Posted on 33 Comments

Video Poker and The Golden Rule

According to Wikipedia, “The Golden Rule is the principle of treating others as one wants to be treated. It is a maxim that is found in most religions and cultures. It can be considered an ethic of reciprocity in some religions, although different religions treat it differently.”

I’m not here to debate religion. Consider, however, the following:

  1. A juicy promotion begins at midnight. There are only a few machines that pay well during that promotion. This means only a very few players will get to play the good machines during the promotion, and most will be shut out. You get to one of those machines at 6 p.m. and play the machine slowly. This guarantees you will get to play the desirable machine and others won’t. After midnight you play much faster.
  1. Perhaps the same situation as above, perhaps a different one. You make a deal with another player to “take over” your machine while you sleep, and then give it back to you. Eight to ten hours later, you return the favor. This keeps the machine “in the family,” and others who want to play it, can’t.
  1. It’s a drawing with physical tickets. You’re a proponent of the theory that folding the tickets before putting them into the barrel gives you a better-than-strictly-random chance to win. But anything that increases the odds in your favor, decreases the odds of other players.
  1. A restaurant where you get comped meals has the policy that on your birthday, you get a free piece of Death by Chocolate cake, with forks for everybody else in your party so you can share. You claim about four birthdays a year at each restaurant that has a policy like this. This dishonesty reduces the profits of the restaurant owner for your benefit.
  1. At one casino, playing $20,000 coin-in a month maximizes the benefits you receive. You obtain ten multiple IDs and have a player’s card in each of them. This way, you can get far more benefits from this casino than the casino had designed.
  1. A casino ends a multiple point promotion at midnight, but so long as your card is inserted prior to midnight and remains inserted, you continue to get multiple points long after the promotion is intended to conclude. 
  1. You believe that casinos are sleazy organizations and don’t deserve to be treated honestly. So, you look for ways to cheat them.
  1. Someone has left $20 worth of credits on a machine. You insert a $100 bill into the machine, play a few hands, and cash out for $115. 
  1. There are only a few “good” machines available on a progressive bank. You want them for your friends. So you bring out foul smelling cigars and begin to smoke them in the vicinity. When other players leave in disgust, your friends sit down, and nobody smokes anymore.
  1. A floor supervisor taps you on the shoulder and asks if the $100 bill on the floor behind you belongs to you. In truth, you have no way of knowing. But your answer is, of course, “It must be. I pulled money out of my pocket and must have dropped that one. Thank you!”
  1. You’re too sick to go to work and expose people you know to your illness, but not too sick to go to a casino and expose strangers.
  1. You are dealt three aces and hold them, except you know you didn’t hold the third ace firmly. You draw the fourth ace, but the third ace “unholds.” Even though you know it’s your own fault, you call the slot supervisor over anyway and complain about stick buttons.
Continue reading Video Poker and The Golden Rule
Posted on 2 Comments

Colin Jones (S1 E8): Mail Bag

In this episode of my N-part series looking at Colin Jones’s book, The 21st-Century Card Counter, I’m just going to briefly comment on various phrases and sentences that caught my eye. This is like the “Mail Bag” episodes of Gambling with an Edge, or the Potpourri category on Jeopardy.

[p. 26] “I’m not going to argue whether people should or should not gamble for entertainment (though it’s my opinion that gambling is a very high-risk low-reward form of it).” From spending so much time in locals casinos, I’d say that the percentage of gamblers who are problem gamblers—by virtually any definition of the term—is much, much higher than the industry would admit. As a resort destination, Vegas is a different animal. But locals casinos are built on degenerate gambling. That said, I think there is a role for recreational gambling, and CJ underestimates how enjoyable it is for some. CJ is a bit jaded, because blackjack (and baccarat) are not inherently fun games (you wouldn’t play them for no money), and because card counting as a living takes the fun out of the game! One of my old friends came to Vegas with me, and afterwards said, “You’ve ruined Las Vegas for me,” because he could never again see the experience in the carefree, oblivious way that gamblers do. I turned it into work.

Continue reading Colin Jones (S1 E8): Mail Bag
Posted on 1 Comment

Has Japan jumped the shark?

That in essence is the question posed today by Global Gaming Business, in an excellent article by Marjorie Preston. And if GGB is querying the viability of the Nipponese casino market you know things are bad. Even normally bullish Brendan Bussman tempers his optimism with caution as regards the 30% tax on casino revenues, saying “any time you have a tax rate at that level across the board on slots and tables, it’s difficult for any operator to make the numbers make sense. You could say the same thing about Chicago, which is a 40 percent effective tax rate. That’s why everybody’s pulled out of Chicago.”

Already the heavyweights are retreating. Sample verdicts include those of Wynn Resorts CEO Matt Maddox who said he’d withdraw “if it doesn’t make financial sense.” And it didn’t. Ditto Las Vegas Sands CEO Rob Goldstein: “We’re used to writing big checks, but all that money on one [megaresort] makes you stop, pinch yourself and ask if you can get the returns your shareholders deserve.” The only megawatt operator who’s favored to cinch a spot is MGM Resorts International, which will have to invest $9 billion for the privilege. Elsewhere, cities have chosen to go with obscure Canadian private equity firm Clairvest (?!?!?) and Casinos Austria, which doesn’t currently run anything remotely on the scale the Japanese government wants. Sure, Melco Resorts & Entertainment and Genting Group still have a shot at Yokohama but …

Continue reading Has Japan jumped the shark?
Posted on 4 Comments

Illinois springs to life while Ohio erupts; Mohegan Sun jilted twice over

Stop the presses! Illinois casinos actually outperformed 2019 last month by 4%. That’s downright miraculous. They grossed $120 million, led by Rivers Casino Des Plaines‘ $47.5 million, a 28% vault. Harrah’s Joliet was a distant second with $14.5 million (-1%), closely followed by Grand Victoria‘s $14 million (+10%). The prosperity was confined to the northern tier, with Hollywood Aurora up a point to $10 million and Empress Joliet tumbling 20% to $8.5 million. Mid-state, Par-A-Dice slipped 8.5% to $6 million, while Bally’s Corp. will have it’s hands full with Jumer’s Rock Island, which plummeted 33% to $4 million. (Bally’s execs implied on the latest earnings call that they bought it mainly to get in on the sports betting market.) In the southern tier, Harrah’s Metropolis slid 19% to $5.5 million, Argosy Belle was down 8% to $3.5 million and DraftKings Casino Queen declined 11.5% to $7 million. Having two extra weekend days obviously did no harm to the gainers in the marketplace but the losers would surely have been much worse off—though how much worse Jumer’s could get is open to speculation. It used to be one of the best performers in the Land of Lincoln but that was a long time ago.

Incidentally, we now have access to complete numbers from Ohio. To wit, it was a real horserace. Slots-only MGM Northfield Park led with $25 million of a statewide tally of $211 million, up 17% from 2019. Close behind was Hollywood Columbus with $24 million, plus 27%. Jack Cleveland also gave MGM a run for the money with $23.5 million, leaping 38%. Other top grossers were Hollywood Toledo ($21.5 million, +27%), Hard Rock Cincinnati ($21.5 million, +23%), Scioto Downs ($21 million, +34%) and Miami Valley Gaming ($19.5 million, +31%). Other racinos were all revenue-positive: Jack Thistledown ($18 million, +49%), Belterra Park ($9 million, +22%), Hollywood Dayton ($13.5 million, +38%) and Hollywood Mahoning Valley ($15 million, +37%). No, those percentage increases are not typos and we have not been drinking.

Continue reading Illinois springs to life while Ohio erupts; Mohegan Sun jilted twice over
Posted on 9 Comments

My Covid Test

I have a 3-days-a-week gym buddy. We do 20 minutes of aerobics, another 20 minutes with weights, and call it a day. It’s not a rigorous routine, but it’s a lot better than no exercise at all, and we’re both better at keeping the schedule if the other guy is there too.

One night I got a text from him saying he took a Covid test for an upcoming trip and tested positive. He was required to quarantine for ten days so would not be at the gym for a while. 

Continue reading My Covid Test
Posted on Leave a comment

Open season in New York; Ohio, Missouri boom; Scientific baffles

Hero to zero in less than a year.

Rather than face (well-deserved) impeachment, New York State Gov. Andrew Cuomo (D) resigned in disgrace today. Which happened to coincide with the disclosure of the companies which have applied to be online sports betting provider(s) for the Empire State. Cuomo’s not-a-moment-t00-soon departure means that the contenders can hope not to be shaken down or chosen on the basis of how usuriously they are willing to be taxed (isn’t that tantamount to bribe solicitation, guv?). And Cuomo’s obvious favorite, DraftKings, now faces a level playing field. At least that is our hope. The finalists will be Bet365, Penn National Gaming/Kambi, FanDuel/BetMGM/DraftKings, TSG/FoxBet, TheScore and a jumbled combination of Kambi/Caesars Entertainment/Resorts World/PointsBet/WynnBet/Rush Street Interactive. DraftKings still has a very good chance of getting one of the plums, if for no other than reason than it’s riding the coattails of MGM and favorite son Empire City Yonkers. The second Kambi combination platter also has an edge since it contains two other New York brick-and-mortar operators, Rush Street and Resorts World.

“We expect to learn of the winning consortiums, and we believe two will be chosen, in the next 4-6 weeks. Based on the criteria put forth in the RFA, we believe there are obvious front runners from the list, and those for whom the prospects appear dim, based on their track records relative to the RFA selection criteria. That said, it’s New York and anything can happen,” wrote Carlo Santarelli of Deutsche Bank. Yes, anything can happen. Just ask Andrew Cuomo.

Continue reading Open season in New York; Ohio, Missouri boom; Scientific baffles
Posted on 1 Comment

Florida compact sneaks into effect; DraftKings buys out Fertitta

Secretary of the Interior Deb Haaland has jumped the shark. Her department has wisely-washily neither confirmed nor denied the controversial Seminole Tribe compact with the state of Florida, one that gives the Seminoles control over sports betting in the state. As a result, it goes into effect Oct. 15. What this means, practically speaking, is that we could drive across the Florida state line, park at the nearest rest stop, place a mobile wager from the restroom and have it be classified as ‘tribal gaming’ because all such bets are routed through servers on Seminole sovereign land. Yes, a toilet stall on the interstate could qualify as a ‘tribal gaming’ location under the terms of the compact. Haaland must have known this would be a hot potato, as the Interior Department snuck the decision out under cover of darkness (“quietly and passively,” as one newspaper put it). Or rather, they dumped it on the proverbial curb on Friday, the end of the news cycle when nobody would be looking. A court challenge is inevitable and, we hope, successful.

Deutsche Bank analyst Carlo Santarelli showed some skepticism of his own. He wrote, “While the initiative is likely to be legally challenged by numerous parties, and while [DraftKings] and FanDuel have partnered to get a petition signed to get on the November 2022 ballot, the way things currently stand, online mobile wagering in Florida is a monopoly, something we believed was likely to be the case, despite optimism around the skin partners. We believe that optimism should have faded once the DKNG/FanDuel effort to seek a different path got underway, as it essentially implied that both operators recognized that the hub and spoke OSB model via the Seminole Tribe wouldn’t work.”

Continue reading Florida compact sneaks into effect; DraftKings buys out Fertitta
Posted on 9 Comments

Colin Jones: Season 1 Episode 7

That’s a pretty dry title for this post, about as aptly dry as Colin Jones’s “The 21st-Century Card Counter.” But the movie title’s better than the book’s. “Holy Rollers”—not just a play on words, but also an oxymoron that Hollywood loves. Remember that moment when the Preacher gunslinger swaps his clerical collar for a pistol in Pale Rider? And now Netflix has brought us Warrior Nun. It’s very entertaining watching the ostensible pacifist using violence to attain a righteous end.

Christians, who are presumed to have an aversion to gambling, take on the House, trying to stick it to the Man (meaning the casino, not the big G). The result is high drama, and subsequently a blackjack factory at blackjackapprenticeship.com [to which I have no affiliation].

Continue reading Colin Jones: Season 1 Episode 7
Posted on Leave a comment

Maryland goes, goes, goes; Penn flips out; SEC scrutinizing DraftKings

We Americans sure do love us some gambling. Maryland‘s July numbers just came in and it’s 20.5% (!) ahead of 2019. Casinos won $180 million and two extra weekend days obviously helped the tally. MGM National Harbor led with $72 million (+19%), outpacing Deutsche Bank analyst Carlo Santarelli‘s $64.5 million forecast. Maryland Live locked up a 35% market share and $63 million in winnings, up 28%. Penn National Gaming was just in time in reacquiring Hollywood Perryville on July 1, $9 million gross was a 34.5% improvement on two years ago. Ocean Downs leapt 28% to $10.5 million and Rocky Gap Resort‘s $6 million was a 22% gain. And in what has to be a triumph for Horseshoe Baltimore, it was flat with 2019, grossing $19 million. So there’s some hope for it yet. West Virginia casinos nudged 5% above 2019 numbers, driven by a 34% increase in table win. Hollywood Charles Town was up 7%, 1% higher at the slots and vaulting 42% at the tables.

Penn had Wall Street analysts eating out its hand after the latest earnings call. “Memes [and] grandiose proclamations run wild” wrote Santarelli. “Well, this one was interesting. Between the call commentary, 95% of which was focused on a business that, as we have said for some time, will likely never amount to more than 20% of total Company [cash flow], if it is wildly successful, the social media promotion that began immediately, and the post call livestream ‘pumpapalooza’, PENN threw all it had at the retail investment community to promote a transaction, which, in our view, speaks to exactly what we have been saying for some time, the sports, and especially iCasino, strategies aren’t working.” You see, Penn used the quarterly earnings announcement to hype its acquisition of OSB provider TheScore. “We get that PENN needed a tech stack, but buying a media Company for a tech stack, knowing the challenges peers have had buying tech companies with sports betting tech stacks, seems a bit strange, and frankly, risky. We also get that buying a Canada based company, which has billed itself as a presumptive leader in provincial sports betting, once legalized, seemingly makes sense, but if we have learned any lessons from the US market, the willingness to spend and lose is the path to market share gains, more so than media presence.”

Continue reading Maryland goes, goes, goes; Penn flips out; SEC scrutinizing DraftKings
Posted on 3 Comments

Wynn “strong” this summer; MGM returning to form

Wynn Resorts released 2Q21 results yesterday and JP Morgan analyst Joseph Greff called them “strong” in both Las Vegas and Boston. In Macao, eh, not so much. He began by saying “results by region unsurprisingly reflect differences in vaccination rates and mobility/visitation availability.” Wynncore is gaining momentum as the temperature rises, posting the largest cash flow ever since except when it opened. Occupancy hovered around 95% on weekends and in the 80% neighborhood during midweek. “In Macau, limited mobility and small outbreaks continue to pressure travel, unsurprising and similar to 2Q commentary from” Sands China and Melco Resorts & Entertainment. As for WynnBet, it “expects to ramp up marketing ahead of the NFL season,” which seems to be a nice way of saying nothing much is happening right now. Wynncore generated $207 million in cash flow compared to a feeble (and worse than expected) $67.5 million in cash flow from all the Macanese properties. Wynn Macau and Encore Macau only contributed $14 million, while Wynn Palace has finally found its sea legs with a $53.5 million donation. Encore Boston Harbor was a little bit under certain projections at $47 million, though it improves month by month.

Due to a sharp decline in VIP play in Macao, Wynn Resorts is remarketing them as premium mass-market casinos, in order to get pre-Covid revenues without pre-Covid foot traffic. As Deutsche Bank analyst Carlo Santarelli put it, “Las Vegas & Boston shine as Macau remains a waiting game.” Word! “We don’t think we heard anything from management tonight that will meaningfully change the view on the resumption of normalized operations in Macau, with management acknowledging an uncertain timeline, while noting encouraging trend that resemble pent up demand at certain times,” he elaborated. “We expect the Macau names to continue to trade on virus headlines and policy decisions, things we, nor most, can truly opine on with any legitimate confidence.” Back in Vegas, business is fueled by slot fanatics, with coin-in up 37% and table wagering down 3%. Blame the latter on a lack of international players.

Continue reading Wynn “strong” this summer; MGM returning to form