In a December 26 post on gamblingwithanedge.com, someone named Sandy asked the (slightly abbreviated) following:
Apparently, EV is only positive in VP when you factor in comps. But comps and maybe other rewards that aren’t strictly “comps” as APs define it, are voluntary payments by casinos. You can’t complain to the Gaming Commission or Control Board that you’ve been cheated on comps if casinos reduce or eliminate yours. That being the case, why do casinos cooperate in turning the house edge to a player edge by giving comps?
Today I’m going to respond to part of this. My posts are read by both players and casino employees and if I explain everything it creates a roadmap for casinos to change things in a way I don’t want them changed.
With that said, I think grouping all comps together yields misleading results. Let me break them down, somewhat arbitrarily, further.
Comps, short for complimentaries, to me, consist of non-monetary gifts casinos give to players as a way to induce players to play. These include such things as either free or highly discounted hotel rooms, meals, spa treatments, show tickets, shorter lines, VIP lounges, etc. These are nice, but if this is all I received for playing 9/6 Jacks or Better (99.54%), I would find the game unplayable.
Even though I’m calling these non-monetary gifts, some of them may be sold. Although I haven’t sold rooms for more than a decade, there were times long ago I did so. I’ve occasionally bartered certain benefits — e.g. free show tickets to my barber in exchange for a certain number of haircuts.
These comps are worth different amounts to different people. Room comps in Las Vegas aren’t so valuable to me because I live there. But for out-of-towners, they are worth more. Free alcohol is worth more to heavy drinkers than to teetotalers.
There are also monetary, or almost monetary, gifts given to players for the purpose of inducing the player to play: These include cash back, free play, monthly mailers, loss rebates, and other things. The distinction between items in this category and those in the comp category aren’t always clear cut. For example, airline ticket reimbursement could conceivably be included in either.
There is also a third category of casino gifts to the player called promotions. Some of these are monetary (e.g. point multipliers) and some are more in the comp category (e.g. half-price margaritas on Tuesday.) There are casino gifts ranging from “casino crap” (e.g. a logo cap) to a free or highly discounted cruise.
There can be earn-up promotions where you have to play x amount of points to get the gifts. Or maybe get one for free and play more to get additional ones or perhaps a bigger one. There are dozens of types of drawings and tournaments — all with the aim of getting the players to play more.
There are no limits to the types of promotions that can be offered. If a marketing director can think up some new way to induce players to come in, he/she can make a promotion out of it. Some of these promotions are well-thought-out and work well for the casino’s bottom line. Other promotions not so much. Not all marketing directors have the skills to predict how a promotion is going to appear to their strongest players.
There are promotions that are essentially costless to the casino but valuable to the players — such as earning six times drawing entries on Thursdays. If you estimate that drawing entries are worth a tenth of a percent, this promotion adds a half of a percent to the player without costing the casino anything. That could conceivably turn an unplayable game into a playable one.
In every casino, several of these items are going on at once with players playing a wide variety of games at various skill levels. Just limiting the discussion to video poker for now, you have 94% games, 95% games, 96% games, . . ., and maybe 99%+ games at some places. There isn’t a lot of difference to the casino, perhaps, between a 99% played poorly and a 97% game played expertly. They both contribute similar amounts to the casino’s bottom line.
Casinos can be very profitable if most players lose and a few players win. If a casino wants to make it so that winning is impossible, then most players will play elsewhere. Even then there will be short-term winners. Players will still hit royal flushes on 95% games.
A significant part of the skill of good players is in figuring out which promotions are worth pursuing. Additionally, good players learn where they can “stack them up,” meaning play on multiple point days for a tournament and multiple drawings at once, while maintaining enough play to keep their monthly mailers coming while not winning so much the casino takes actions against them. Figuring out how much the point multiplier added to their bottom line is easy. How much the drawings add is tougher. How much do you need to play to get a good mailer? These are not trivial problems.
Some promotions work better for low rollers. Some work better for high rollers. The best decision for you may well not be the best decision for me. Correctly figuring out where you can get the most benefit is part of the game.
Part of the premise of the original question is that casinos can easily evaluate how good a player is. That’s easier said than done. If a player is ahead after six months, can you say how much was skill and how much was luck?
How much should winning tournaments and drawings count towards whether the player is a net-winner or not? Different casinos answer that question differently. The casino has already budgeted $xxx for the drawing and within certain limits doesn’t much care which player wins it (so long as the same players don’t win most of the time.)
Running a casino well is as difficult as playing well. It’s always going to be a cat-and-mouse game to some degree. The smartest players learn to survive in this game. The smartest casino managers do too. In many casinos there is room for both.
Sandy is partially correct and partially wrong when she says that you can’t take it to the Gaming Control Board if casinos cut back on your comps. If a casino decides to “no mail” you, you’re stuck. If they take away already earned free play, you probably do have redress. If a casino offers things in a drawing and then reneges, sometimes the GCB will take it up. It’s a bit complicated about what casinos can and can’t do to you, but it is nowhere near “they can do anything they want.”
Are there things I’m not sharing with you here? Absolutely! But even so, I think I’m providing a framework with which to look at the situation.
Never miss another post
Another thing you didn’t mention in answering the “why would the casinos do this” question is that the cost of a comp to the casino is often far less than its value to the player. You get a free buffet that would have cost you $15, and maybe the actual cost to the casino is $8. Or you get a hotel room that would otherwise have been empty, and the actual cost to the casino is the $4 they pay the maid–even though the retail cost is $79 or whatever.
Also, free play costs the casino far less than its face value. Ostensibly, it should be worth 90-99% of its face value, and therefore cost the casino that much, but the sad reality is that most players bleed it all back. A casino manager at Stations once told me that they recovered 95% of all free play sent out to locals via mailers. Now I don’t know how he arrived at that figure, and that begs the question of why locals’ casinos have slashed bounceback on mailers, but the concept is still worth thinking about. Also, there are “invisible” benefits to the casino in offering free play. Maybe the wife gets $25 free play and brings along her husband–who is an avid craps player or an enthusiastic and lousy blackjack player. Maybe they decide to eat at the casino’s steakhouse–and they wouldn’t have made the trip to the casino to eat without the incentive of the free play.
And that brings up the concept of just how much a comp or free play is worth to YOU. A comp is only worth what you would actually have paid for the goody you get at full retail. A $40 comp to a restaurant is worth somewhat less than that if you probably wouldn’t have gone to that restaurant and spent $40 of your own money. Likewise, a room comp is only worth what you would have paid for that room, all other things being equal.
Even free play has an opportunity cost. Got $50 in free play? Great, but if you spend an hour driving across town to pick it up, what’s that hour of your time worth? What about gas and wear and tear on your car? What about the money you could have made spending that hour doing something else?
Bottom line, comps are worth less to you, and cost the casinos less, than their face values would suggest.
I seriously doubt that we would have redress if casinos take away already earned free play, because free play is something they choose to give to us, not something they have to give to us. Free play would be a “revocable benefit”, meaning it was voluntarily offered by the casinos (not required by contract or law) and the casinos can elect to retract or discontinue the benefit any time they want to. Case in point: Around a decade ago, when the Plaza and the Las Vegas Club were sister properties under one owner, they had great video poker games and great perks. I had amassed over $200 worth of comps, when a new corporation bought the properties and, now as the new owner, simply cancelled all the benefits in my account and in who-knows-how-many other customer accounts. When I called (from home in California) and asked to speak to a manager about this horrendous action, I was transferred to their lawyers, who treated me like an enemy instead of a valued customer, not caring one whit about the inappropriateness of the comps cancellation, only caring about what the law said, and they said the law was on their side. Sure, you can write to the Gaming Control Board about anything (just don’t expect proactive action in your favor), but most people need to forget about suing any casino, not only because the state government and the courts are partial, in favor of the casinos, but also because any suit must be adjudicated in Nevada, meaning you would have to travel to Nevada (and pay for a hotel room, etc.) to attend all court sessions. (If you work, that means you would have to lose salary or waste vacation days.) My advice is to not let comps build up, but rather use most of them during your current or your next stay, to avoid losing them.
But would a casino want to attract all those fleas (fleeze) at cost, or even project the image they are underselling their amenities.
Agree on lack of redress on free play. When Horseshoe Cincinnati first opened and they were giving away the store in massive bounce back offers, they were quick to bring the axe down on anyone who redeemed too many offers and didn’t play to their expectations. Didn’t matter if you had a mailed offer. Collect too many juicy $1,000 offers with not enough play and the remaining ones were suddenly voided.
They also had a banking feature, where you could download the offers for use later. I once helped a relative download his offers and his bank was up to $5,000 within a couple of weeks. By the time he was able to get to the casino to play off his bank, they PIN locked his account and he lost the free play. It’s part of the game. May seem like a lot to lose, but when you are getting over 4% theo on boxes with 9/6 Jacks or 5 for 2 Video BJ, you can’t complain too much. Apply that approach to numerous cards for friends and family and you have a cash cow that was due to be slaughtered sooner of later. Loosing $5K in the course of a year when you rake in over $150K was part of the cost of doing business.
SB
NEVER rely on comps to turn a game positive! That’s why these types of people have “other” activities to earn income.
These types of people?
Are you counting free play, drawings, mailers, and other promotions “comps?” And you believe you should NEVER count them to make a game positive? I believe you should ALWAYS count those things.
in Vegas, if you wish to play very small stakes you can have the advantage without those things. If you wish to average $100,000 a year or more from casinos, you MUST include those things. And I do. And I also have income from other sources.
Bob’s form of high risk, high rolling, big balling gambling is unique, I think even he has figured only a handful of people are doing it. Most successful gamblers are low rollers: quarter deuces, table games, sports, certain penny slots. Mickey Crimm has written about low rolling gambling in Montana. These forms of gambling have low to no paper tracking so they don’t mess with your taxes and government programs you might be getting and you’re usually well under the casino radar. If you can consistently win a hundred per day, that’s over $30K per year, and the casinos don’t care. On the other hand, hit a “taxable” (that’s anything $1200 or more), and you’ll probably get heat. Doesn’t make a lot of sense but no reason to fight the system, it is what it is. If you can play quarter FPDW at 3000 hands per hour or so (see wizard of odds) you can easily be in the six figures. The risk can be low, if you use the Kelly system on quarter FPDW you just need $3K or so of rolling bankroll capital, some of the better penny slots really require no bankroll at all, well, maybe $20. A lot of times that $5 or so freeplay they give to everyone is enough to get going.
I’m just trying to figure out what bronze offers and promotion means