Discount deals aren't good for casinos, consultant says

You might think that a blackjack player who won $5.8 million in one day from a casino would not be welcomed back soon.

Not so with Don Johnson. Atlantic City's Tropicana invited him back last weekend not only as a player but also as host for a $100,000 winner-take-all blackjack tournament. In return, the Trop donated $10,000 in his name to the Jon Bon Jovi Soul Foundation, a charity founded by the 1980s rocker.

Johnson gained fame by winning almost $15 million from three Atlantic City casinos between December and April, including his score at the Trop. He told Player's Advantage in June that he bet $100,000 a hand and had an agreement that the casinos would reimburse 20 percent of his losses once they reached $500,000.

Gambling mathematicians figured the arrangement gave him an edge over the casino.

"I think the advantage to it was a bit blown out of proportion," he said in a phone interview this week as he was leaving Atlantic City. "It's valuable, but there's a little bit too much hype. The valuation wasn't as much as everybody is making it out to be."

He said a big part of his streak came from "overperformance." Putting it more simply, he said: "A lot of it had to do with luck. I'll take luck over skill any time."

Despite his wins, he said some casinos still offer discounts on losses.

"It's not the same game as when I played there before," said Johnson, who said he agreed not to reveal details. Casinos make discount deals with high rollers on a case-by-case basis, he explained.

He said Caesars Entertainment Corp. has banned him from all its properties -- 52 casinos in seven countries -- even though some of its casinos continue to make discount deals with other players. Johnson's winnings earlier this year included $4.8 million from Caesar's Atlantic City.

Casino management consultant Jim Kilby, who has 40 years of gaming experience and has co-authored three textbooks on running casinos, said discount deals are "rampant" in the industry and too many executives simply don't understand the risk they pose to the house.

"People who don't know anything about gaming think that surely these guys (in charge) are experts," said Kilby, who has argued publicly against the discounts for more than 10 years. "That could not be further from the truth.

"What you're doing is you're altering the mathematics of the game. The question is how much are we giving back to the player of the casino advantage."

Kilby's advice to casino operators is simple: Don't let the players get the edge.

"You need to draw the line in the sand and say the best we're going to do is to have no casino advantage," he said. "I can't even get them to do that."

The basic premise of any casino game is that the house always has an edge. Over the course of thousands or millions of wagers, the house will get its cut, even though some players will walk away winners.

In roulette, for example, the house advantage for a double-zero game, like those used in Pennsylvania, is 5.26 percent. For every $100 bet, the house will win an average of $5.26 over time.

According to www.WizardOfOdds.com , the house advantage for other games: Craps, less than 0.1 percent for a pass line bet with full odds; blackjack, less than 0.4 percent for a strong basic-strategy player; baccarat, 1.06 percent when betting on banker and 1.24 percent when betting on player; Three Card Poker, 3.37 percent on the ante bet.

Kilby said a theoretical loss can be calculated for each player, based on the total amount wagered and the house advantage. Casinos typically allow for 40 percent of the theoretical loss to be returned to the player in comps, such as food and hotel rooms, he said.

Last chance

Monday is the last day to submit comments on a Gaming Control Board proposal to maintain Pennsylvania's player-friendly blackjack rules. Those include requirements that players' blackjacks be paid at 3-to-2 ($15 for a $10 bet) and that the dealer stand on soft 17 (Ace-6). Send comments to:

Susan A. Yocum

Assistant Chief Counsel

Pennsylvania Gaming Control Board

P.O. Box 69060

Harrisburg, PA 69060

Fax: 717-703-2988

E-mail: syocum@state.pa.us

300 expected in charity tourney

The Mario Lemieux Foundation Charity Poker Tournament on Sept. 17 at Rivers Casino is expected to draw a full house of 300 players, organizers say.

The entry fee is $550, with $100 of that going to the foundation. Players can compete in daily satellite tournaments for a seat in the main tournament. Players will get $15,000 in chips; blind levels last 40 minutes.

Money trail

Slot players lost $51.6 million in Pennsylvania's 10 casinos during the week ended Sept. 4, the Gaming Control Board reported. That's up from $47.3 million in the comparable week last year, when nine casinos were open.

Slot revenue during August totaled $199.2 million, up from $196.6 million last year. Gaming officials said the increase came even though Hurricane Irene reduced play. The state gets 55 percent of the slot revenue in taxes.

Statewide, the slot payout rate is 90.1 percent since the fiscal year started in July. For every $100 bet, the machines return an average of $90.10. Payout rates through Sept. 4 for Western Pennsylvania casinos:

• 89.89 percent: Rivers, where August slots revenue totaled $22.8 million, up from $21.4 million in August 2010.
• 89.74 percent: The Meadows, where August slots revenue totaled $21.7 million, down from $22.5 million in August 2010.

• 90.44 percent: Presque Isle in Erie, where August slots revenue totaled $14.7 million, down from $16.3 million in August 2010.

QUESTION OF THE WEEK

How much money does a slot player put through a 25-cent machine in an hour?

Probably more than you think. Let's say you play three coins at a time and spin the reels every five seconds. That's $9 a minute, or $540 an hour. For comparison, a blackjack player at a full table will get about 60 hands an hour; with a $10 average bet, that's $600 wagered per hour.