave, the uneducated executive claims that he or she has chased a card counter off the table. More than likely, the executive has chased a good customer away who does not like the decrease in hands played per shoe. The cost for using this tactic can’t accurately be estimated; however the cost of losing a good, higher limit player will cost the casino thousands of dollars over the next several years. That doesn’t include the cost of diminished deck penetration on the other customers at the table who are collateral damage of this inappropriate gaming decision. Note: In New Jersey, casinos are not allowed to back off skilled players. In this situation, reducing deck penetration should only be used if the player in question has been confirmed as a professional-level card counter.
• Flat betting a specific customer. Here’s another method that is used in an attempt to discourage a suspected card counter. Although flat betting a blackjack player does not affect other players at the table, it does change the atmosphere at the game. I strongly recommend not using either of these two countermeasures (unless you’re in New Jersey). If the player has been identified as a professional-level card counter, ask them not to play. If you are not certain if the customer has a long-term advantage over the casino, allow them to play unmolested until you can confirm their professional playing level.
The number of professional level card counters in North America is very few. In most cases the casinos lose money using hand decision killing procedures that are targeted to a minute sector of blackjack players. These procedures result in reduced game production and cost the casino industry millions of dollars each year. The card counter countermeasure of poor deck penetration is the primary culprit. Unnecessary pre-shuffling antics, as well as uneducated use of play discouraging countermeasures contribute greatly to this loss as well.
The wise casino executive understands the gains created through increasing hand decisions in blackjack. By forgoing former costly and irrelevant game protection procedures, the educated executive will experience a substantial increase in blackjack revenue over the long-term.
Final note: Almost all smaller or mid-sized table game operations (low limit) would be better off forgetting that card counting exists. By ignoring the threat from counting, they would deal deeper and shelve all card counting countermeasures and earn up to $250,000 to $300,000 more in revenue annually. Any residual cost from the occasional successful card counter, probably less than $100,000, could be easily absorbed by the additional revenue gain.