Probably one of the most difficult games in which to rate a gambler’s wagering activity is the game of craps. Not only is the game fast paced and involves a number of customers playing at one time, but wagering is made on a wide array of options, from the pass/ don’t pass/come/don’t come with its low mathematical edge to one-roll “hop” bets that are subject to a house advantage that is 10 times higher. Attempting to correctly determine the theoretical win (T-win) on any player is an accounting nightmare. Not to mention that many player tracking systems are riddled with player tracking formulas that are in error. In error? What does this mean?
Following are three areas of concern which any casino could be falling subject to and blamed on poor logic when determining the actual T-win of bets during a customer’s play at the table. These problems will contribute greatly toward the casino unknowingly inflating reinvestment cost while also reducing the game of craps revenue potential.
How many hourly decisions are in the game of craps?
Many player tracking systems have default numbers pre-programed that are based on limited actual game performance knowledge of the person who originally entered the metric numbers into the system. Take the number of decisions per hour as an example. Most systems have been pre-programed to reflect sixty (60) rolls per hour. Does this sound about right? But, this metric number reflects the rolls of the dice, not the number of the majority wagering decisions.
The number of rolls per hour does not reflect the number of outcomes per hour. For example, the pass/come wager (either “do” or “don’t) is subject to a win/loss decision, not every roll, but every 3.4 rolls. Place bets and buy bets average about the same with 6/8 outcomes occurring more frequently than 5/9 and 4/10. These wagers take in the overwhelming majority of the money that hits the layout. Hard way bets are also multi-roll outcomes and make up the next most wagered bets. The only single roll outcomes are the “proposition” bets, which usually are wagered using the tables lower denomination chips.
Since most of the wagers are multi roll outcomes of three to four rolls, using the “rolls equal decisions” principle leads to overrating a customer’s worth by about three times. The correct number of decisions in the player tracking computer for craps wagering should be closer to 15 to 18 decisions per hour. Definitely not 60!
Counting “odds” bets as part of the average bet.
This is the next area where craps players’ reinvestment is unnecessarily inflated. The pass/come wagers are subject to a house advantage percentage (H/A percent) of 1.4 percent. That means when a player makes a $100 bet on the pass/come (or don’t), the casino expects to win about $1.40 per decision (every 3.4 rolls of the dice). Because casinos allow the customer to place another amount of chips directly behind or on top of the pass/come wager known as “odds,” the casino is providing the player a “free shot” at the casino for that addition amount.
Since these “odds” wagers are paid true odds, the casino has no edge or mathematical advantage on that money. In essence, any amount of money wagered as odds is equivalent to the money that remains in the customer’s pocket. The only thing that the odds wager accomplishes for the game is to increase craps’ outcome volatility and lower the table’s long-term hold percentage. Note: Offering “odds” is a marketing tool for attracting players and has nothing to do (in the long-term) with directly producing game revenue.
This issue would not affect the casino to any great deal at this point, but a number of casinos have decided that they need to either add the total odds wager or at least a portion of the odds wager in with the pass/come bet in determining the customer’s average bet. The reasoning is that the customers think their odds wagers should not be “penalized” and made to sit on the sidelines for average bet purposes. This philosophy is terribly incorrect. If the casino offers a bet where they have no advantage and no T-win, what makes anyone think the players should receive reinvestment value?
Some casinos believe they have bypassed this issue because they are using “adjusted” H/A percent numbers that gaming mathematicians recommend when considering the true house advantage for including odds into the average bet. However, this strategy is flawed as well. The mathematicians forgot to inform their casino counterparts that these computations only take into consideration that odds amounts are only placed after the “come-out” roll. To use this adjusted H/A percent correctly, the average bet is equal to pass/come amount times 100 percent plus the odds amount times 66.7 percent. A pass/come of $100 and double odds of $200 is not an average bet of $300, it is an average bet of $234 [($100 X 100 percent) + ($200 X 67 percent) = $234]. Are your floor supervisors able to make these average bet adjustments on the “fly”?
The bottom-line? Strongly consider forgetting the amount wagered on the odds and only rate the pass/come amount. Strongly.
Is there a difference in taking buy bet commission after a win?
Here is another huge mistake that casinos are making and most do not understand how this could happen. Several casinos in North America have decided to modify their “buy bet” procedures, and take the 5 percent commission fee, not when the bet is made, but subtracted from the “winning” bet as it is paid. I have asked several casino executives from these casinos what the cost is to take the fee on the “back end.” Most have no idea, but they feel any cost will be made up from increase in craps customers.
Unfortunately for them, the cost is quite high. For instance, when a standard buy bet is made for $100 (on 4 or 10), the player hands the dealer $105, $100 for buy wager, and $5 for the buy fee. If there is a “7-out” (which happens 66.7 percent of the time) the casino wins $105. If the point is rolled (33 percent of the time), the customer receives $200, but the $5 fee is taken, and if he wishes to continue with the buy, the player must supply the dealer with another $5. When the buy fee is collected “up front” when the bet is placed, the mathematical advantage of this bet is 4.76 percent.
When the fee is only collected on the “backend,” the player hands the dealer only $100. Losing that amount 66.7 percent of the time. If the point is rolled, the casino pays only $195, retaining the $5 fee only 33 percent of the time. The obvious difference between the two situations is that in the first example the casino receives the $5 fee 100 percent of the decisions, but in the second example, where the fee is only collected on the “back end,” the $5 is only collected 33 percent of the time. This lowers the 4/10 Buy bet H/A percent from 4.76 percent to 1.67 percent, a reduction of approximately 65 percent. By offering this buy fee collection option, will marketing then drive the increase in total craps play high enough to cover the option’s mathematical short coming? Do the math, and if you are not driving the business with this “promotion,” get rid of it (even if it means losing some players).
If you have any comments or questions, please feel free to contact me firstname.lastname@example.org.