Digging for the Holes

Someone associated with a gambling site called casinoguru.com posted on gamblingwithanedge.com in response to one of my blogs:

You can’t really win money unless you bet everything at once during the first play and win. These games are somehow set to give casinos a certain advantage in the long-run. Otherwise, the owners of the casino would be losing money by running those games.

I strongly disagree with that and today I’m going to explain why.

The post presumes the house has a built-in edge “somehow.” Were that the case, every bet the player made would be negative EV. The more such bets the player made, the more EV he would lose, which over time equates to the more money he would lose.   

My whole philosophy of gambling is that sometimes the casino does NOT have the edge. I search for those times and only play when I believe I have the advantage. The slot departments and marketing departments of casinos are run by humans, and sometimes humans make mistakes of various sorts.

There are unlimited ways that casinos can make mistakes. Here, in no particular order, are areas where mistakes are made:

1. Stacking Promotions — Most casinos have a number of promotions going on simultaneously. If your play can receive multipliers for one or more things, be eligible for three drawings, receive a free buffet, and earn bonus tier credits, plus there’s a hot seat promotion going on, it’s possible that no one promotion is enough to put you over the 100% threshold, but the sum is.

1. New Promotions — If the casino has run the same promotion every April for the past seven years, there’s a good chance the bugs have been worked out and this is indeed a money maker for the house. But sometimes a new promotion is introduced into the mix. Players have one or two times seeing this promotion and finding errors before those errors are corrected. Now is the time to study the rules carefully.

1. Change in Management — The new guy has some new ideas. Sometimes those ideas aren’t so well thought out. The old guy did it a particular way for a reason. If the new guy doesn’t understand those reasons, opportunities for the player can exist.

1. Grand Openings — This is related to the previous paragraph. Some of my best results over the years have been when new casinos open — and the employees in charge were second-in-command at other places previously. Every second-in-command believes he is qualified to be first-in-command if only given the chance. Not all of them are correct.

1. Assuming All Machines are the Same — Let’s say a casino’s average hold on video poker is 4%. It’s easy to conclude that if they offer a 2% promotion they will be okay, especially if they get a lot more business. The actual machine mix, however, includes some machines that hold 1% and some that hold 7%. Although the average is 4%, the players who receive a 2% promotion on a 1% game are going to come in and hammer those machines. It’s possible to lose money on this promotion even though they added a 2% promotion to a 4% floor.

1. Assuming All Players are the Same — The original poster made this kind of mistake. He assumed all players were the same so that a casino could not make money by offering games that were “too loose.” In games based on skill, it is quite possible for the smartest players to have an advantage while overall the house makes money on a game.

1. Different Times — Let’s say the casino day goes from 3 a.m. to 3 a.m. It could easily be that some promotions are geared to the casino day and some are geared to the midnight-to-midnight day. Between midnight and 3 a.m. promotions could be doubled up that the casino did not intend to be doubled up.

1. Slot Department is Arguing with the Marketing Department — At the best-run casinos, video poker promotions are designed with the slot department and marketing department both having input. This isn’t always the case at every casino. If the slot director is shut out from those meetings, for one reason or another, this can lead to opportunities for the player. The player must know the floor and know which machines will best benefit from particular promotions. Befriending the slot director and listening to his problems some of the time can give you insight into this.

1. Errors in the Rules — Writing accurate rules with no holes in them is not easy. Winning players study rules and look for things that can work in their favor. If you’re not reading the rules for every promotion carefully and more than once, you are leaving money on the table. Part of the preceding sentence includes being able to recognize an error when you see one. Not everybody can do this, but the ones who can do better than the ones who can’t.

1. Player Tracking System Idiosyncrasies — Let’s say Wednesday is a point multiplier day and Thursday isn’t but has some other promotion going on. If your card remains inserted after Wednesday becomes Thursday, are you still getting the multiplier? Some systems yes. Some systems no. You have to figure this out for yourself.

1. Extra Benefits for Free Play — Let’s say you earned $250 in free play on January 25 in a drawing and the free play is good for a month, and when you play off your free play you do not earn points. In February at this casino, if you hit a royal flush you get a logo jacket. It makes sense to wait until February to play off that free play. It’s the same amount of play either way but waiting gives you an extra opportunity to get that jacket.

1. Wrong Pay Schedules — Every now and then you see an outlier in a casino where the casino has inserted a game that is a percent or so looser than every other similar machine on the floor. Probably a mistake. Probably won’t last long. But it can be an opportunity while it lasts.

1. Video Poker Machines Set as Slot Machines — Many casinos pay different amount of player club points for video poker than they do for slot machines. (Hypothetically, video poker gets a 0.2% rebate while slots get a 1% rebate.) When the MGM Grand in Las Vegas made this mistake back in 2000, I played a lot and was awarded an extra $75,000 in free play along with two P.T Cruisers.

1. The Promotion is Too Complicated for the Casino Employees to Administer Correctly — If one or more employee gives you more benefits because of misreading the rules, you keep going back to those employees.

1. The Correction Mechanism is not Symmetrical — If employees make mistakes in the houses favor, players speak right up. If employees make mistakes in the players’ favor, players tend to keep quiet about it.

1. Be Smarter than the Casino Decision Makers — It’s helpful if you are. Casino promotions are often a battle of wits between the casinos and the players. Playing video poker well certainly doesn’t require being a genius. Exploiting casino promotions to their utmost probably does.

1. Sometimes It’s Better to Not Ask Questions — If you find a hole in the rules, it is usually a bad idea to ask questions about it beforehand. If it’s indeed a hole, the casino will say thank you very much, fix the hole, and you receive no benefit from finding that error.

If you go ahead and exploit that hole and then discuss it with them afterwards, you have a much better chance of getting paid. And you also have a much better chance of getting kicked out of the casino if they aren’t “good losers.” You need to make a calculation beforehand as to the likelihood of collecting how much money compared to the likelihood of being thrown out. If the error is big enough, go for it!