{"id":5333,"date":"2017-02-28T06:30:40","date_gmt":"2017-02-28T14:30:40","guid":{"rendered":"http:\/\/www.gamblingwithanedge.com\/?p=5333"},"modified":"2017-02-28T06:32:49","modified_gmt":"2017-02-28T14:32:49","slug":"lower-cut-card-casino-also-makes-2","status":"publish","type":"post","link":"https:\/\/www.lasvegasadvisor.com\/gambling-with-an-edge\/lower-cut-card-casino-also-makes-2\/","title":{"rendered":"The Lower the Cut Card the More the CASINO Also Makes"},"content":{"rendered":"

I would be willing to bet a good portion of my bankroll that the majority of Advantage Players\u2019 got their start by playing Blackjack, specifically using a card counting strategy that moves the wager up and down with the count.\u00a0 Somewhere in the first year of training, the counter concludes that the deeper the penetration (where the cut card is placed), the better game is for the player.\u00a0 But what is often overlooked, especially by table game managers and gaming executives, is that the lower the cut card is placed, the more profitable the game is for the casinos.\u00a0 I know this seems counter<\/em> intuitive, no pun intend; but I promise things will come into focus, by the end of the article.<\/p>\n

The foundation of my assertion is that a dealer who isn\u2019t dealing is not making any money for the casino<\/em>.\u00a0 When you factor hourly wages, sick days and personal days, as well as benefits and vacation time I conclude that for every hour a single dealer is not dealing it cost a casino $22.\u00a0 This is a standard net loss.\u00a0 An even more staggering number is the opportunity cost associated with a stagnant dealer.<\/p>\n

Opportunity cost in laymen\u2019s terms is how many dollars one course of action is costs over another.\u00a0 For example, every year we hear about the high cost of raising a child to the age of 18. A recent article put the cost at just over $233,000. What is not clear is that the majority of the cost is associated with the opportunity cost of raising the child.\u00a0 More to the point, raising the child is one path and working is another.\u00a0 By choosing to raise a child or children over working, the parent loses the income that they would have otherwise earned by working.<\/p>\n

Similarly, different casinos vary in their placement of the cut card in a blackjack shoe game.\u00a0 Some cut 2 decks and some cut only a single deck in a six deck shoe game.\u00a0 Consider two games where the difference between the cut cards placement is 1 deck, e.g<\/strong>. in deck A the cut card is placed 2 decks from the bottom and in deck B the cut card is placed 1 deck from the bottom.\u00a0\u00a0 In order to derive the net gain for the casino for each additional round dealt, some reasonable assumptions have to be made.\u00a0 Those assumptions are defined in the following list, and have been verified by gaming experts such as Michael Shackelford, creator of the Wizard of Odds website.<\/p>\n

    \n
  1. Average # of cards per hand of Blackjack is 2.3<\/li>\n
  2. Average number of players per table is 4<\/li>\n
  3. Players average bet $40 ( some bet more some bet minimum of $25)<\/li>\n
  4. 84 rounds of blackjack are dealt per hour<\/li>\n
  5. Average of 7 active tables per casino<\/li>\n
  6. Average Player plays to a -1.3% expectation against the house<\/li>\n
  7. Only 1 in 47,000 players can accurately count cards in a casino<\/li>\n
  8. Only 10% of the 1 in 47,000 players have a sufficient bankroll and time to play full time.<\/li>\n<\/ol>\n

    *I am ignoring lower denominations because I don\u2019t consider the $5 tables that pay 6:5 on naturals and have automatic shufflers to be Blackjack.<\/em><\/p>\n

    \u00a0<\/em>52 cards make up the deck difference between cut card placements.\u00a0 Dividing 52 by the 2.3 cards the result is approximately 22.6 additional hands being played (equation 1)<\/em>. Dividing by 4 players per table, it results in 5.65 more rounds being played in the shoe with the lower cut card (equation 2).<\/em><\/p>\n

     <\/p>\n

    THE MATH<\/strong><\/p>\n

    equation 1<\/i><\/strong> –\u00a052 cards \/ 2.3 cards per round = 22.6 additional hands<\/p>\n

    equation 2<\/i><\/strong> – 22.6 hands \/ 4 people = 5.65 additional rounds dealt<\/p>\n

    Using these assertions we can derive the additional hold a casino can expect by additional rounds played.\u00a0<\/em><\/p>\n

    To determine the additional action we apply the average wager:<\/em><\/p>\n

    5.65 rounds * 4 people * $40 = 904 dollars<\/em><\/strong><\/p>\n

    Applying the average hold<\/em>:<\/em><\/p>\n

    904 * 0.013 =$11.75 per shoe<\/em><\/strong><\/p>\n

    Multiplying by 7 tables:<\/em><\/p>\n

    $11.75 * 7 = $82.26 dollars per shoe<\/em><\/strong><\/p>\n

    Multiply by 26 shoes per day:<\/em><\/p>\n

    $82.26 * 26 = $2,138.86<\/em><\/strong><\/p>\n

    Multiply by 365 days a year:<\/em><\/p>\n

    $2,138.86 * 365 = $780,685<\/em><\/strong><\/p>\n

    Divide by 5.65 to determine how much each additional round makes:<\/em><\/p>\n

    $780,685\/5.65 =$138,174.50<\/em><\/strong><\/p>\n

    The opportunity cost for a higher cut card as opposed to a lower one is approximately $138,000.00 per round.\u00a0 The time per round on a 4 player table is 1.4 minutes, and using a shuffle time of 5-7 minutes (using the high side of 7 minutes makes the math work out clean so I will use that).<\/p>\n

    1.4 minute hands\/7 minutes = 5 hands<\/em><\/strong><\/p>\n

    Every time a casino shuffles they are losing money and when done consistently over the course of a year they lose $780,685 per shuffle.\u00a0 So it stands to reason that the casinos would want to play more and, shuffle less.\u00a0\u00a0 But if we know anything for certain it is that most land based casino\u2019s hire management personal that couldn\u2019t think their way out of paper bag.<\/p>\n

    This derivation is a stripped down analysis.\u00a0 Things get more complicated when you consider the number rounds played and exact time it takes to shuffle for 6 and 8 deck shoes.\u00a0 Also, the average bet sizes on lower denomination games restructure the hold for the games; the 6:5 win on a natural blackjack also plays a part in the exact calculation for the hold in these more complex scenarios. The lower denomination games, even with the 6:5 payout still brings in less money on a direct player to player comparison.\u00a0 The last thing is to consider is how much additional money would be taken out of a casino with a lower cut card counters. I think it is fair to say that most high threat players have moved into advantage play techniques that are Beyond Counting<\/u>, <\/em>pun intended, so this impact would likely be minimal.<\/p>\n

    Casinos are seeing drastic drop offs in their player rates.\u00a0 The 80\/20 rule; this is where 80% of companies revenue comes from 20% of their customers, is shifting to an 80\/15 rule and in some jurisdictions the shift has migrated to where 80% of the casinos gaming revenue comes from only 10% of their players.<\/p>\n

    The casino doesn\u2019t make any money when a dealer doesn\u2019t deal.\u00a0I\u00a0can’t be the only person ever to run through this derivation.\u00a0With this calculation\u00a0in place why do some casinos choose to cut 2 and sometimes 2.5 decks?, especially when\u00a0it leads to a dealer shuffling more and dealing less.\u00a0 We have shown how much a shuffle costs a casino in actual dollars, but still nothing changes.\u00a0 Why? In its simplest form and, in its most convenient definition the answer is a casino will not purposely do anything that will lead to a player winning<\/em>.\u00a0 I think this is paradoxical, because just being in the gaming industry will result in some <\/em>players winning.\u00a0 The key is that vast majority of players will ultimately give up money to the house; A concept that most casino executives have yet to grasp.<\/p>\n

    Nicholas G. Colon is the managing director of <\/em>Alea Consulting Group<\/em>, a casino gaming consulting firm with a player centric philosophy.<\/em><\/p>\n

     <\/p>\n

     <\/p>\n\"Facebook\"<\/a>\"twitter\"<\/a>\"youtube\"<\/a>\"instagram\"<\/a>","protected":false},"excerpt":{"rendered":"

    I would be willing to bet a good portion of my bankroll that the majority of Advantage Players\u2019 got their start by playing Blackjack, specifically using a card counting strategy that moves the wager up and down with the count.\u00a0 Somewhere in the first year of training, the counter concludes that the deeper the penetration […]<\/p>\n","protected":false},"author":10,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"spay_email":"","jetpack_publicize_message":"","jetpack_is_tweetstorm":false},"categories":[2],"tags":[],"yoast_head":"\nThe Lower the Cut Card the More the CASINO Also Makes - Gambling With An Edge<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.lasvegasadvisor.com\/gambling-with-an-edge\/lower-cut-card-casino-also-makes-2\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The Lower the Cut Card the More the CASINO Also Makes - 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