Richard Munchkin and I received the following question for our mailbag show on Gambling with an Edge. I think my complete answer is too involved to answer on the podcast, so I’m going to attempt it here. The question was:
Both of you were active APs (I think, anyway) during one of the worst recessions of the last century, in 2008. What meaningful effect did this have on casinos and on your work? Did games tighten up? Comps? Do you have any advice for APs in the event of a deep recession (hypothetically of course…)?
Since my expertise is primarily video poker, I’m going to address that here. But most of what I have to say would apply to any game.
It’s easy to understand why our listener wishes this information. After all, if we know exactly what’s coming, it’s easier to prepare. It’s like a lawyer knowing exactly what the other side is going to say. That’s simpler to prepare for than if the opposition can say anything they want. Unfortunately, life doesn’t work that way.
The 2008 recession you mention was caused primarily by a failure in the sub-prime housing market. There may well be another recession soon, but it very likely won’t be caused by that. In other words, next time will be different than last time.
The 2008 recession hasn’t been the only recent shock to the system. There was 9/11 back in 2001 and restarting after the pandemic in 2020. Casinos made huge adjustments for those situations too. There have been other such situations in the past, and we’re guaranteed to have more coming. We just don’t know exactly when, how severe, and the exact nature of the next such situation.
You have to assume that casino executives are trying to do well for their casinos. They tried things in 2001, 2008, and 2020. Some worked. Some didn’t. These executives attempt to learn from that experience.
Added to this uncertainty, it’s a fair guess that different casinos will try different things — and that most of them will make adjustments on the fly depending on how things worked for them initially.
So, while we can safely conclude that we don’t know exactly what’s coming, there are some things we can do to prepare. Some of my suggestions may be controversial, especially the first one. You are welcome to disagree.
Here’s how I’m preparing:
- Maintain a cash bankroll sufficient to last several months. This will go against the grain for people who believe that since we’re in an inflationary period, we’re losing money if our assets are in cash. That’s true, of course, but assets in the stock market, real estate, crypto, NFTs, etc., can easily lose a lot more. Especially in a recession. There will be casino opportunities. You don’t want to be shut out because your money is tied up.
- Up your game. Some casinos will remove their loosest games. That’s the go-to move for some casino executives when facing hard times. So examine the second-best and third-best games in the casino now. If they’re still positive considering everything, start to learn them. At least obtain good strategies and practice. You may not need to go to a lesser game, but you might. And the more you know, the more you can exploit different promotions.
- Upping your game does not have to be limited to staying in video poker. Whether it’s poker, blackjack, sports betting, slots, or any other game, there are plenty of opportunities to exploit. The more arrows you have in your quiver . . .
- Start reading promotion rules more closely. During a recession, promotions will very likely be different than they are today. Possibly better. Probably worse. If you assume things are staying the same, you’re going to be taking the worst of it.
In addition, the people in charge of rewriting the rules may not give the job the attention it deserves. They will probably start with the rules they already have and make adjustments. This is not as easy as it sounds. Sometimes they don’t change everything they want to change. If you know the rules inside out, occasionally you can talk them into something extra when they goof up.
- Scout. This should always be part of your game plan, but over time you’ve decided that Casino A is good and Casino B is bad, and have stopped looking at Casino B. During recessions, things change. Maybe Casino B will make an adjustment in your favor.
Other casinos loosen up things during the recession because they still want players and players will have less disposable cash. You won’t know until you check. - Finally, don’t blow your bankroll on lousy games. Don’t play unless a game is worth playing. The recession won’t last forever. Things will change again. If you lose your entire bankroll during the recession, you won’t have any left after it’s over.
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Everything Bob listed here should be done, in my opinion, on a constant basis, no matter what the state of the economy may be.
mLife (MGM) has had “Mystery Sundays” (or something like that) for some time, during which you swiped your players card, picked a balloon (or other figure) to reveal your multiplier applicable to your play on that day. The multiplier used to be for tier points, at least 2 x up to 5 x or more). Now it is changed to “bonus dollars” or something like that. Even if you only got the 2 x multiplier (surprise, surprise) it helped in getting to the next tier before the year was out.
Tier points are more valuable than dollars to lose, especially keeping in mind that we earn ZERO points of any kind when we use Free Play (and now Bonus Dollars unless I’m wrong). They know what they are doing.
And, it used to be you earned tier points at a faster rate in Las Vegas casinos than in the other casino meccas. At least it justifed the cost of the flight to Vegas, in a way. Now, same rate of earning everywhere.
I rarely disagree strongly with anything Dancer says, but I’ll take a stand against the “be a jack of all trades” advice. In my experience, the most common way successful gamblers get busted is when they try to adventure far afield from their area of expertise. The story is generally the same. A college football expert decides he can conquer the NFL. An NBA totals guy decides he can beat hockey. A college hoops savant decides he knows how to play poker. A poker player decides he knows how to bet sports. And on and on and on. There are gambling savants, but they aren’t trying to win some Olympic all-around medal. They’re specialists. Nothing will discombobulate and defeat disciplined specialists faster than those specialists deciding that they aren’t specialists.
That full quiver of arrows stuff is, in my opinion, a bit of a crock. Stuffing a quiver never helps your accuracy.
When I first started gambling Vegas Style I read everything I could get my hands on about playing each game.
All of those books basically said you would lose because of the casino edge.
All they could really teach was how to lose less via advantage play.
I thought why bother to play at all.
Then I came across pure genius in one book.
He talked about money management.
A truly successful gambler that makes a living through gambling does so by managing the bankroll.
That management philosophy was simple.
Keep a cash bankroll for gambling sessions and nothing else.
Set a loss limit for each gaming session, once reached, walk away from that session.
But if you still wanted to play, seek out a different session, again having a loss limit.
Set a win limit for each gaming session, once reached, you can either walk away or continue to play but never lose below your win limit so if you continue to play, but start to lose at least walk away keeping your win.
Win sessions repay the losses in your bankroll while the amount over the repay goes wherever you want it to.
Sounds simple, doesn’t it, but it’s not, it takes an enormous bit discipline, but it works very well in any type of economy.
“Then I came across pure genius in one book.”
Sounds like you’re promoting a Rob Singer book.
Any money management technique that does not consider whether or not you are the favorite over the house will not work. Mathematically it’s impossible to build a winning system by only playing negative games — no matter what starting and stopping rules you apply.
The winning process begins with being a mathematical favorite.
When the recession hit in 2008, I thought that the LV casinos would offer really good promotions to get people in the door. I was very wrong. The casinos tightened up the promos and mailers.
Just keep in mind this is diff than anything before. I cautioned you on Covid in early 2020 and was laughed about it. We are still dealing with it.
Global water control will cause water and of course food shortages. They are already seen in Europe Africa and others. The west is dry. This effects farming right?? Fertilizer up 300%. Gas?? No end. We are not talking of recession here. Have you noticed Lake Mead is dry. What happens when water runs out. We have worse Pres in hx Congress same. You are are wondering About gambling money lol. You all wanted the great reset !!! You got it. Be carefull what you ask for. We have 50bil for Eukraine but no baby formula an attempted assis on SCJ Murders are out on bail. This is what country wants. You have only seen the beginning.
A short non-segui-tour about your water situation as it presents:
I saw the picture of Lake Mead with its current water level situation. It’s scary. What astonishes me the most is that the water control police or whatever you call it over there fines people using their sprinklers too long or at times when it’s not allowed. Completely disregarding that 125’000 hotels rooms per day with those hundreds if not thousands of restaurants, fast food chains etc using up millions of gallons of water every day. Just walk into any Starbucks shop and check out what’s going there. You will see the “barista” keeping the water tab open and running forever while there’s something in the sink that needs to be washed. How crazy is that????
Speaking of a water drought that has lasted for 20+ years now, you must be living in a dream world if you believe that all over sudden Vegas will get rainy seasons in the future. It’s desert, period. It’s impossible that a place in a desert is a place where millions of citizens can live in airconditioning homes and with endless water coming of the water pipe. See reality as it is.
The only solution would be to get desalination plants somewhere in california but even that’s a tricky thing because it takes high energy factories to burn out the salination from the water and somebody has to pay for it. You can’t make drinking water out of sand.
From Switzerland
Boris
Recession doesn’t worry me. Got all my money invested in Swiss cow bells.
Sangria, that’s a great investment. Swiss cow bells are famous and top quality. They’re a bit heavy though if you opt to take one home 🙂
Boris, you are right. Some of the Swiss cow bells I saw on cows during a tour in Switzerland were as big as basketballs. I’m glad I’m not a cow dragging one around although cows spend most of their time bent over eating grass anyway.
From Arizona
Sangria
Sangria, where I live there are many herds of cows on the meadows, eating grass all the time. I noticed that many don’t have a bell around their neck. some do. No so sure about the concept of this tradition. Maybe the “boss cows” wear them and on the alps the farmers need in order to know where the cows are currently garthering around and eating , especially at nights. Besides all that, cows can become very heavy, up to 400 kilogramms (750lbs), so they are probably so strong that they don’t even feel the weight of such a noise making thing around their neck. Still I somewhat feel it unfair because of the noise the bells are making and the cows have no chance to dodge it.
From Switzerland
Boris
Bob’s advice to have some cash on hand is a great idea. Especially after what happened all over Canada yesterday on 9 July 2022 with debit cards, credit cards, and the communications grid being rendered offline for whatever reason, it was confirmed. In times like that a person needs cash and not in the bank where you cannot access it when the power gets shut off.
What America is going thru now is much worse than the recession of ’08 – ’09 by leaps and bounds. This economy is on full tilt! People should consider stacking gold & silver coins, “real money,” in addition with having a cash reserve. The thing to really pay attention to is if the war in Europe will expand with the USA and NATO getting into direct combat against the Russian Federation. JP Morgan put out an article recently saying that in a worst case scenario the price of oil could jump to $380 per barrel. Possibly if Western European nations (NATO) were to get totally cut off from Russian oil and gas. As well as the war expanding. In such a case a gallon of gas could be $15-$20? I don’t think people will come out to splurge in Las Vegas if they had to pay that much for gas. It would destroy the economy and things would descend into absolute chaos out in the streets of America. It would be dangerous just leaving the grocery store with a basket full of groceries. America isn’t headed for a deep recession, we’re heading for the greatest depression the likes of which this country has never seen! Our leaders will ensure that it happens.
Wow. Lots of gloom and doom here. who knows. I think people’s morality is going out the window, and that will be the downfall of the US. Headed to vegas shortly. For what it is worth, last 2-3 months, my offers have gotten much better. I’ve lost a little too much, but I’m getting offers from casinos I haven’t visited since before covid. That tells me that they may be hurting. Plan on seeing first hand how bad Lake Mead is in person. But with casinos everywhere, Vegas has a lot of competition, and from what I’ve seen from many others, with resort fees through the moon, and food prices up, many don’t want to go there anymore, when something much closer will suffice.