The Cookie Jar Technique

There was a very lucrative promotion at the South Point this past July. To be eligible for the greatest reward, you needed to do two things:

1. Play $60K coin-in (video poker) or $30K (slots) in May and you receive what they call the A+ mailer. For players with a reasonable bankroll, this wasn’t that difficult. The casino has the best video poker in the country (with the possible exception for 25¢ players who play FPDW with 0.25% free play and no other benefits at the Palms). The 0.30% cash club at casino makes a lot of games exceed 100% and the at-least $200-per-month in the A+ mailers is an attractive incentive.
2. Avoid the purge. A number of players at the South Point were excluded from the slot club this spring. Most of these players played at the $60K+ level.

For all players at the South Point in July, earning 200 points five days a week awarded you a spin on a virtual wheel. Rewards ranged from 1,000 free points (worth a buck) to $50 in either free play or a Chevron gas card. For A+ players, however, it was always $50 free play or gas card. It appeared to be random as to which of two prizes you received, but you definitely got one of the two.

It didn’t take long for the A+ players to recognize the pattern. Show up every day between Sunday and Thursday, play $200 through on an even game (99.73% Deuces Wild with a 0.30% cash card was the game of choice for many) and get a $50 bonus. Do it all 20 eligible days and receive a $1,000 bonus that month. Most players who lived in the area were not too busy to show up and collect the bounty.

A friend of mine, “T.J.,” came in every day. On the days he collected a $50 gas card he was delighted. On the days he “only” got $50 in free play, T.J. was irritated. Even though the high percentage of players who weren’t A+ would love to get as much as $50 in free play, getting this award instead of the gas cards pissed him off.

I didn’t understand this. Although there are tax considerations that make a difference, to me fifty bucks is fifty bucks. This was a 25% bonus on playing $200 on an even game and I was delighted to get it. I know that the $50 free play isn’t guaranteed to become $50 cash, you get slot club points on your free play there (unlike certain other casinos) so you’re playing a 100% game. Sometimes the $50 free play becomes only $25, but sometimes it becomes $200. Over the course of a year, the money earned from the total amount of free play awarded comes out reasonably close to that amount in cash.

Not to T.J. He segregates “gambling bankroll” from “money to live on” to a higher degree than anyone else I’ve met (although, frankly, I haven’t had a lot of “how do you manage your money” conversations with a lot of gamblers.) When he moved to Vegas five years ago, he bought a house (paying cash), set $10,000 aside for a gambling bankroll, and vowed that if he ever lost that bankroll he was done gambling for the year. If he lost, he’d place another $10K into his gambling account the following January. All other expenses came out of savings. He has no other source of income and it’s going to be a few years until his retirement money kicks in.

As it turns out, T.J.’s bankroll has expanded to more than $30,000. His skills are considerably better than they were when he moved to Vegas. For the stakes he plays in the games he plays, there is essentially no chance he can lose his bankroll. Fifty dollars in free play would go towards his bankroll, and basically his bankroll is in fine shape already.

The gas cards, however, do not go to bankroll the way T.J. keeps score. Every gas card means $50 he gets to keep in his savings account. It bugs the heck out of him to take money out of his savings account, and gas cards let him keep the money in his savings account longer.

There are a lot of people with regular jobs who use a number of cookie jars to help them budget. A certain percentage of every paycheck goes into the rent cookie jar, or the car payment cookie jar, or the vacation fund cookie jar, etc. If they’ve budgeted correctly, at the end of the month, there is enough in each of the jars to cover the bills. I never used this technique, but I know a lot of folks who did.

My personal technique is different. I have funds in a safety deposit box somewhere and extra money in a checking account. Whether the money comes from jackpots or from writing this column is largely irrelevant to me. (Accounting-wise these are different, but I’m not talking about that here.) I need much larger cash-on-hand than most people because my daily gambling swings exceed $20,000 one way or the other probably twenty times each year. Although there are big swings, over time the sum of the funds has grown. Periodically I take a portion of these funds and invest it in the stock market or elsewhere. I don’t have tags on the money telling me exactly how much came from where.

T.J. appears to be using the cookie jar technique to deal with gambling bankroll versus his “everything-else” bankroll. This leads to some unusual conclusions (from my point of view), but it seems to work well for him.