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Best of Donald Catlin

Gaming Guru

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What About the Player?

1 January 2012

You may have heard on the news that the state of Massachusetts has approved a bill that authorizes casino gaming in the state. Agreements on the details of the bill were worked out between Senate President Therese Murray and Speaker of the House Robert DeLeo and the bill was then signed into law by Governor Duval Patrick. The bill allows for three casinos and one slot parlor to be located in various parts of the state, one being in Western Massachusetts where I live. So far there have been three sites mentioned: the town of Palmer, the city of Springfield, and the city of Holyoke.

There has been a lot of posturing by the proponents of the bill while using phrases like increased revenue, job creation, and keep the money in Massachusetts. Guess who is never mentioned? The player. The casino business is not urban renewal nor is it a government subsidy program. It is a tourist business. The way a casino makes money is by attracting players outside the community where the casino is located. This means offering the players good games. This is generally achieved by having several casinos in one location and letting competition do its job. This is certainly true in Biloxi and Tunica, Mississippi and is even truer in Las Vegas. (Atlantic City is an enigma to me.)

If we build a single casino in, say, Palmer with games akin to those in the Connecticut casinos (read so-so games), do you really think that someone in Albany would drive all the way to Palmer to play those games? Certainly no one in Connecticut would make the drive. No, all of the players would be locals. The result would be a net outflow of cash from the local community.

What do I mean by good games? Well, you could offer a few Blackjack tables that use two decks and have the dealer stand on soft seventeen. Such a game still favors the house but not by much (.31% house edge). You could offer single zero Roulette (2.63% house edge). You could offer Video Poker games such as 9/6 Jacks or Better (99.54% return), 10/7 Double Bonus (100.17% return), or Classic Deuces Wild (100.76% return). As in Mississippi you could offer 5% vig on the no 4 or no 10 with the vig collected only on winning bets. I would also like to see some slot carousels that offer a 98% return to the player and are advertised as such. I think you get the idea.

How, you may ask, can a casino offer games with over 100% return? The answer is that these Video Poker games are hard to play correctly; the optimal strategy is quite complicated. So a casino can offer these games and make money on the majority of players and at the same time claim these games will return over 100% when played correctly.

In Massachusetts there will be a five-person committee to oversee casino operations in the state and, according to the newspapers, they will have broad powers. It would be nice if this committee would insist that a certain fraction of the games be what I call "good games". Of course, this would necessitate having at least one member of the committee who understands the nature of these games. But maybe, just maybe, if such a policy were to be put in place, players in abutting states would hear that Massachusetts offers the players decent games and we would have an influx of outside money coming into our state. I might play here myself rather than flying to Las Vegas (which is what I do now). In any case, the policy would demonstrate that Massachusetts cares about the player.

There is also the matter of the tax rate on casino income and its effect on casino games, but that is a topic for another day. See you next month.


Don Catlin can be reached at 711cat@comcast.net

Donald Catlin

Don Catlin is a retired professor of mathematics and statistics from the University of Massachusetts. His original research area was in Stochastic Estimation applied to submarine navigation problems but has spent the last several years doing gaming analysis for gaming developers and writing about gaming. He is the author of The Lottery Book, The Truth Behind the Numbers published by Bonus books.

Books by Donald Catlin:

Lottery Book: The Truth Behind the Numbers
Donald Catlin
Don Catlin is a retired professor of mathematics and statistics from the University of Massachusetts. His original research area was in Stochastic Estimation applied to submarine navigation problems but has spent the last several years doing gaming analysis for gaming developers and writing about gaming. He is the author of The Lottery Book, The Truth Behind the Numbers published by Bonus books.

Books by Donald Catlin:

Lottery Book: The Truth Behind the Numbers