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Fairplay casinos

Gov. Deval Patrick plans on funding necessary and humane projects in Massachusetts by licensing three casinos. I’m not crazy about that idea, in part because casinos stack the odds against customers. The house always wins. That’s unfair, even though casinos are transparent it.

If we’re going to finance public programs on the backs of the desperate, we at least ought to give our local pigeons fair odds. So, why not require Massachusetts casinos to pay out at odds that factor in no cut for the house? If there’s a 1:38 chance your number will come up at the roulette table, your winning number would be paid at 38:1, not 36:1. Even without their edge (5.26% in roulette), the casinos would make money selling food, liquor, lodging, parking, pay-per-porn in-room tv, and tickets to entertainers you thought died fifteen years ago.

Not only would this keep the state from profiting from an industry predicated on unfairness, it would also give Massachusetts casinos a competitive edge against the casinos in those other states. Why would you gamble in a place where the odds are stacked against you if you could instead “A mass more wealth in the Commonwealth of Massachusetts…the Fair Play State.”

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6 Responses to “Fairplay casinos”

  1. Won’t work. The proposal assumes that food, drink, “entertainment”, etc are part of the product. They’re not, they are part of the bait. It the casinos tried to live on room charges etc their potential haul would be drastically reduced — the customer can only eat some many meals, drink so many drinks. Gambling (gaming!) has no limits other than what they judge is your credit worthiness.

    At the roulette wheel that 5.26% combined with compelling room dynamics and fast play gives them access to the equivalent of weeks or months of room charges. And they don’t have to buy any food or make any beds, just change your cash into chips and let you hold the chips ;for a while.

    How much do you think Bill Bennett paid for rooms, food, drink, or other at those casinos where he played slots?

  2. Wray, I don’t mind if casinos make less money. Obviously, they have to make _some_ money, so let them stop plying gamblers with free liquor, charge more for rooms, etc. Hotels make money. Why wouldn’t hotels with casinos make money?

  3. David,

    Two points:

    – If what the casinos “make” goes to funding of “necessary and humane projects,” then it seems reasonable to allow them to make a lot.

    – You refer to the casino patrons as “the desperate,” but most patrons freely choose to gamble as a form of recreation. An idea does occur to me, however, that maybe a portion of the casino earnings should be earmarked to fund necessary and humane projects that help problem gamblers.

    Curious Ray

    Wikipedia’s article on problem gambling is here:
    http://en.wikipedia.org/wiki/Problem_gambling

  4. A completely odds-neutral gambling casino changes the revenue extraction model so much I suspect it bankrupts current casinos. Current rule: the longer you play the more you lose. New rule: the longer you play the more likely you are to break even.

    Consider the short term gambling outcomes: you win, you lose, or you break even. Under the current system the house encourages you to play on in all cases where you win or you break even; plus all cases where you’ve lost but they judge you credit-worthy of an advance (because the more you play the more you lose). This credit-worthiness is actually a pretty loose and optimistic call because if they don’t eventually recover everything they “loan” you they are really out very little, probably not even the croupier’s salary for your few hours of compulsive gambler bliss.

    Change the model and suddenly the house has no interest in pushing any of the three cases from the short term to the long. If someone wins big early the house has no reason to believe that comping the mark with food, lodging, etc, is going to have any beneficial outcome for the house, With losers you could make a short term argument for kicking ’em out before they win it back. That is, of course, not a very attractive long term customer retention strategy.

    Here’s where I think that neutral-gaming bankrupts the casino. When someone wins big early they naturally consider stopping, maybe buying those new shoes the kids need. They leave since the house has no compelling statistical reason to pay them to stay. Who’s left? The losers who are now committed to playing long enough to get back to even. If their pockets are deep enough and they have enough accumulated vacation they’ll make it. In this reading the house pays more winners and collects less from fewer losers. And the Nevada desert wins in the long term.

  5. Wray, really interesting analysis. Thanks.

    But I’m not sure that the reasoning you propose will actually be modeled by patrons. Don’t winners in normal casinos often continue to play rather than cashing out? Why would that change if the odds were fair? Further, if the house believed that winners would stay until they’re losers if only winners were comped, they could comp (or discount) winners. Besides, don’t they comp big players, not big winners? If I go to Vegas and win a bundle, will I find my room comped? (I don’t know.) In any case, I find it very difficult to predict how gamblers would react to fair odds. I’d sort of like to find out, though.

    Are there no casinos in the world that offer non-skimmed payouts?

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