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An Ace Tracker’s Lament

By Darryl Purpose

(From Blackjack Forum Volume XVII #3, Fall 1997)
© Blackjack Forum 1997

[Note from Arnold Snyder: Since the writing of this article, Darryl Purpose has been elected to the Blackjack Hall of Fame. He is also a successful folk singer and songwriter. To check out his latest musical release, see DarrylPurpose.com.]

I’m playing some blackjack around St. Louis. Scouting and playing small stakes, trying to dig out this 50k bank that is now 10k. They have some special gambling law in Missouri designed to protect the players – you can only buy in $500 on any one “cruise.” Before I learned to be careful about that I had to walk away from a +20 shoe for lack of chips. Arghh.

At one point the dealer was a tad sloppy and exposed the card on top of the pack just before the cut. Clear as day, it was a big ol’ ACE. Also clear as day was a big ol’ Queen of Diamonds on the bottom of the pack.

There was one other player on the table and she cut the cards about 1 ¾ decks from the top. I’m thinking – if that Queen of Diamonds comes out as the last card of a round, this could be real interesting…

Tracking the Ace: Strategy

It’s a quarter game, and my strategy to this point, on a quarter game, has been to leave the table at any negative, but when this one goes negative, I stay. The woman sitting in the #2 spot is large, taking up a little of the #1 & #3 spots as well. This doesn’t leave much room for me to squeeze into first base, so I wait to grab the spot, because, after all, it’s a long shot that I’ll need it.

I’m hoping this woman leaves the table because that would increase the chances of the Queen of Diamonds falling as the last card of the round. Sure enough, my prayers are answered. She taps out, gets up… then with a grunt and a mumble reaches between her sizeable breasts and pulls out two sweaty hundred dollar bills, and the game continues. As we get to the middle of the deck, she says, “Mind if I play two hands?” That would certainly reduce the chances of the Queen falling on the last card!

I conjure up a sincere confidence and say emphatically, as if I know that this would bring us all kinds of bad luck, “Play one.”

The deck is down to about the two-deck level. I bet $50. I figure, that Queen might come out in the hit cards leaving me with the option of doing something really interesting and really profitable, like… doubling on a hard 20?! Maybe not, but certainly an A,9.

The possibilities are swimming through my head. I don’t bet too big because I only have $250 in chips and the chance to buy only $500 more, and if that Queen of Diamonds comes out as the last card of the round, I’d like to have some money to bet the ACE!

The dealer has a 6 up, 5 in the hole, hits it with a little card and Boom, the QUEEN OF DIAMONDS! Exactly what I was looking for! Exactly the place in the deck expected!

But…I didn’t really plan this whole thing out… I’ve got to get over to first base!!! I’ve got to buy some more chips!!! I’ve got to figure out how much to bet!!!

I say to the dealer, “Hold it up!” Then, turning to the other player, I say, “Mind if I play first base on this one?!” I speak confidently, just a little like a crazy person, a superstitious person, like a person who doesn’t care what the world thinks, but has a notion that this or that will bring him luck and is hell-bent on carrying that out. (Like your average casino-goer, maybe?)

I give the dealer $200 and announce, “I’m going to play first base!”

As I move over I’m quite relieved to see that the large woman isn’t miffed. She thinks it’s kind of amusing. I think she even feels a little sorry for me. The whole thing must seem a tad pathetic at this point.

How much to bet?! I’m thinking—save enough to double down. Bet half of what I have available (about $350). But as the dealer is changing my $200, I realize that the advantage from doubling (8%??) is nothing compared to the 50+% that I have for getting the ace, besides, since I’m getting the ace, it’s only soft doubles that we’re missing anyway.

Right?!

1/3 Kelly would call for a $3,000+ bet.

Right?

I bet everything.

It’s a big stack ’cause it’s got lots of $1 and 50 cent chips in it.

The floorman comes over and asks, “Is this a bet?!”

I haven’t bet over $100 in this place to this point… I figure the whole scene is already over the top, so I say with conviction, “Yes! I’m going to get a blackjack!! Give me my blackjack!”

I’m thinking hard about the appropriate reaction on my part when I do get my blackjack. I hadn’t really figured it out when the first card was dealt… the ace… but what’s this?!… it’s not the ace… It’s the FIVE of CLUBS!

A Bad Time for a Sad Lesson in Ace Location Technique

In that crack in time between worlds when everything is in slow motion, you have all the time in the world to understand.

I fully understand that I’ve got 7% of the bankroll out there, I can’t double down, and I’ve got the FIVE of CLUBS! The next card falls…

QUEEN of DIAMONDS to the player next to me!… and even before the next card comes out I understand even more… I’ve got 7% of the bankroll on the table and I’ve got the Five of Clubs and the dealer has the big ol’ ACE…

Of course, y’all being professional and all, you know that it doesn’t really matter how the hand turned out… ♠

Why Skillful Satellite Play Cuts Your Bankroll Requirements More Than You Think

by Arnold Snyder and Math Boy

(From Blackjack Forum , Vol. XXVI #1, Winter 2007)
© Blackjack Forum Online 2007

This article will look primarily at how you should estimate the dollar value of a poker tournament satellite. It will look at the factors that make a satellite a good investment, and will discuss how skill at satellites can lower the bankroll you need to enter bigger, more costly poker tournaments, or lower your risk of ruin (RoR) for any given bankroll. We’re going to focus on specific satellite strategies in a later article. In this article, we’ll look at the dollar value of satellites to a player who already has the strategic skills necessary to beat satellites.

First, a definition: A satellite is a tournament that does not award money to the winner(s), but instead awards an entry to a tournament that has a bigger buy-in cost. In some satellites, a small amount of money is awarded in addition to a seat or seats into a bigger event, but this money is a secondary prize, awarded either to cover the winners’ travel expenses or to “round out” the prize pool.

It is the seat in the bigger tournament that is the main prize. There are some satellite pros who play satellites primarily for money, not seats into a bigger event. Many satellites, especially for big multi-tournament events, award tournament chips rather than seats in specific events, and these chips can be sold to other players who are buying into the big events. Our primary focus in this article, however, will be on players who want to use satellites to lower their entry costs into main events.

A single table satellite will usually start with ten players, and will typically award one winner a seat in a tournament that has a buy-in of about ten times the cost of the satellite. Some single-table satellites award seats to the top two finishers. A “super satellite” is a multi-table satellite that will award multiple seats into a major tournament, with the exact number dependent on the number of entrants in the satellite.

The “House Edge” on Poker Tournament Satellites

The first thing we need to consider when analyzing a satellite’s value is the house edge. By this, I mean the percentage of the total cost of the satellite that the players are paying to the house for hosting the satellite. Figuring out the house commission is pretty straightforward. We need only two factors: the total combined dollar cost to all of the entrants, and the total dollar value of the satellite prize pool.

For example, a popular World Poker Tour (WPT) single-table satellite has a buy-in of $125. One of the ten entrants will win two $500 tournament chips plus $120 in cash. The other nine entrants receive nothing. For big multi-event tournaments like the WPT or the World Series of Poker (WSOP), it is not uncommon for the hosting casino to run satellites that award tournament chips that may be used in bigger events, instead of seats into a specific event.

Although the series of tournaments may conclude with a “main event,” usually the event with the highest buy-in, there will be many events with smaller buy-ins that precede the main event. A player who wins two $500 tournament chips may use those chips to enter two $500 events, a single $1000 event, or as partial payment into an event that has a buy-in greater than $1000.

In this particular WPT satellite example, the house collects $125 x 10 = $1250, while paying out $500 + $500 (two chips) + $120 (cash) = $1120. So, the house profits $1250 – $1120 = $130 every time they run this satellite. The house edge from the players’ perspective is: $130 / $1250 = 10.40%. Which is to say, the house keeps 10.4% of all the money they collect from the satellite entrants.

At the 2006 Mirage Poker Showdown, a WPT series of tournaments with a $10K main event, there were seven different single-table satellite formats. All were ten-player/one-winner formats. The least expensive had a $60 buy-in, with the winner receiving a single $500 chip plus $50 cash. The most expensive had a $1060 buy-in, with the winner receiving twenty $500 chips (a total of $10K in chips) plus $340 in cash. The chart below shows the buy-ins of these seven satellites with their payouts, the house commission (in $), and the house edge (in %).

Mirage Poker Showdown (WPT) Single Table Satellites, one winner format
Buy-in	Payout in Chips	Payout in Cash	Total Payout	House Commission $	House%
60	500	50	550	50	8.33%
125	1000	120	1120	130	10.40%
175	1500	120	1620	130	7.43%
225	2000	120	2120	130	5.78%
275	2500	120	2620	130	4.73%
810	7500	340	7840	260	3.21%
1060	10000	340	10340	260	2.45%

One obvious trend is that, in general, the greater the buy-in cost, the lower the house edge. The only exception among this group of satellites is that the house edge on the least expensive ($60 buy-in) satellite is smaller than the house edge on the second cheapest ($125 buy-in) satellite.

Poker Tournament Satellite Value for the “Average” Player

As a satellite player, what does the house edge mean to you? Consider your result in these satellites if you play with an “average” level of skill that gives you neither an advantage nor a disadvantage against the field. Some may be better players than you, and some worse, but in the long run, you will average one satellite win for every ten satellites you play.

This chart shows the value (in $ and %) of each of these seven WPT satellites for an “average” player:

Player Wins One Out of Ten Satellites Entered
Buy-in	Dollar Value	Player Adv. in %
60	-5.00	-8.33%
125	-13.00	-10.40%
175	-13.00	-7.43%
225	-13.00	-5.78%
275	-13.00	-4.73%
810	-26.00	-3.21%
1060	-26.00	-2.45%

Let’s first note that in all cases, the dollar value is negative. “Average” players will lose money in satellites over the long run. Computing the dollar value is simple. Consider the $60 satellite. If you play ten of these satellites, you will invest $60 x 10 = $600 in these ten plays. If you win one, you get paid $500 (chip) + $50 (cash) = $550 in dollar value. Collecting $550 for every $600 you invest is a loss of $50 for every ten satellites you play, which is an average loss of $5 per satellite. So, the dollar value of this satellite to the average player is -$5.00.

Likewise, the “Player Advantage in %” is negative for the average player in the other satellites, as we would expect. Again, the computation is simple. If I lose $5 for every $60 I invest, then my result (in percent) is: -5 / 60 = -0.0833, which is -8.33%. You might also note that if you look at the prior chart which shows the “house edge” on these satellites, the “player advantage” for an “average” player is always the negative of the house edge.

From the professional players’ perspective, this means that to play satellites with average skill is a waste of money. In the long run, it will cost the average player more to enter tournaments via satellite than it would cost him to simply buy-in to the big events directly.

A player who is short on funds might argue that he would never pay $10K to enter a major tournament, but that he is willing to gamble $1060 on a long shot to get into such an event. In fact, this is a good argument if you accept the fact that you are gambling on a negative expectation game. One of the reasons that tournaments have become so valuable to professional players is that so many amateurs are willing to gamble at a disadvantage on satellite entries.

Satellite Value for the “Better-than-Average” Player

Now let’s look at how satellite skill affects the value of satellites to the player. Let’s say you can win one out of every nine of these ten-player satellites that you enter. How would this affect both the dollar value and your advantage (in %) in these same seven WPT satellites?

Player Wins One Out of Nine Satellites Entered
Buy-in	Dollar Value	Player Adv. in %
60	1.11	1.85%
125	-0.56	-0.44%
175	5.00	2.86%
225	10.56	4.69%
275	16.11	5.86%
810	61.11	7.54%
1060	88.89	8.39%

Big difference. The cheapest satellites are still not worth the trouble, due to the high house edge. Few players at this modest level of satellite skill should be interested in entering the $60 satellite, as the $1.11 value is a pretty low payout for a lot of work. And the $125 satellite (which you may recall has a higher house edge) is still a negative expectation gamble. The player who can win one in nine of these has a notably superior result to the “average” player who can win only one in ten, as the more skillful player will be losing only 56 cents per satellite played, as opposed to losing $13. Still, in the long run, the player who expects to win just one in nine of the $125 satellites would be paying less to enter the bigger tournaments if he skipped the satellites and just paid the full buy-in price of the event.

With the $1060 satellite, the one-in-nine player advantage is 8.39%, which is a dollar value of $88.89. For many players, this modest level of satellite skill might make these satellites worth the effort.

The Satellite Professionals

As your satellite skill increases, the value of playing satellites goes up dramatically. A more talented satellite pro can do quite well in ten-player/one-winner satellites if he can win just one of every eight satellites he enters. Here’s how he would do in these seven WPT satellites with this level of skill:

Player Wins One Out of Eight Satellites Entered
Buy-in	Dollar Value	Player Adv. in %
60	8.75	14.58%
125	15.00	12.00%
175	27.50	15.71%
225	40.00	17.78%
275	52.50	19.09%
810	170.00	20.99%
1060	232.50	21.93%

At this skill level, there may be sufficient dollar value to warrant playing these satellites at any buy-in level. With the smaller buy-in satellites, you must decide if the expected dollar return is sufficient to spend, on average, about an hour of your time in satellite play. Many of us wouldn’t work for $8.75 an hour, which is the dollar value of the $60 satellite for the one-win-in-eight player.

But we must also consider that for every satellite we play, we gain more satellite experience, and this should translate sooner or later to greater satellite skill. Like all other forms of poker, you can’t increase your satellite skills without playing them. And this becomes more important as the dollar value increases with the satellite cost. For example, with a dollar value of $232.50, the $1060 satellite will gain you entry into a $10K event, on average, for a cost of just over $8K. That’s a substantial discount.

The Top-of-the-Line Poker Tournament Satellite Pros

The top satellite pros win, on average, about one out of every six to seven ten-player/one-winner satellites they enter. They accomplish this with a combination of skill at fast-play strategies, skill at short-handed play, and skill at choosing weak fields of competitors. No pro wants to enter a satellite and find himself facing a table full of other pros. The value of satellites to a pro is as much a function of his competitors’ lack of skill as it is of his own skill.

Let’s compare the dollar values of these seven WPT single-table satellites for players who expect to win one of every ten, nine, eight, seven, six, and five satellites they play:

Dollar Value per Satellite, if Player Wins Once per:
Buy-in	10	9	8	7	6	5
60	-5.00	1.11	8.75	18.57	31.67	50.00
125	-13.00	-0.56	15.00	35.00	61.67	99.00
175	-13.00	5.00	27.50	56.43	95.00	149.00
225	-13.00	10.56	40.00	77.86	128.33	199.00
275	-13.00	16.11	52.50	99.29	161.67	249.00
810	-26.00	61.11	170.00	310.00	496.67	758.00
1060	-26.00	88.89	232.50	417.14	663.33	1008.00

Let’s also look at the various players’ advantages in percent for these frequencies of wins:

Player Advantage (%), if Player Wins Once per:
Buy-in	10	9	8	7	6	5
60	-8.33%	1.85%	14.58%	30.95%	52.78%	83.33%
125	-10.40%	-0.44%	12.00%	28.00%	49.33%	79.20%
175	-7.43%	2.86%	15.71%	32.24%	54.29%	85.14%
225	-5.78%	4.69%	17.78%	34.60%	57.04%	88.44%
275	-4.73%	5.86%	19.09%	36.10%	58.79%	90.55%
810	-3.21%	7.54%	20.99%	38.27%	61.32%	93.58%
1060	-2.45%	8.39%	21.93%	39.35%	62.58%	95.09%

The final column in both charts, which shows the player’s expectation if he is skillful enough to win one out of every five of the satellites he plays, is more theoretical than realistic. This may be possible for a skillful satellite player who always manages to face a very weak field, but most satellite players today are not this weak. Many players are aware of the necessity of taking risks in satellites as the field diminishes and the blinds increase.

Nevertheless, we can see from the charts that a satellite player who is skillful enough to win one out of every six or seven of these satellites will have an advantage in the neighborhood of 30% to 60%, and that is a big enough edge to interest any professional gambler.

Other Poker Tournament Satellite Formats

As mentioned at the beginning of this article, not all satellites are single-player one-winner formats. The two-winner format is also quite common. Typically, a player might pay $200 plus the house fee to win one of two seats into a $1K event. With this format, the average player would expect to win two out of every ten satellites entered, as opposed to one in ten. Likewise, a win of two in eight with the two-winner format would be equivalent to winning one in eight with the single-winner format. And the top satellite pros would expect to win two out of every six or seven played in the two-winner format.

The two-winner format is generally advantageous for both the players and the poker room. Satellites played down to two winners finish faster than satellites played down to one winner. This means that more satellites can be played prior to a big event, with twice as many main event entries generated per satellite. The two-winner format also reduces fluctuations for the players.

If you’re good with spreadsheets, you can easily set up a spreadsheet to calculate the dollar return and house/player advantages for the two-winner format based on the buy-in costs and payouts.

Multi-table satellites, often called super-satellites or mega-satellites, are also very common, especially for major events. For example, the WSOP typically has a $1060 super-satellite for the $10K main event. One seat to the main event is awarded for every ten satellite entries. Here’s a chart that shows the dollar values and player advantages based on the frequency of player wins:

WSOP Mega Satellite, $1060 Buy-in, One Seat Awarded per Ten Entrants Dollar Value and Player Adv. If Player Wins Once per:
	10	9	8	7	6	5
$ Value	-60.00	51.11	190.00	368.57	606.67	940.00
Adv. (%)	-5.66%	4.82%	17.92%	34.77%	57.23%	88.68%

Note that the house edge on this event is 5.66%. These multi-table satellites are a good value for a player on a budget who can only afford to enter one satellite for a shot at the main event. And this is especially true if the player is a good tournament player, but not really all that skilled at single-table satellite play. (And there are many players who are skilled at multi-table tournaments who do not fare well in single-table satellites, primarily because of a lack of experience with making the quick adjustments necessary for the speed and short-handed play.)

For a skillful single-table satellite player, however, super satellites have less value than single-table satellites. The higher-priced single-table satellites often have a lower house edge, and they play out much faster. Big multi-table satellites often take many hours to determine the winners, as opposed to the typical 60-90 minutes a single-table satellite lasts. Time is money.

Using Satellites to Lower the Buy-In Costs of Major Poker Tournaments

Let’s say you’ve been playing a lot of small buy-in tournaments and your tournament skills have increased to the point where you want to start playing bigger events where you can make more money. You don’t feel ready for the major $5K and $10K events that the top pros dominate, so you want to start playing in $1K events as a stepping stone to the majors.

Let’s also assume that you’ve been beating the small buy-in tournaments at a rate of well over 200%, and you believe you would have an advantage of at least 100% in these bigger $1K events. You’ve been building your bankroll with these small buy-in tournaments, and your plan is to start using the money you’ve won to advance. The main question you have: Is your bankroll really big enough to withstand the greater fluctuations you’ll encounter in these $1k events?

If you do not have a sufficient bankroll to enter $1K events at this time, that does not necessarily mean that you must resign yourself to smaller buy-in tournaments. In fact, if you are a skillful satellite player, you can start entering $1K tournaments via satellites with a smaller bankroll. As the charts above show, satellites can very effectively lower the buy-in costs of bigger events. And a lower buy-in cost means a smaller bankroll is required. But how much smaller?

Before we can figure out how much satellite skill can lower your bankroll requirements, however, let’s quickly review what your bankroll requirements would be for a given type of tournament if you pay the full buy-in cost.

Let’s say you would like to play a hundred $1K tournaments in the next year. If you live in Las Vegas, this is easily accomplished, as Bellagio has two $1K buy-in tournaments every week. $1K events are also popular preliminary events for WSOP Circuit series, WPT events, and many other special tournament series that poker rooms run throughout the year. In order to estimate the bankroll requirements for entering a hundred $1K events, assuming a player has a 100% advantage on the field, let’s use a real-world example.

At the recent WSOP Circuit Events that were hosted by Harrah’s Rincon in San Diego, the $1k event on February 13, 2007, had a total of 89 players who paid $1060 for a seat. Nine spots were paid. This was the payout structure:

Place	Payout
1st	$31,079
2nd	$17,266
3rd	$9,496
4th	$6,906
5th	$6,043
6th	$5,180
7th	$4,317
8th	$3,453
9th	$2,590

Now, we have something to work with. Obviously, every $1K tournament you enter will not have this payout structure, but for our purposes, we’re going to assume that you want to know the bankroll requirements for entering a hundred of these specific tournaments. Since we already said that you estimate that you have a 100% advantage in these events, we next have to make some assumptions as to how that 100% advantage will be realized.

When we say that you have a 100% advantage, we mean that for every $1K you pay to get into these tournaments, you will cash out $2K. That cash out will pay you back your $1K buy-in and provide a $1K profit, which is a 100% advantage. From looking at the payout schedule, we can see that there is no payout of exactly $2,120 (twice the buy-in/entry) for any finishing position. Even 9th place pays $2,590, which is a 144% profit. In order to realize a 100% advantage, we will accomplish this by having many finishes with no return, but a number of finishes that return greatly in excess of 100%. (And note that many tournament pros enjoy advantages in excess of 200% and even 300%. We are using this 100% example for a player who is just moving up to $1K events from smaller events, and who is still sharpening his skills.)

Assuming you play a hundred of these tournaments, let’s create a win record that would provide an advantage in the neighborhood of 100% overall. To do this, I’ll assume that you finish in the money 16 times, or about once every 6 to 7 tournaments. Here’s a set of finishes that includes 3 first places, 3 second places, 3 third places, 2 fourths, 2 fifths, 1 sixth, 1 seventh, 1 eighth, and 84 finishes out of the money, and would earn you 100.35% on your total investment:

Finish	Payout	# Cashes	Total
1st	$31,079	3	$93,237
2nd	$17,266	3	$51,798
3rd	$9,496	3	$28,488
4th	$6,906	2	$13,812
5th	$6,043	2	$12,086
6th	$5,180	1	$5,180
7th	$4,317	1	$4,317
8th	$3,453	1	$3,453
9th	$2,590	0	$0
10-89h	$0	84	$0
Total Cashed: $212,371
Total Invested: $106,000
Total Win: $106,371
Win %: 100.35%

That’s close enough to 100% for our purposes. Obviously, no player could estimate that these will be his exact finishes in 100 tournaments. We’re just creating a set of finishes that would return approximately 100% profit to the player. There are many other ways that a 100% advantage could be realized. There could be fewer than 16 money finishes, but more with the higher payouts, or there could be more than 16 money finishes, but fewer with the big payouts and more low-end finishes. The above set of payouts is just one way that a player with a 100% advantage might realize this profit.

In fact, despite the assumed 100% advantage, over the course of these 100 tournaments, a player in real life would be highly unlikely to show a result this close to an actual 100% profit. His real-world result in a series of 100 consecutive tournaments would be subject to what statisticians call standard deviation. He may have an exceptionally good run of tournaments, or an exceptionally bad run, just due to normal fluctuations in the cards and the situations he encounters.

In the Appendix to The Poker Tournament Formula, pages 328-340, there is a discussion of what standard deviation is, what it means to a gambler, and how you figure it out for poker tournaments. I’m not going to reproduce that discussion here, so if you do not understand the concept of standard deviation, and especially how it applies to poker tournaments, read that chapter the book. Also, different payout schedules caused by different field sizes will have a major effect on standard deviation, so don’t assume that the discussion about this specific $1K tournament would apply to all $1K tournaments. This tournament is just an example from real life.

Using the method described in The Poker Tournament Formula, and applying it to the player with the 100% advantage in the $1060 tournaments described above, we find that although our expectation is to win (profit, after subtracting our buy-in/entry fees) a total of $106,371 over the course of 100 tournaments, one standard deviation on that result is $62,853. So, if we finish two standard deviations below our actual expectation (and 2 SDs = $125,706), we could actually finish these 100 tournaments with a loss of $19K, despite our 100% advantage!

This may sound impossible, but keep in mind that we only expect to win $106K and that $93K of our total return comes from just three first place finishes. A few bad beats and cold decks at crucial times at the final table, or before we get to the final table, can wreak havoc with our overall results.

Since we could conceivably suffer a net loss of $19K over the course of these 100 tournaments, and still be within the realm of what a statistician would consider a “normal” fluctuation, we might conclude that a bankroll of $20K would be sufficient to finance our play, though we could conceivably lose it all. In fact, a bankroll of $20K would usually be more than sufficient to finance this level of play, assuming we are correct about our 100% edge. The standard deviation on our expected results does give us a pretty good idea of the kinds of fluctuations that are possible due to bad luck in tournaments of this level over this period of time.

Technically, your $20K bankroll would probably be very safe if you cut back on the cost of the tournaments you entered if you started experiencing significant negative results. In other words, if you finish out of the money in the first ten tournaments you enter—and this is entirely possible—then you really would be wise to start entering $500 tournaments until you hit a few wins (or just one good win) to build your bankroll back up. Fluctuations of greater than two standard deviations happen all the time.

(Cutting back on the size of your bets after bankroll reductions is a method of “Kelly Betting,” another term that would be known to any serious blackjack player, but few poker players. I’ll discuss Kelly betting approaches for tournament players in more detail later in this article.)

If you are familiar with the statistical concept of standard deviation as discussed in The Poker Tournament Formula, you are probably aware of the fact that a statistician expects a fluctuation of greater than two standard deviations 5% of the time. Which is to say that if 20 players were playing these tournaments with a 100% advantage, 19 of them would expect to finish 100 tournaments within two standard deviations of their expectation, but one of them would expect to experience a fluctuation of greater than two standard deviations from his expectation.

A fluctuation of 3 standard deviations is extremely rare, as results this far from expectation have only about a 1/300 chance of occurrence, so it’s not really necessary to maintain a bankroll to withstand this much of a fluctuation. But to be safe, just based on the standard deviation, I’d advise a bankroll closer to $30K for these $1K events, assuming you have a 100% advantage.

But What About Different Levels of Aggression in Poker Tournaments?

Let’s consider the fact that we’ve created our hypothetical 100% advantage in this tournament by devising a specific set of in-the-money finishes that would result in this win rate. In the real world, there are many different ways a player could end up with a 100% advantage. He could be a very aggressive player who had fewer cashes but more top-end finishes, or he could be a more conservative player who had a greater number of cashes, but more low-end finishes. Might not the bankroll requirements for these player types differ from each other?

Let’s analyze and compare the requirements for these different player types.

The More Aggressive Hypothetical Tournament Player

To provide this player with a 100% advantage, let’s say he finishes in the money only 10 times in 100 tournaments (instead of 16 times as in our prior example), but with more high-end finishes. Here’s the aggressive player’s chart:

Finish	Payout	# Cashes	Total
1st	$31,079	4	$124,316
2nd	$17,266	4	$69,064
3rd	$9,496	2	$18,992
4th	$6,906	0	$0
5th	$6,043	0	$0
6th	$5,180	0	$0
7th	$4,317	0	$0
8th	$3,453	0	$0
9th	$2,590	0	$0
10-89h	$0	90	$0
Total Cashed: $212,372
Total Invested: $106,000
Total Win: $106,372
Win %: 100.35%

Conveniently, this very different set of cashes provides this aggressive player with the same 100.35% win rate as the player in our first example.

The More Conservative Hypothetical Tournament Player

For further comparison, let’s also create a sample player who has more final table finishes (25, instead of 16 or 10), with more low-end finishes, but still, with a 100% win rate. Here’s this more conservative player’s chart:

Finish	Payout	# Cashes	Total
1st	$31,079	2	$62,158
2nd	$17,266	2	$34,532
3rd	$9,496	3	$28,488
4th	$6,906	3	$20,718
5th	$6,043	3	$18,129
6th	$5,180	3	$15,540
7th	$4,317	4	$17,268
8th	$3,453	3	$10,359
9th	$2,590	2	$5,180
10-89h	$0	75	$0
Total Cashed: $212,372
Total Invested: $106,000
Total Win: $106,372
Win %: 100.35%

In order to compare the bankroll requirements of these three different player types, who all have the same overall win rate in the same tournament, let’s use a different statistical method of analysis, the Gambler’s Ruin Formula, or, as gamblers today more often call it, Risk of Ruin (or RoR).

First, here’s an explanation of what we’re trying to figure out here. A player wants to play tournaments that have a specified buy-in/entry cost, say, $1060. He knows from the above discussion on standard deviation that he could conceivably lose his bankroll due to negative fluctuations, even if he has a 100% overall advantage. The player wants to minimize his risk, so he wants to know how much of a bankroll he’d need to insure himself of a 90% chance of success, or 95% chance of success, or even 99% chance of success. Also, if the player could maintain his 100% win rate while using either a more aggressive or more conservative strategy, how would this affect his chance of success?

The Risk of Ruin Formula that was used to analyze the three sample players described above was first published by Math Boy and Dunbar in the Fall 1999 issue of Blackjack Forum. The article is titled, “Risk of Ruin for Video Poker and Other Skewed Up Games”. You may follow this link to get to the article in our online library, so we’re not going to print the Risk of Ruin formula here.

Let’s just look at the RoR data on our three player types. Remember, the conservative player makes it to the final table 25 times in 100 tournaments, but wins the fewest top-end prizes. The middle-of-the-road player has 16 money finishes out of 100 tournaments, with more at the top-end. The aggressive player has only 10 money finishes, but takes four firsts, four seconds, and two third-place payouts. These are their bankroll requirements for various levels of risk:

RoR	Conservative Bankroll	Middle-of-Road Bankroll	Aggressive Bankroll
1%	37,213	45,449	55,853
5%	24,208	29,565	36,333
10%	18,607	22,724	27,926

We want to emphasize here that the “conservative” and “aggressive” styles we’ve created are for purposes of analysis—they are not meant to be realistic. With regards to the aggressive player, it’s unlikely that a player who was skillful enough to always make the top three when he finished in the money (with 80% of those finishes in the top two) would never finish in any other final table position. Even the most aggressive and skillful players will suffer bad beats and cold decks and hit lower payouts occasionally.

It’s really more likely that such a player would have a range of money finishes at all levels, even if he had more than his share of the top prizes. The problem we faced in creating this player, however, was that we were attempting to maintain that 100% win rate for purposes of risk of ruin comparison, and if we start scattering a more realistic set of smaller wins among his finishes, his win rate will climb dramatically (as it tends to do in real life with the best aggressive players).

The conservative player’s results were similarly skewed. It is highly unlikely that a player with so few top-end finishes would be able to hit the money often enough to have a 100% win rate. But the purpose of the example is simply to show that playing style does have an effect on a player’s bankroll requirement, all other things being equal. If we look at the middle-of-the road player’s bankroll requirement for a 5% RoR (95% chance of success), we see he needs a bankroll in the neighborhood of $30,000. The conservative player might get away with a bankroll of about $5000 less than this, but the aggressive player might need $5000 more.

These numbers may surprise many tournament players who have not read The Poker Tournament Formula, as there is widespread ignorance among poker players with regards to bankroll requirements. On one of the WPT shows, for example, a sidebar feature showed professional poker players being asked for advice on bankroll requirements for tournament players, and wound up providing the specific recommendation that tournament players should have a bankroll of ten times their buy-in cost. Don’t we wish…. In fact, that was potentially disastrous advice for serious poker tournament players.

One other thing we must note here is that this sample tournament we’re analyzing had a prize pool based on a total of 89 players. In fact, if you are entering $1K tournaments with 300 players, or 2000+ players as in some of the 2006 WSOP $1K events, the top prizes will be much bigger, and so will your fluctuations and bankroll requirements. We don’t want you to think that a $30K bankroll is sufficient for all $1K tournaments. Again, we ’ll refer you to the detailed discussion in The Poker Tournament Formula on how field size affects bankroll requirements.

Now let’s look at how we can use satellites to lower this bankroll requirement.

Lower Buy-In Costs Mean Lower Poker Tournament Bankroll Requirements

Since we’re discussing a specific $1K WSOP Circuit Event, let’s look at one of the actual satellites that was being offered at Harrah’s Rincon that allowed a player to win entry into this event. They ran ten-player satellites that cost $240, and the satellites paid two winners. Each winner received two $500 chips and $100 cash. So, if you were one of the two satellite winners, you’d have been able to cover your $1060 buy-in/entry to the $1K tournament, and still have $40 cash to put in your pocket.

Here’s a chart that shows this satellite’s dollar value and player advantage, based on a player’s expectation of winning twice out of every 10, 9, 8, 7, 6, and 5 satellites entered:

WSOP Circuit Satellite, $240 Buy-in, Two Winners Each Get $1000 (chips) plus $100 cash Dollar Value and Player Advantage If Player Wins Twice per:
	10	9	8	7	6	5
$ Value	-$20.00	$4.44	$35.00	$74.29	$126.67	$200.00
Adv. (%)	-8.33%	1.85%	14.58%	30.95%	52.78%	83.33%

Now, let’s say the same three hypothetical tournament players (conservative, middle-of-the-road, and aggressive), all with the same 100% advantage in the $1K events, are also skillful satellite players, and they each decide that they will always enter these $1K events through satellites. And, let’s assume their levels of satellite skill provide all of them with an expectation of winning twice for every seven (or, essentially, one for every 3.5) two-winner satellites they enter. How does this affect the actual cost to them of entering the $1K events? Here’s the math:

3.5 of these satellites will cost $240 x 3.5 = $840. For that $840 expense, the player gets $1K in chips plus $100 in cash. Since the buy-in/entry for the $1K event is $1060, the player can buy-in to the $1K tourney and pocket the extra $40 cash, leaving him with a total buy-in/entry cost of $800 even, a discount of $260 from the full tournament price.

This lowered cost per tournament drastically reduces the risk of ruin for each player. You might guess off the top of your head that paying $800 per tournament on average, as opposed to $1060, might cut your bankroll requirements proportionately. Since 800 / 1060 = 75.5%, you might be tempted to take the 1% RoR bankroll requirement of $45,449 for the middle of the road player, and multiply it by 75.5%, for a bankroll requirement of $34,300.

But, in fact, the effect of the satellite discount entry is quite a bit stronger than that. What you must also consider is that although you are entering these $1060 tournaments for only $800, the prize pool does not change. This means that the same win record will increase your percent advantage from 100% to 165%. This increased percent advantage will lower the bankroll requirement for a 1% risk of ruin for the middle of the road player from $45K to $30K.

(Unfortunately, figuring out the RoR for entering these tournaments through satellites is not quite as simple as just using $800 as the entry fee. The situation is similar to a parlay bet at a sports book. The satellite has its own flux, and that must be included with the flux on the main tournament in order to correctly calculate overall flux and risk of ruin.)

Let’s look at the RoR bankroll requirements assuming these three players always enter these $1060 tournaments through these $240 two-winner satellites, with each winning two out of every seven of the satellites:

RoR	Conservative Bankroll	Middle-of-Road Bankroll	Aggressive Bankroll
1%	19,358	30,380	42,905
5%	12,592	19,762	27,910
10%	9,679	15,190	21,452

What Risk of Ruin Should a Poker Tournament Player Consider Safe?

Many players might say off the top of their heads that they’d be comfortable with a 90% chance of tournament success. But bear in mind that ruin means ruin. If you have a $30K bankroll, and you find yourself in that unlucky 10% of players who would expect to lose it all if playing at this risk level, then you are flat broke. So, if this $30K represents your life savings, that would be a foolhardy way to play. If it represents money that is easily replaceable (say by cashing in a few CDs when they mature), then it may not be a bad gamble.

Most professional gamblers prefer to use a “Kelly betting” system. Those of you who have read any of my blackjack books know what this is. If you are not familiar with the term, it essentially means that you always bet proportionately to your bankroll in order ensure that you never go broke.

For example, if a player was playing these $1K tournaments with a 5% RoR, he could do so with a $30K bankroll. If this same player decided in advance that he would enter tournaments with smaller buy-ins than $1K if he lost a significant portion of his bankroll (until he built it back up), then his actual RoR would be quite a bit lower than 5%. This is why, in The Poker Tournament Formula, I advise: “…Should your bankroll go into a nosedive, be willing to start entering tournaments with either smaller buy-ins or smaller fields of players, until you rebuild your bank.”

In an ideal world, a player would create a chart of optimal entry fees to pay, based on his current bankroll, that would virtually eliminate any Risk of Ruin. For example, If he lost 40% of his starting bank, he would play in $600 events. If he lost 50% of his bankroll, he would play in $500 events. With a 75% loss, he would play in $250 events, etc. Unfortunately, in the real world, is that in the real world we can’t always find tournaments priced to our needs. If I lose 10% of my bankroll, can I find a $900 tournament?

For any poker tournament player on a limited bankroll, however, it makes sense to follow such a plan as closely as possible. If your bankroll drops by 10% from the amount sufficient for $1k tournaments, you have to decide if you are willing to accept the increased risk of ruin inherent in continuing to play $1k events, or if you had better drop to $500 events, if that is all that’s available below the $1k buy-in level.

Also, be honest with yourself about the actual size of your tournament bankroll. Your playing bankroll should not include your rent money, car payments, living expenses, credit card or installment loan payments, or the like.

Poker Tournament Satellite Frequently Asked Questions

Q: If I’ve already played a few satellites without winning, should I still buy-in to the main event if there are no more satellites?

A: If you have the bankroll to enter the main event at full price, and you have the skill to make money in these types of events, then by all means, buy-in for the full price. If the reason you are playing satellites is to cut your costs because you can’t afford to play the bigger events, then do not buy-in for the full price. Just keep developing your satellite skills and play only in the big events when you win your seat through a satellite.

Q: If I’m just an amateur but I really want to get into a WPT main event just to play with the pros and take my shot at fame and fortune, but that $10K buy-in is a bit steep for my wallet, should I set a limit to the number of satellites I’ll play in an attempt to enter the event?

A: If you are not a skillful satellite player and you are simply attempting to enter a major event cheaply on a long shot gamble, then you should definitely decide beforehand exactly how much you’re willing to spend on satellites, and quit if you hit your limit.

Q: If I’m skillful at both satellites and regular tournaments, should I limit the number of satellites I’ll play for any one event?

A: For a skillful player, it’s a different situation. First of all, if you fully intend to enter the main event regardless of your satellite result, then there is the practical consideration of time. If an event starts at 2pm, and satellites start at 8am, it may not be in your best interest to play satellites for six hours prior to starting day one of a tournament that might go 12-14 more hours.

Some pros always play a satellite or two before major events, even when they can afford the full buy-in price, because the satellites are a good value and can be used to lower their overall tournament expenses. If a pro can win one out of seven $1K satellites in order to enter $10K tournaments, and if he plays just one satellite before each major event, then six times he’ll be paying $11K for his seat, and once he’ll pay just $1K. If he plays 21 of these $10K tournaments per year, his three satellite wins will lower his overall tournament cost (and raise his overall profit) by $9K.

If time constraints and guarding against fatigue aren’t part of the equation, and you have an edge at satellite play, there is no reason to limit the number of satellites you’ll play to enter any one event. During big multi-event tournaments like the WSOP, there are satellite pros who virtually camp in the satellite area, playing one satellite after another, day after day.

On some days, they may play ten satellites without a single win, then they’ll win three or four the next day. They use the tournament chips they win to buy-in to the events they want to play, and sell the rest to players for full value. Obviously, these pros pay no attention whatsoever to limiting the number of satellites they’ll play for any one event. Nor should they. They’re in it for the long run, and if they have the skill to beat the satellite fields and the house edge, they’ll come out way ahead in the long run.

Conclusion

If you are serious about playing in major tournaments with big buy-ins, there is a huge value to developing satellite skills. At the 2006 WSOP, I overheard one player commenting to another that he was surprised at how many of the big name pros were entering satellites, since they could so easily afford the full buy-ins. If you look at the value of satellites as shown in the charts provided in this article, you can see why many pros are attracted to satellites.

If you play a lot of major events, and a lot of satellites to enter these events, you can substantially lower your overall annual tournament costs while increasing your percentage return. I don’t care how much money you have. If you’re paying $10,000 for an event that you could get into for $8,000 (or less), you may be a great poker player, but you’re not that great at financial planning.

Notes and Acknowledgments

Much of the material in this article will be unfamiliar to poker players who have not read The Poker Tournament Formula, because bankroll requirements are estimated using statistical methods that are not taught in your everyday high school math courses. Professional gamblers really need to understand this math, or they will condemn themselves to many years of going broke repeatedly, no matter how skillful they are. As I put it in The Poker Tournament Formula (Chap. 28, “How Much Money Do You Need?”):

It’s the rare blackjack book these days that doesn’t provide at least some information on such topics as standard deviation, the Gambler’s Ruin formula, risk-averse betting strategies, the Kelly criterion, and various related topics, in addition to simplified charts of data that card counters can use to estimate their bankroll requirements.

Most poker books, by contrast, stick to strategic advice exclusively. Blackjack players learn early how to manage their bankrolls; poker players learn early how to hit up their friends when they go broke.

Thankfully, some five months after I published those lines in The Poker Tournament Formula, another poker book has been published that does deal seriously and intelligently, and in much greater depth for cash game players, with the topic of bankroll requirements. This book is The Mathematics of Poker , by Bill Chen and Jerrod Ankenman. This book is to poker what Peter Griffin’s The Theory of Blackjack is to that game.

Unfortunately, like Griffin’s book, much of the material in the Chen/Ankenman book is not readily accessible to a player who has not taken some college level courses in probability and statistics. I still urge any serious poker player to get this book, just as I have always recommended Griffin’s book to all serious blackjack players. The Chen book is essentially a book for math heads, but there’s a lot of discussion on a wide range of topics I haven’t seen elsewhere for serious players. He even delves into risk of ruin when you don’t know your advantage.

Risk of ruin is a statistical measure that blackjack players would be familiar with, but that has been long absent from the poker literature. There is an excellent explanation of RoR in Dr. Allan Wilson’s classic text, The Casino Gambler’s Guide (1965). But neither Wilson’s description of risk of ruin, nor any of the descriptions that have been published in many blackjack texts since then, allow for the formula’s use in a game where there are multiple possible payouts, ranging from a loss of the bet (buy-in), to a modest win (low-end finish) to a very large payout compared to the size of the initial bet.

The first published discussion of RoR that I know of for games with multiple payout possibilities was an article by Russian mathematician Evgeny Sorokin that appeared in the March 1999 issue of Dan Paymar’s Video Poker Times newsletter. In response to Sorokin’s article, professional gamblers Math Boy and Dunbar developed an Excel spreadsheet method of applying Sorokin’s generalized risk equation to virtually any game with a skewed payout structure, and I published their method in the Fall 1999 issue of Blackjack Forum, in their article, “Risk of Ruin for Video Poker and Other Skewed Up Games”. Now, Math Boy has helped me to adjust his method for analysis of poker tournaments (or any other gambling tournaments).

I am especially indebted to Math Boy for creating an Excel spreadsheet for me that would not only estimate a tournament’s standard deviation and risk of ruin, but would automatically recalculate these values based on entering the tournament via satellite, at any satellite cost, and with any selected percentage of satellite wins. The spreadsheet is not currently user-friendly for anyone who is not familiar with some of Excel’s advanced statistical functions, but Math Boy is working on a simpler version, similar to his Patience Factor Calculator, that he plans to make available to players at this Web site in the near future.

Incidentally, a number of players have asked me where I came up with the standard deviation formula that appears in The Poker Tournament Formula as they had never seen a method for calculating standard deviation for a game with a tournament payout structure. My method was simply to modify a formula originally created by Doug Reul, which first appeared as the “Volatility Index” in one of Dan Paymar’s 1996 issues of Video Poker Times, and can currently be found in his book, Video Poker: Precision Play.  ♠

FREQUENTLY ASKED QUESTIONS

by Arnold Snyder
© 2005 Arnold Snyder

Q: Is it legal?

A: Online gambling and poker are legal in most countries. In the U.S., the current administration is very hostile to online gambling and poker. However, though the Congress recently passed a law that may make transferring funds to and from online casinos and poker rooms less convenient, it did not pass a law that makes playing in online casinos and poker rooms illegal in the U.S.

According to gambling attorney I. Nelson Rose, the 1961 Federal Wire Act made betting over the telephone wires on races and sporting events illegal in the U.S., but federal courts have repeatedly ruled that the 1961 Wire Act applies only to sports and race betting, not online casino or poker play. The new law does nothing to change that.

Some online casinos and poker rooms have decided to stop accepting U.S. players for now, while they work out other deposit and withdrawal arrangements. A number of others have contacted us to tell us that, after a thorough review of the new law, they have decided to continue accepting U.S. players, and have already worked out new deposit and withdrawal methods.

See our Recommended Deposit Methods and Offshore Banking Options for more information. Deposit methods accepted at various online casinos and poker rooms are included in the casino listings on our Top Rated Online Casinos and Bonuses page and our Online Poker Bonuses and Deposit Methods page.

We will report on further developments.

U.S. players should also check their local state law before playing online. There’s a lot of legal debate on whether state law applies to online gambling and poker, since the actual betting occurs outside of the state. We don’t really know the answer to that, since no player has ever been charged. For players’ information, the states that have passed anti-online-gambling laws are: Illinois, Michigan, Wisconsin, Washington, Indiana, Nevada, Oregon, Louisiana, New Jersey, New York and South Dakota.

Free games are available at every casino and poker room we list for any players restricted by law from playing with real money.

Q: How much money do I need to do this?

A: Anyone with $500 that he or she can afford to gamble with can afford to get into this venture. $1000 would be better, for a quicker start, but $500 you can afford to risk is sufficient. Most of the deposits you’ll make will be smaller than this, usually $50 to $200. You need the extra funds because you may wish to have money on deposit at more than one Web casino simultaneously. It sometimes takes days (and even weeks) to withdraw your funds from a Web casino. Ideally, it would be best to have $5,000 to $6,000 in order to take advantage of some of the more lucrative bonus offers that allow larger deposits and pay bigger bonuses. But you can build up your bank as you play and take advantage of these bigger bonuses when you have the funds.

For more information on bet sizing and bankroll management for Internet casino bonus play, see Blackjack Betting and Risk for the Basic Strategy Player in the Blackjack Forum Gambling Library.

Q: Do I need to know any special strategies for the games?

A: Absolutely, but the strategies are not that difficult. One nice feature about gambling on the Internet is that you can have your strategy right out on your desk as you play. For blackjack, you simply need to know basic strategy.

Q: How much time is required for this?

A: That’s another nice feature about Internet gambling. The Web casinos are all open 24/7, and you can play sessions of any length you desire, whether a few minutes or a few hours. The actual amount of time it will take you to earn your bonuses will depend on various factors that I can’t analyze precisely for all players. If you have a dial-up modem, the games will be slower than if you have a DSL connection. If you already know the basic strategy for a game, you will play faster than someone who must consult a chart to make decisions. Some casinos’ software is fast, and some software is slow. How much you are betting per hand to meet your WR is also a factor. Depending on all of these factors, you may spend from 30 minutes to many hours playing for each bonus you collect.

Q: How much will my hourly win rate be?

A: Your rate of profit will depend on all of the time factors described above. You will also be spending time on the clerical chores of reading the bonus offers and T & C, figuring out the bonus values, copying the necessary information, and bookkeeping.

Q: If I have $1,000 exactly to try this out, what is the chance that I would lose my whole $1,000 just due to bad luck?

A: I would put the chance of this at slim to none providing you are careful about choosing reputable casinos and bonus offers (lists of reputable Internet casinos are provided through the links at the left), you play the accurate basic strategy for the games you enter, and you follow the advice on this page and on the Traditional vs. Sticky Bonuses page for sizing your bets according to your bankroll and the type of bonus you are playing.

With a small bankroll, you must play more conservatively—which will lower your hourly win rate—in order to protect yourself from simple bad runs of cards (which occur in all casino games). You should never deposit all of your bankroll in one casino. If your bankroll is small, you should be making many small deposits and withdrawals at numerous Web casinos over time.

Players do lose money on individual bonus plays even when the bonus provides them with a significant advantage over the house. If you use an extremely conservative betting strategy—say making all bets of $1 to $2—then I would have to say that your chance of losing all your money would be close to zero if you avoid playing in rogue Web casinos with cheating software. With such small bets, assuming you are playing for the most generous bonuses, you would be extremely unlikely not to show a decent profit for your dollar investment. The bonuses really are that advantageous. But you must decide how much risk you want to assume by playing at a higher level, and what your time is worth to you if you play at a lower level.

I advise any person considering this venture to not play with money that is dear to her or him. You do not gamble with the rent money. If you have only $500 or $1,000 that you can afford to gamble with, then I would suggest starting out very conservatively. Go ahead and play with $2 bets for your first few bonuses. Just take the hours it takes to do this and keep your peace of mind while you’re learning and building confidence. When your bankroll gets up to $1500 or $2000, and you can see the process is working for you, then get a bit more aggressive. Make bets of $4 or $5. Always play at your own comfort level.

For conservative players on small bankrolls, there are certain types of bonuses (called “sticky” bonuses) that will have little value to them until their bankrolls have grown to at least $1500 or $2000. This is because the sticky bonuses must be played more aggressively in order to extract their value, and aggressive play is always more risky. Wait to play these after your bankroll has grown a bit. The traditional (non-sticky) bonuses, and “pseudo-sticky” bonuses, however, will still have value for you, and need not drain your funds with bad fluctuations. For specific advice on bankroll requirements for sticky bonuses, see the Traditional vs. Sticky bonuses link at the left. ♠

Don’t Be a Mark for Marked Cards

by Steve Forte

(From Blackjack Forum Vol. XIV #1, December 1994)
© 1994 Blackjack Forum

[Note from Arnold Snyder: This article is useful not only as an introduction to cheating methods involving marked cards, but also to some of the highest-edge legal advantage plays available to professional gamblers. The legal plays involve cards marked through natural wear and tear or in the normal design and printing process.]

Marked Cards in a Casino or Cardroom Near You

In September a player named David Whitehill uncovered a marked cards cheating scam in one of the California Indian Reservation casinos. The blackjack games at the casino in question are played in a format where the bank passes from player to player. The casino generates revenue from a mandatory ante paid for each hand played.

In another recent incident, a professional poker player found marked cards in use in a major Las Vegas casino poker room.

A number of players have expressed concern that casino and poker room cheating of this nature may be widespread, and that casinos and poker rooms are either too incompetent or too corrupt to stop it. They fear that the lack of regulatory oversight may make the blackjack or poker games in some venues too dangerous to play.

Here is a different perspective that I hope will provide some insight on the controversy while offering possible solutions to the problem.

As a general rule, marked card cheating scams in casino poker rooms or on face-up blackjack shoe games start with a loophole in the casino’s card control. Inadequate card control is not a California Indian gaming problem but a problem with casinos and cardrooms worldwide.

For example, New Jersey is considered to have exceptionally tight card control which continues even after the cards are used. All decks are sealed in bags and picked up by the Division of Gaming Enforcement. Marked cards, however, have surfaced in every New Jersey Casino.

In the last month marked cards have been discovered in two major Las Vegas casinos and one in Reno. A closer look at the card controls suggest that the cheating scams may have been going on for some time. Virtually every cardroom, including those in and out of California, has had to deal with this cheating scam at one time or another. I have also seen systems of card control used on California Indian reservations that parallel those used in a more “regulated environment,” and even some that provide more accountability.

Marked Cards: How It’s Done

Stanford Wong, in his newsletter, reported that the cards were “professionally marked, probably with a laser.” Having had the opportunity to analyze these marked cards, I doubt seriously that the cards were marked with a laser, and I hesitate to call them “professionally marked.”

The work is very common and is known as two-way line shade. “Shade” is made with, primarily, pure grain alcohol and a minute amount of the most permanent, fade-proof ink or dye available, preferably aniline. Shade is almost colorless but provides enough of a tint to slightly shade the card, and is most commonly used to gray the white areas of the card. Shade can be applied by hand (brush) or mechanically with the help of an air brush and templates to accurately position the marks.

If a “line” of circles, diamonds, squares or any part of the card’s back design is shaded, the eye sees the marks as a darker line. Cheaters prefer the shoe game when playing shade because the top card is a consistent, stationary target (unlike single & double decks), and the action of dealing the top card creates a contrast with the next card to be dealt. Both factors are important as the eye tries to discern a light shade or tint that is virtually colorless. Reading line shade from different angles facilitates the “read” and sharpens the line, bringing the shaded areas together. The following illustration should help.

Cheaters refer to marked card scams as playing paper. These scams historically have been the most difficult to detect, and this is especially true when shade is down. In more than one casino scam, frustrated bosses have sent the suspected cards to the FBI laboratories for examination. Only after spectrum analysis could the marks be seen. The work usually turns out to be shade.

There is little or no quality information on the art and science of marked cards. There is also no easy way to discuss the subject intelligently without writing a book. Let me just say that I have seen marking systems that were infinitely more sophisticated than the marking system discovered by David Whitehill.

Everything from IR phosphors that were “read” with lasers, optic systems that utilized a combination of both contacts and glasses, daubs that oxidized after a period of time and shade that required hundreds of hours of practice training the muscle of the eye to see the marks, and I’m just touching the surface. Quite frankly, if the cards were “professionally marked,” we would all still be looking for the work.

After the cards are marked they must get to the game. This can be accomplished in many ways but most include the collusion of a casino employee — a boss, security guard or janitor. In rare cases cards have been stolen during the delivery process and even from the manufacture.

If the cards have to be resealed, this is no problem. Top hustlers can get in and out of a factory wrapped card case in just minutes, without ever breaking the seal. Some controls even allow the decks to be opened prior to transporting them to the blackjack game.

Given the sophistication of today’s cheaters, it probably seems difficult, if not impossible to protect yourself. This is not the case, and the irony of this controversy is that professional players are almost always better equipped than those working in the industry when it comes to evaluating suspicious play.

What to Watch For

The biggest mistake most professional gamblers make is that when a player plays a hand incorrectly versus basic strategy or a card counting strategy, the player gets chalked up as just another “sucker” donating his time and money. You should always take a strange play one step further and correlate these deviations with the dealer’s hole card and/or top card, especially when the money hits the layout. A consistent correlation with information not yet available spells trouble!

There are numerous tests you can use to help detect a marked deck. Black lights, certain filters, angled light, and the “riffle” test, to name a few, can all be helpful at times. There are even tests that might help detect the marks during play (provided the work is on strong), such as looking to the right or left of the shoe, throwing your eyes out of focus, and reading from a distance — all designed to stop the eye from focusing.

But there is no test more valuable than to simply evaluate the play. This test is your best chance to ever detect sophisticated card marking systems in play.

I have been asked numerous times to look at suspected marked decks. I always respond by saying, “Can you tell me something about how the hands were played?” or, “Don’t send me the cards, send me the surveillance footage.”

I know from experience that after assessing the video footage I can give an accurate answer as to whether marked cards were in play. How they’re marked is of secondary importance. What’s important is to find out if you’re being cheating, not how you’re being cheated. Although there are literally hundreds of ways to mark cards, there are only three basic ways to exploit this information. In all instances, the play is fairly transparent.

Marked Cards and Top Carding

Beware of any player who acts first, bets big, and always seems to start the hand with a ten or ace. The nine is a break even card and is sometimes included in the combination for cover.

The cheater may also be the second player to act with the first player (an accomplice) sitting out when the top card is read big. Just playing the topcard for betting strategy, a decent spread with little or no deviations from basic strategy is very strong. When the top card is used to help play the hands as well, the cheater’s edge is insurmountable.

Also, don’t assume that the aces must be marked in a way that indicates big card. Betting the ace in early position can be obvious, so most cheaters prefer the ace marked in a playing combination such as : (Aces, 2’s, 3’s) — (4’s, 5’s, 6’s) — (7’s, 8’s, 9’s) — (Tens, J’s, Q’s, & K’s).

Marked Cards and Hole Card Play

Almost all pros are familiar with the typical hole card plays: player stands with stiff against a big card and dealer turns out to be stiff; player avoides a routine double down and dealer turns out to be pat; and so on. Perfect insurance decisions could also be a big gain but insurance is not allowed on most reservations at this time.

Anchors and Card Steering

Anchors are player-cheaters who will alter their play according to the marked cards in an attempt to strengthen or weaken the dealer’s hand. To cheat the player-banker, anchors will attempt to leave the dealer with bad cards and take off (hit with) the good cards.

This aproach is strongest when more than one cheater is the player to act last. A classic example is where the last player(s) stand with stiffs against a big card because the hole card is read small and the top card is read big. This results in a dealer bust. It’s also possible to have a take-off man bet the limit in middle position, without ever making a suspicious play… the player(s) acting last do all the work!

In CBN, Wong stated: “Marked cards benefit the player, who has control over how his or her hand is played, but not the banker, who plays a fixed strategy.” This is a common misconception. The reality is, players can be cheated with marked cards too. Here, the player-banker is in cahoots with the anchors taking off bad cards and “playing short,” leaving the good cards.

Another variation is where the player-banker teams up with a cheater that sits in front of a targeted player, usually a high roller. The cheater takes off good double down cards and overall attempts to leave the player with as many stiff drawing totals as possible. This variation is known as an “early anchor.”

That’s it. Top carding, playing the hole card, and the anchor (with steering) are the three basic playing styles used in conjunction with marked cards.

What can be done to stop this scam? First, two of the most common misconceptions:

Misconception #1: A “brush,” “door,” “curtain,” or any cover designed to hide the top card of a choe will prevent a marked card scam.

Not true. If the dealer must deal a hole card, a split second is all that’s needed to read the hole card. This is probably what happened in the Whitehill play. The 9-10 combination suggests a hole card play that would work even with protection to the shoe.

Misconception #2: If the player-banker does not take a hole card until all players have completed their hands (European no hole card style), marked card scams are eliminated.

Wrong again. Cheaters have plenty of control over the dealer’s hand when the hole card is dealt after the player hands are completed. Just watch how often the player-banker gets blackjack, twenty or even nineteen when the dealer’s second card is predicated on how the cheater(s) play.

Although independently, neither procedure provides absolute player protection, a combination of these two procedures is the answer. The strongest protection possible against marked cards in a player-banker format is no hole card until all players have acted, combined with a cover to hide the top card of the shoe.

One simple procedural change would virtually wipe out any future marked card scams. I say “virtually” because I know of one system where the top card does not have to be seen or touched and the shoe is completely legit, yet its value is known to the dealer who then signals to the cheaters to play according. But confronting this scam is unlikely.

There are many Indian reservations throughout the state of California that take the integrity of their games very seriously, and to date have not had any major problems or incidents. Don Speer, CEO of Inland Casino Corporation, managing the Barona Casino in Lakeside; Murray Ehrenberg, Casino Manager at Table Mountain Rancheria in Fresno; and Bill Taylor & Tom Elias from the Santa Ynez Casino in Santa Ynez, are just a small sampling of top management throughout the state. Their games are good, honest and fun for players, profitable for professional player-bankers, management teams and tribe.

The opportunity for the professional player in California is enormous. I know many players making money. Professional players are welcomed (if you can fight through the syndicates that have established ground) and are the major element supporting and banking these games.

The working relationship with management is unprecedented in the world of blackjack, and more clubs are scheduled to open in the very near future. The choice is yours. You can learn to protect yourself and continue to take advantage of the opportunities, or choose to play in a more regulated environment where the only down side is unbeatable games, sweat joints, preferential shuffles and getting barred.

The professional players will have as much impact on keeping these games honest as any management team or law enforcement agency. When the hustlers stop saying, “Hey, these guys are suckers,” the isolated incidents will become even more isolated.

After experiencing the game’s unnerving fluctuations, it’s no wonder that many blackjack players have a paranoid nature. But if a few incidents — even a handful of suspicious plays — is justification for avoiding the game at all costs, then add a few more games to the “too dangerous to play”‘ list. You can start with poker, and avoid playing the game anywhere in the country!

Poker can be treacherous considering that the simplest scams are also almost impossible to detect. Look at crews “playing from the same pocket,” “playing cousins,” or “playing top hand,” of which there is reasonable evidence suggesting these scams occur on a day to day basis. You should also avoid any player-banked Asian game and for that matter stay away from casino blackjack. Even the big stores have had incidents of players getting cheated.

If you decide to wait for California to form a Gaming Control Board, you might miss the opportunity altogether with the legality of these games still open for interpretation. The real motive for forming a GCB may be to generate tax dollars from the cardroom industry. In instances of cheating GCB’s are after the fact agencies. They won’t stop you from being cheated, they’ll just give you someone to scream to after you’ve been to the cleaners.

California Indian gaming is a strange animal in a jungle of impressive gaming revenues, legal controversies and hidden political agendas far beyond the scope of this article, but they continue to flourish in much the same way as the California cardroom industry has without a gaming control board. It’s even money that the Indians will continue to prosper with little regulatory intervention.

I realize that marked cards in the California player-banker format can be devastating to the unsuspecting player as the scam doesn’t figure to be a one shot deal. If a cheater and “inside man” get marked cards to the game once, you can assume that the cards will be marked day after day until some player “tumbles.” But, with a bit of common sense and a little street smarts, no knowledgeable player has to worry about getting cheated with marked cards!

The Whitehill incident is unfortunate, and not for a second am I down-playing its seriousness. I know that the publicity has already made a few management teams more aware, has forced some of the clubs to tighten up their card controls, and opened the eyes of many players. The biggest fear for most players is the unknown, but if you follow some of the guidelines detailed here, the unknown can’t hurt you.

In theory, player protection should come from the policies set forth by the management teams, security, surveillance and the appropriate law enforcement agencies, but in the end, the only protection you should ever count on is your own knowledge. Awareness on both sides of the table will keep the games honest, popular and lucrative for everyone. ♠

An Attorney Fights Casino Abuse of Professional Gamblers in the Nevada Courts and Wins

by Richard W. Munchkin

(From Blackjack Forum XXII #4, Winter 2002/03)
© Blackjack Forum 2003

[Bob Nersesian is a partner in the Las Vegas law firm of Nersesian & Sankiewicz. He specializes in representing players in lawsuits against casinos. Richard W. Munchkin is a member of the Blackjack Hall of Fame and the author of Gambling Wizards: Conversations with the World’s Greatest Gamblers.]

RWM: Why is it that attorneys don’t want to take cases in which card counters have been manhandled by casinos?

Nersesian: Number one, there isn’t enough money in those cases. Number two, and this is really bizarre to me, people in our community don’t understand that the casinos are invading someone’s rights when a card counter is back roomed or handcuffed. I can’t tell you how many times I’ve talked with other attorneys about this stuff and the reaction I get is: “Well for god sakes, he was counting cards. What do you expect them to do?” My answer is, “I expect them to follow the law, not falsely imprison the guy, not hold him out there and walk him through the casino and embarrass him in front of the world.”

The law says that if they suspect him of a felony or if he is suspected of committing a misdemeanor on premises, they can detain him. It does not say they can detain him because he is winning, and that is what they are doing. The public accepts that, and most of the lawyers do, too. Across this country professional gamblers are vilified as far as perceptions are concerned. What we are faced with is a private company who says, “We don’t like what you’re doing. You’re hurting us, so we are going to get back at you.”

The general perspective when I approach other lawyers and upper management of casinos about counters being handcuffed, which does occur regularly, they are as aghast as I am. The policy has been changed, and been put out in writing at some properties, after lawsuits that I’ve been involved in.

RWM: That’s good to hear.

Nersesian: They know they can’t do that. I’m giving the upper management some credit here. It’s the way business works. They put out a dictate that says, “We’re supposed to make money.” Then you get down to the functionary level where they don’t deal with management decisions or the overall policy decisions. They just get the directive, “Your job is to make sure we make money.” They don’t know the ins and outs and niceties about it.

The next thing you know they are handcuffing honest people. When the upper management finds out about that, they are pretty straightforward about changing their policies and seeing that it doesn’t happen again. Historically, few lawyers have been willing to sue, and nothing happens because of it. The casino management isn’t even aware there is a problem.

RWM: What is a case worth when a card counter is handcuffed and maybe pushed around?

Nersesian: I don’t want to put down hard numbers, but the patron generally walks away with $5,000 – $15,000. That is provided all the i’s are dotted and t’s are crossed. What I mean by that is there aren’t other reasons for what happened.

The story that comes from my client in the first place is very rarely the story that you can see from the facts once things develop. For example, someone might assume they were back roomed for card counting, when in actuality they were back roomed because the casino suspects them of using a counting device. If that is the suspicion, and it’s arguably supportable, the detention can be found appropriate.

There are usually videos of that back room, and the cases where I have been successful usually show the casino security lambasting my client and stating, “We saw you in the book. We know you’re a card counter. We don’t want your business.” The client is calmly standing there saying, “I told you outside that I didn’t want to come back here. Put away that camera. You are not going to take my picture. You have no business holding me here. You can ask me to leave. You could have done that out in the casino. Let me out right now.”

RWM: Is that what someone should do if detained?

Nersesian: First inform them firmly, but not physically, that you have no desire to accompany them anywhere.

RWM: Should you attempt to walk to the door?

Nersesian: Your call. I’ve had it both ways. Firmly state, “If you want to throw me out, tell me I’m 86’ed or trespass me. Do it now and do it quickly, because I intend to walk out that door.” If they say, “You’re not going,” or “You have to come with us,” don’t fight them, because they may beat the living daylights out of you.

Do I want to see that kind of lawsuit? Not really. You get hurt on those. If they have determined that they are taking you to the back room, they will probably do whatever it takes to restrain you. Your firm statement that you desire to leave and they should not take you back there is all that is needed.

RWM: Unfortunately, the surveillance tapes don’t have audio.

Nersesian: No, they don’t. Once you get in the security office, say it again. That room is recorded with audio.

I want to give you an example of the way the attorneys here look at this stuff. I have a case going to trial on the 23rd. I’m suing a Gaming agent for what he did to a card counter. The court originally dismissed the action. This card counter spent a whole night in jail. He didn’t do anything illegal.

When the court dismissed it, I had to go to the Circuit Court of Appeals in San Francisco, and that court reversed the dismissal. Now we have a judgment of liability. I am $80,000 into this case. What do my friends who are lawyers think when I describe the events to them? The guy spent a night in jail. He has never been arrested in his life. He is a wonderful father of two.

The question to me is, “What was he doing?” He was counting cards. When I ask them what they think it is worth, they tell me, maybe $2,000. I ask, “Why only $2,000?” I was talking to two lawyers just yesterday and they said, “Because he was a card counter.” I said, “So, that’s legal.” They said, “It might be legal but it doesn’t garner any sympathy.”

There might be some truth to that. I don’t think it’s a $2,000 case. If it ends up being a $2,000 case, so be it. I still proved my point.

RWM: What was their excuse for keeping him in jail?

Nersesian: He was actually arrested because he refused to give this cop his name.

At the same time I am trying to sue six other Gaming agents. The courts keep throwing them out. I’m going to take these cases to the Nevada Supreme Court. If that doesn’t work, I will try for the United States Supreme Court.

I can’t believe what these police officers think they are allowed to do. In one instance, and this one blows my mind, I have a client who plays video poker. He found a machine that had an edge and he played the heck out of it. It turned out the machine was misprogrammed. After he won on the machine, two police officers held him in custody for well over an hour and a half, and repeatedly requested that he return the money before he could leave, or alternatively go to jail. He did not do anything illegal.

Here you have the Nevada State Police acting as collection agents for casinos. Isn’t that special?

RWM: Nevada is a very special place.

Nersesian: That one will be going to the Supreme Court for darn sure. Are they going to confirm the court throwing it out? They might. But I have been very impressed with the Gaming Control Board itself and the Supreme Court on gaming issues. Those three guys who make the big decisions. Or, the Nevada Supreme Court. The games tend to go out the window, and they are very judicious, both the Board, and the Supreme Court, about applying the law.

RWM: Really?

Nersesian: Yes. You hear people say that they are rubber stamps for the casinos—not true. From what I can see, at the agent level, those guys seem to have a perspective that they’re working for the casinos. However, the Supreme Court and the Gaming Control Board seem very guarded about their perspective, and that they are working for Nevada. That includes the taxpayers and the people who play in the casinos, as well as the properties.

You might be familiar with another case I handled, which happened at another casino. There was a programming error on a 50-cent video poker machine. A progressive jackpot for four of a kind, which would normally pay $250, instead paid $100,000. My client hit it.

A Gaming agent, in a throwaway off-the-cuff opinion, effectively stated, “There is no liability here on behalf of the casino. The patron loses.” The Gaming Control Board unanimously held that the casino had to pay. You see the distinction? The Board recognizes that the integrity of our system is reliant upon expectations being met. That sure was no rubber stamp decision for the casino.

RWM: If it were a PPE [Park Place Entertainment] or MGM/Mirage property, do you think the decision would have been the same?

Nersesian: Yes, in my opinion that would not make a difference. You see some similarities in this case with the other slot case where the agents held him and tried to get him to give back the money.

One thing that is most curious is the video of that incident. The police officers were citing the Nevada tax base, and implying that injury to that tax base was something they weren’t going to allow to happen. If you take that in context, and expand it out to its logical conclusion, what they are saying is, “We will not allow casinos to lose in this state.” There is a voiced attitude of the agents that patrons have to deal with every day.

I have a client who was back roomed and we tried very hard to get Metro to prosecute the casino for false imprisonment. We showed up at the station and requested they take a report. They wouldn’t take a report. I actually spoke to a police officer who said to me, “Well, he was card counting. Of course they put him in the back room. That’s cheating.”

This is a police officer in the state of Nevada who thinks it is cheating to count cards. No, sorry, the Supreme Court of Nevada has said three times it is not cheating. Reason tells you it’s not cheating. Maybe so, but the guy on the street doesn’t view a professional gambler with any sympathy. It might be jealousy. Whatever the rational might be, there just isn’t a depth of sympathy for card counters and other legal advantage players.

If the cop on the street thinks that is the case, how are you going to get lawyers or the general public to look at these people as anything other than dreck? Are they dreck? Not the ones I know. My clients include business leaders, mathematics professors at national universities, and noted authors. They are not dreck.

This whole concept of treating them as less than upstanding citizens is particularly curious when you balance against it the idea that the casinos are allowed to use their skills to make money, and they are the stellar citizens of Nevada. But a player who uses his skills should be persecuted. Isn’t that a curious perspective?

RWM: It certainly is. Do you have any other advice to the player when confronted by the casino?

Nersesian: Don’t show a fake ID. I know a lot of guys are carrying them. If you use another name, one thing that might add some protection is to go down to the Clark County Clerk’s office and register that name as a “registered assumed name.” The law regarding identification is ambiguous and I believe unconstitutional. The law says,

NRS 205.465 Possession or sale of document or personal identifying information to establish false status or identity.

1. It is unlawful for a person to possess, sell or transfer any document or personal identifying information for the purpose of establishing a false status, occupation, membership, license or identity for himself or any other person.

Nersesian: Pretty broad, isn’t it?

RWM: Wow. So if my wife uses my player’s card in the slot machine, she’s committing a crime under that law?

Nersesian: There is an argument that she is. I don’t think this statute passes constitutional muster. It’s vague and fails to include a scienter element, but do you want to be the guy who spends two days in jail before being bailed out for $5,000 to see if that is true?

There is also a statute, or ordinances, that deal with doing business under an assumed name. The argument will be when this statute is popped on someone who has filed that DBA certificate is that this is not a “false” identity. This is a legal, fictitious identity, and there has to be a distinction between the two, else the assumed name statutes would not exist.

If you are going to use fictitious ID, file an assumed name certificate in the county where you are using it. Even then you can’t be sure you are not committing a crime, as far as Nevada defines one. Isn’t this fun?

Gamblers have gone to great lengths to avoid being noticed. Often the simplest diversion will add hours to the play. For example, I know of a case where a Gaming agent, a professional security officer, and a chief of security watched the wrong guy on the table for hours before they figured out he was getting signals. They were dumbfounded as to where his information was coming from.

Then they watched the other guy at the table, since the first guy was not doing anything to get information. They watched the other guy for hours to figure out what the signals were. The signals were blatantly obvious. My point is not that surveillance is inept. My point is that players think all this stuff is known, and as soon as you do something they are going to see it. The simplest stuff can take years for them to decipher.

On the other hand, I have another case where a guy was popped twenty minutes after he sat down. He was 86’ed. He somehow was in Griffin. His spread was $50 to $200. He’s relatively an amateur.

RWM: Why is this a case?

Nersesian: He was back roomed. And he did everything right. He said, “I don’t want to go there.” They entered the back room. “I don’t know why I’m here. Let me go.” Then the beautiful part, the security guard says, “You’re here because we found you in the book. We know you’re a card counter.” Talk about handing it to me.

To add insult to injury, he asks the security supervisor who says, and this is cute, “You’re here because you’ve committed a gaming violation.” He asked, “What violation?” The security chief essentially says, “I don’t have to tell you.” And he walks out.

Then he kept telling the other security officers, “Let me go right now. You have no right to hold me. You know that I have done nothing illegal. Let me out that door.” They told him to calm down and he said, “I’m perfectly calm. I just don’t want to be here.” Then the supervisor comes back in and my client said, “Let me go.” The supervisor said, “First, I want to ask you some questions.” My client again said, “Let me go right now.” Eventually when it became clear they would get nothing, he was allowed to leave.

RWM: Should he have said, “Call the police.”

Nersesian: That’s the case where we did call the police. They said, “So? You were card counting.” I’ve got a letter from Metro saying, to paraphrase, “We choose not to investigate or prosecute. Our scarce resources cannot be used on such claims.” No, but if a casino calls them up and says they have a disorderly person, how long before they are over there hauling that guy away?

RWM: My first question to you was: Why don’t lawyers take these cases? Now I’m wondering: Why do you take them?

Nersesian: I do this because what is going on in this community is not some minor infringement in everybody’s day-to-day life. To be thrown into a back room against your will, and be told that you have to do whatever they tell you for however long they want—that is imprisonment. It is traumatic beyond what you or I could ever fathom.

Those lawyer friends that I told you about, and they are dear friends, they think I’m tilting at windmills like Don Quixote. I get very angry with them. If you’re a lawyer, you took an oath. When I tell my friends that this is what I do to give back, their reaction is, “Well, that’s pretty silly. You’re giving back by making things worse.” The kind of cases I am talking about, the casinos think they can treat patrons as chattel, as pieces of property. These people are not chattel, and they have not done anything illegal. For a casino to think that they have some special position in society that allows them to do this to innocent people cannot be reconciled with the country we live in.

That’s why I do it. Because it angers me that much. I don’t make money at this. It has been a money loser for years, but it is a matter of principle, and a wrong that needs righted.

Bob Nersesian can be reached c/o:

Nersesian & Sankiewicz
528 S. 8th Street
Las Vegas, NV 89101
(702) 385-5454

Background: Casinos and Nevada Politics

The Nevada Gaming Commission and the State Gaming Control Board comprise the two-tiered system charged with regulating the Nevada gaming industry. The Commission and Board administer the State laws and regulations governing gaming for the protection of the public and in the public interest in accordance with the policy of the State.

The Nevada Gaming Commission is a five-member lay body appointed by the Governor, which serves in a part-time capacity. The primary responsibilities of the Commission include acting on the recommendations of the State Gaming Control Board in licensing matters and ruling in work permit appeal cases. The Commission is the final authority on licensing matters, having the ability to approve, restrict, limit, condition, deny, revoke, or suspend any gaming license.

The Gaming Control Board is made up of three full-time members, appointed by the governor to four-year terms. The gaming statutes require the board to include: one person with a minimum of five years experience in public or business administration; one person who has been a certified public accountant for five years or more, or who is an expert in finance, auditing, gaming, or economics; and one person with a law enforcement background.

The Board’s purpose is to protect the stability of the gaming industry through investigations, licensing, and enforcement of laws and regulations. They also insure the collection of taxes and fees, and maintain public confidence in gaming. The Board implements and enforces the state laws and regulations through seven divisions. Those seven divisions are: Administration Division, Audit Division, Corporate Securities Division, Electronic Services Division, Investigations division, Tax and License Division, and Enforcement Division.

If a card counter or other casino patron were to have an interaction with someone from Gaming, it would most likely be someone from the Enforcement Division. The Enforcement Division is the law enforcement arm of the Gaming Control Board. It maintains five offices statewide and operates 24 hours a day, 7 days a week.

Primary responsibilities are: to conduct criminal and regulatory investigations, arbitrate disputes between patrons and licensees, gather intelligence on organized criminal groups involved in gaming related activities, make recommendations on potential candidates for the “List of Excluded Persons,” conduct background investigations on work-card applicants, and inspect and approve new games, surveillance systems, chips and tokens, charitable lotteries, and bingo.

For an in-depth look at the Gaming Commission, read License To Steal: Nevada’s Gaming Control System In The Megaresort Age, by Jeff Burbank. ♠