Throughout different business industries, the technique of developing “risk assessment” projections has gained much popularity for evaluating the level of external threats to specific areas of the business operation. Risk assessment evaluations are required by the federal government to establish the level of risks subject to a financially centered businesses (casinos) regarding Anti-money Laundering (AML) issues. The degree of the risk corresponds with a list of issues that directly reflect the extent of threat from various external sources. The same can be said for cyber security. Companies must develop a comprehensive risk assessment based on the type of information that is collected and held, the type of firewall used to protection the information, and the extent of training provided for the individuals of the company who have access to the cyber system. In fact, companies will not be able to secure liability insurance covering their cyber systems if they have not constructed a comprehensive risk assessment and detailed plan for threat mitigation. Why not have a similar plan for the casino industry regarding threats to the table games?
I wish to write this article by designating a common table game threat to illustrate my point. Probably the most common threat viewed by casino management is the risk associated with the counting of cards in the game of blackjack. Although, I do not look at card counting as a big threat to the casino’s assets (bankroll), a majority of casino executives do. This becomes a great starting point for developing a host of risk assessments based on both legal and illegal threats to all table games.
After much thought on the subject, I developed an assessment based on five different elements of a casino’s blackjack game. These elements are, (1) number of decks dealt, (2) game rules, (3) percentage of total deck/shoe penetration, (4) per spot maximum limit, and (5) the target game’s “basic” mathematical advantage. I choose these five elements based on how a professional level card counter views an acceptable Blackjack game, giving each element the same weight for determining the risk assessment value based on a 1 to 5 scale (five being the highest threat level).
Following is a summary of these five elements:
Number of Decks – The professional counter is attracted to fewer decks of cards. Less decks of cards in use represents a greater percentage of positive situations that can be anticipated by the counter. A single deck has more positive situations in overall percentage while an eight-deck shoe has a much less percentage. Also, less decks used means that the mathematical advantage of the game for the house is also somewhat lower.
Game Rules – Certain game rules make a Blackjack game more attractive while certain rules tend to frighten the counter away. For example, games that instruct the dealer to stand on all dealer 17s is considered “player friendly” while strategy restrictions such as “double on 10/11 only” tend to push counters (and regular players) away. Certain rules are more important than others even though they might be subject to the same change in basic house advantage (H/A percent). Both “re-splitting aces” and “surrender” are subject to a similar H/A percent change (about -0.03 percent), but the surrender option is much more attractive to the counter and is reflected in the need for the professional counter to add an additional six decision indices to the standard “Illustrious 18” used with non-surrender games.
Deck Penetration – Deck penetration is important to both the professional counter and the casino executives. A deeper penetration percentage prior to the required shuffle point increases the positive situation available to the counter, however, it is also important to the casino executive, since it provides the game with increased hand decisions which in turn increases revenue potential. Along with the number of decks dealt, deck penetration is the most important factors considered by the professional card counter.
Per Spot Maximum Bet Limit – There are two reasons why the maximum per spot limit is important. First, the counter does not want to be limited on their possible maximum bet regarding their bet spread strategy. Second, a higher limit means that their maximum bet might not attract as much attention if there are customers wagering larger value bets at the same time. The counter wants to “fly under your radar” as a small fish in the sea, not the “biggest customer” in the casino.
Basic (Strategy) Mathematical Advantage – This advantage represents the casino’s mathematical “hurdle” that must be overcome before the counter can gain the advantage and start wagering more money. The basic advantage is closely associated with the number of decks and rules of the target game; however, decks and rules do not truly reflect the point where the counter can start to wager more with a positive gain. The standard blackjack game is subject to a basic advantage of about 0.5 percent and requires a true count (Hi-Low system) of 1.5 TC before escalating wager levels. Some games have a lower Basic H/A percent around only 0.2 percent and a TC of 1.0 is adequate for profitable wager more.
Following is an example of an average six-deck Blackjack game:
This six-deck game includes hitting soft 17 (h17), doubling after splitting (das), and re-splitting aces (rsa). In addition, it is subject to deeper deck penetration, however it only supports a medium to low per spot maximum limit. The overall risk assessment score is the total of the five elements divided by five, or a score of 3.2. I consider anything under 3.5 as being of average concern especially if there are other games within driving distance that are subject to a higher risk score.
Following is an example of a six-deck Blackjack game that would be considered “risky”:
This six-deck game would be more attractive to the professional counter due to the addition of stand on all 17s (s17), the ability to surrender (ls), a decrease in Basic H/A percent to 0.26 percent, and the maximum bet limit of $5,000. The only counter “unfriendly” change to this game is the 75 percent deck penetration point (cutting of one-and-a-half decks) which some consider standard in the industry. The overall risk assessment score of 4.0 makes this attractive to the professional counter and should see attacks from counters from outside the casino’s immediate market area.
This takes us to the risk mitigation step. In other situations, a high-risk situation requires changes to procedures and/or the addition of equipment. However, in card counting, the two common procedure deterrents, changing rules and decreasing deck penetration, are also detrimental to revenue production. What does the smart table games executive do? My best suggestion is to invest in the proper training. Make sure your floor staff knows the indicators of the professional card counter and your surveillance is equipped to accurately confirm a suspected player (detected by floor operations) is in fact a card counter that possess the ability to gain a long-term advantage over the casino. Steps then can be taken to either discourage or eliminate a confirmed counter’s ability to be a threat to the casino’s bankroll.
Any questions regarding this process to accurately evaluate a specific blackjack game’s risk level through a risk assessment plan are greatly appreciated. Please contact me with any requests and feedback at wzender@aol.com.
