Las Vegas Sun

November 14, 2018

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Playing the percentages

Gamblers looking to get the most value for their money are more likely to find it elsewhere than on the Las Vegas Strip, particularly on slot machines.

If they insist on playing table games, they're better off avoiding those big, spinning wheels that invite $1 wagers with hopes of hitting the number covered by their dollar bill.

That's part of what can be gleaned from the state Gaming Control Board's monthly casino revenue reports. The reports reveal the win percentages casinos enjoy on specific table games and slots and also break down those statistics by geographic location throughout the state.

The statistics are for establishments that have at least 16 slot machines and/or table games. They do not include places with restricted gaming licenses such as bars and convenience stores with 15 or fewer slots.

The report for May 1, 1998, through April 30 shows that with few exceptions North Las Vegas casinos were the best places for gamblers to play slots. The Boulder Strip, which includes Henderson, generally was the best area to play blackjack and craps, while downtown Las Vegas casinos gave players the highest payouts in Caribbean Stud and Let It Ride.

UNLV hotel management professors Shannon Bybee and Jim Kilby said they weren't surprised that the Las Vegas Strip had the Las Vegas Valley's highest winning percentage against gamblers on most games. Neither were Mirage Resorts spokesman Alan Feldman or gaming analyst Larry Grossman, who hosts a radio talk show on gambling.

They said there are at least two reasons why. One is that Strip customers are mostly tourists who on average aren't as price-conscious and don't gamble as often as local residents who play in off-Strip casinos. The Strip also has different table game rules in many cases and more of the types of slot machines that can increase the house advantage over the player.

"The profile of your customer determines the games you offer," Kilby said. "The more sophisticated the customer the more discerning they are."

Feldman said that about 95 percent of the Strip's customers are tourists. Because Strip tourists come for the "total experience," including shopping and elaborate shows, price is not necessarily as important to them, he said.

"The off-Strip properties are much more competitive in gaming and they use that more in their marketing mix," Feldman said. "On the Strip gaming is just part of the entertainment mix. Capital expenditures are also much more substantial on the Strip, and you need capital to cover that."

Grossman, who will be back on KBAD radio 920-AM in August, agreed that the off-Strip casinos are more competitive, making the payoffs better for gamblers. He said the off-Strip casinos are like the supermarkets that charge a dollar for a hot dog compared to the $3 customers will spend at a ball game, where they're paying for convenience.

"If you live here, you might go to a Strip hotel because there are certain things you like about that hotel, but you can also go to a bunch of other places because you have the time," Grossman said. "You know the best places for locals."

Glenn Christensen, chief financial officer of Station Casinos, whose operations includes resorts in North Las Vegas and the Boulder Strip area, said the local market is completely different because the customer visits frequently throughout the year. In terms of both revenues and cash flow, Station Casinos is the largest off-Strip gaming company in the valley.

"Typically the local operator has a much higher reliance on slot operations, and they're volume-oriented," Christensen said. "It's not unusual to see our customers a couple of times a month. Contrast that to the Strip, where they might see a customer once every couple of years."

Christensen said about 88 percent of Station Casinos' cash flow comes from slot machines. In contrast, Strip casinos generate only about 35 percent of their cash flow from slots, and about one-third from nongaming operations, he said.

The state uses separate formulas to calculate the win percentages for slots and table games. For slots, which include video poker and traditional reel-based machines, the win percentage represents the amount the player wins divided by the total amount wagered. The wagers include credits that have been played back into the machine.

For table games the win percentage is the amount of chips a player ends up with divided by the amount purchased. Unlike slots there is no way for casinos to keep track of the amount wagered in table games.

The winning percentages Las Vegas Valley casinos enjoy on slots vary from about 1.3 percent to 12.5 percent depending on the denomination played. In general the house enjoys its lowest winning percentages on slots from 25 cents and higher with the exception of Megabucks, from which the casinos get their highest winning percentages.

Compared to the Las Vegas Strip, the casinos in North Las Vegas have winning percentages that are 2 to 4 percent less on most slots from 25 cents on up. In theory that means that gamblers can make their money last longer in those North Las Vegas casinos.

The difference, said Kilby, is that casinos in North Las Vegas and elsewhere in the valley have a higher percentage of video poker machines than does the Las Vegas Strip. Video poker requires skill and such slots generally yield lower winning percentages for the house than do the reel-based machines more popular on the Strip.

George Maloof, owner of the Fiesta hotel-casino in North Las Vegas, said his resort has purposely sought the video poker market since opening in 1994. The Fiesta has paid out more than 118,500 royal flushes since then and has proclaimed itself "the Royal Flush Capital of the World." Its marquee even gives passers-by the running total of royals paid by the casino. Of the 1,400 slot machines at the casino, 1,000 play video poker.

"When we built the Fiesta we wanted to give the player the opportunity to spend more time on a machine and a better chance to win," Maloof said. "That hasn't changed in five years."

But Bybee, who is executive director of UNLV's International Gaming Institute, warned that win percentages in slots can be misleading because a big jackpot can throw the numbers out of whack for other players. He also said local players could end up losing more money than Strip tourists in the long run even though off-Strip slots have better average payoffs.

Locals not only come to casinos more often, they spend more time at the machines, Bybee said.

"The idea with the lower win percentages is to keep them playing for as long as they can," he said. "In the long run, they'll probably lose more."

In a survey performed a few years ago Kilby said he found that most of the slot machines at Sam's Town and Palace Station were video poker machines and that only about one-third were reel-based. At the Mirage and Caesars Palace, three-quarters of the slots were reel-based and only about a quarter were video poker machines.

"The only skill with the reels is knowing how many coins to put in," Kilby said.

Though reel-based machines give the house a higher win percentage there's a reason why tourists prefer them, Bybee said.

"When people come to Las Vegas who don't play a lot they want something that is easy to understand," he said. "The poker machines take more knowledge and a while to understand them."

Table game rules also differ in ways that allow Strip casinos to win a higher percentage of money than gambling establishments elsewhere. Casinos in downtown Las Vegas and along the Boulder Strip offer single- or double-deck blackjack games that make it easier for players to count cards, thereby reducing the house advantage. Card-counting is far more difficult on the Las Vegas Strip, where it is more common to see six-deck shoes at blackjack tables.

In craps it is far more common for casinos away from the Strip to give players the opportunity to take a higher amount of "free" odds behind the pass line. In other table games, non-Strip casinos may offer a 2-to-1 payout on certain hands, meaning the gambler wins two additional chips for every chip wagered. The Strip may only offer a 2-for-1 payout, meaning only one additional chip is won for each one wagered.

Kilby also said there are far more high-stakes tables in Strip casinos than elsewhere, which also improves their win percentage. The high-roller limits typically don't have as many players per table as do the low-limit games. The fewer players at a table, the higher the win percentage is for the house, Kilby said.

He gave the example of two blackjack tables. One table had six players, each of whom bought in for $100. The other table had only one player who also bought in for $100. Let's say they all bet $10 a hand and the house advantage based on the odds was 1 percent.

The table with the six players bet $60 total per hand and played 60 hands an hour for a total of $3,600 wagered. The casino's 1-percent advantage translates to $36 an hour. When divided by the $600 the players purchased in chips, the casino's win percentage for that table is 6 percent.

The gambler playing at the other table can be dealt many more hands in that hour since no one else is facing the dealer. If dealt 200 hands an hour at $10 a wager, that's $2,000 worth of gambling. The casino's 1-percent advantage translates to $20 an hour. But that number is divided only by the $100 that that player brought to the table, giving the casino a 20-percent win.

For table games the casinos' win percentage locally ranges from about 11.6 percent to 45.7 percent depending on the game. The casinos' highest win percentage by far comes from the Wheel of Fortune, not the popular slot machine of the same name, but the giant wheel that spins around until it stops on the winning number. A gambler who comes to the wheel with $100 will leave with only $54 to $58 on average, according to the Gaming Control Board numbers.

By comparison that same gambler will leave with roughly $80 to $88 if he plays blackjack or craps, and a bit less if he plays Caribbean Stud and Let It Ride.

In a game such as craps a skilled player can reduce the house advantage to less than 1 percent on a single roll of the dice. But if that gambler stays at the table for a lengthy period, the house advantage can accumulate to the point where the casino's win percentage is far more than 1 percent. Kilby said that explains in part why the casino win percentages in craps run into the double digits.

"Ultimately the thing that gets someone to come back to a casino is the way they're treated," Kilby said.

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