Making the Game: Quest for next specialty-table hit not for the risk-averse

By Dan Michalski, Special to the Sun

Tuesday, Oct. 11, 2016 | 2 a.m.

You win some, you lose some. For Young Gi Lee, the game that stood to deliver on this promise was Color War.

“It’s a simple bet. Choose red or black,” he said.

Lee, 28, learned in July that Nevada’s Gaming Control Board had approved a game he invented as an undergrad in a gaming innovation class in the fall 2013 at UNLV. Lee shared his excitement with friends and family by posting to Facebook pictures of the board’s letter of approval for a 45-day field trial, and his new Nevada license plate declaring, COLRWAR.

A field trial is the final step for a game prior to full approval by Nevada gaming regulators. It’s also a chance for casinos to assess the game’s likelihood for continued success.

“It’s the easiest game on the planet,” said Lee, explaining his game’s appeal. “Anybody can play right away.”

In Color War, seven-card stacks are dealt face down from a standard 52-card deck to players and a dealer, who then flips each hand to see if there are more red or black cards in each hand.

If the majority of your cards match your color choice, you win even money, unless the dealer has six or more cards of the opposite color, which results in a push. Side bets pay special bonuses. Six cards of the same color pays 5:1; seven cards of the same color pays 30:1. If all seven of your cards are the same color and the dealer's seven cards are all the opposite color, the bonus pays 300:1. If all seven of your cards are the same color and all seven of the dealer's cards are the same color as your cards, the “royal color” bonus pays 1,000:1

Color War fits in a gaming category known as “specialty” table games. Let It Ride, Three Card Poker, Caribbean Stud, Spanish 21, Blackjack Switch, Ultimate Texas Hold’em are among the dozens of branded games that populate casino floors. Casinos pay game creators a monthly licensing fee for each table placement, anywhere from $300 to $2,000, depending on popularity with players.

These games cover about 25 percent of all table gaming floor space in Nevada casinos. While game developers attended the Global Gaming Expo (G2E) last month for insight into the next wave of gaming, revenue numbers and a few table-game experts reveal how these derivatives of poker, blackjack, pai gow and baccarat are evolving.

Since 1985, Nevada Gaming Commission has approved more than 900 specialty table games, with the number of applications continuing to rise over the years. Most, however, have come and gone.

“The process of getting a game from concept to casino is a long and winding road,” said Dan Sahl, associate director of the Center for Gaming Innovation at UNLV. Beyond conceptualizing the product and doing the math, game makers have to contend with patents, trademarks and then regulatory testing before finally getting to a field trial.

It is hard to quantify how much revenue specialty tables generate for casinos, in part because gaming auditors don’t track every title as a single line item. Some of the most popular new games are variations of traditional games such as blackjack and baccarat, or consist of progressive overlays.

“The general rule is if it's a variation of a certain game type, put it in with that game type,” said Mike Lawton, senior research analyst for the Nevada Gaming Control Board.

Specialty table games carry extra significance as a way to appeal to new gamblers, and because they deliver some of the highest win percentages for casinos. While traditional table games carry a house win percentage of somewhere from 12-18 percent of all money wagered on them, according to Nevada gaming revenue reports, specialty table games are more likely to return win rates for the house closer to 25 percent. (Players can reduce the house advantage to less than 2 percent in blackjack, craps and baccarat, but most don’t play optimally, especially with specialty games, as these gaming revenue numbers indicate.)

“It works because most players don’t understand the math,” said Mark Yoseloff, founder and executive director of UNLV’s Center for Gaming Innovation, who was also Lee’s professor in the gaming innovation class. “They think they’re getting something special because of all the special rules.”

“The challenge for a game inventor is a table game takes up space and requires dealers,” Yoseloff said. “To replace one game they have to make more money with a specialty game than they could with a traditional game. Will it do better than their worst performing blackjack table?”

These different branded games emerged in the 1980s and came of age in the 1990s, as casino markets were proliferating across the country, and new properties were seeking ways to stand out from competitors, and hopefully keep customers coming back. Their presence and influence have been growing steadily ever since.

Roger Snow, senior vice president of table games at Scientific Games, compares the expansion to TV. “You used to only have three or four networks,” he said. “Now you have Netflix, Hulu and hundreds of other options. Table games imitate the rest of the entertainment industry, and people like choices.”

Yoseloff, a former chairman of Shuffle Master (now SHFL Entertainment, owned by Scientific Games), says technology also played a role in their expansion, as his company was designing these games in part to help create a market for their automatic shufflers.

“Most of these games offered some sort of jackpot,” he says. “When you’re offering a $25,000 prize for a particular hand in a game, you don’t want to put the cards in the hand of a person to shuffle and deal. It’s just that simple.”

So what goes into a good game? The most successful specialty table game of all time, Three Card Poker, delivers one of the highest house win percentages of any game — 31.7 percent in 2015. The game generated $149.2 million in Nevada in 2015, or 3.6 percent of the state’s total win for all table games.

While the game itself has hardly changed since it was introduced in 1996, last year Scientific Games used Three Card Poker to introduce the concept of tournament play and live events to specialty table gaming.

The second annual Shuffle Master Classic Three Card Poker National Championship took place Sept. 26 at the Venetian during the G2E. Ninety-one players from across North America won expenses-paid trips to Las Vegas by hitting different jackpot hands on 10 specialty table games at more than 220 casinos across North America. This earned them a chance to compete for a share of a $250,000 prize pool, with $100,000 going to the winner.

Sherman Landry won his seat by flopping a royal flush playing Ultimate Texas Hold’em at Bear River casino in Loleta, Calif., in the summer. “Don’t bet the sucker bet,” said Landry, explaining his strategy of avoiding an optional bonus bet with high payouts but low probability.

He was new to Three Card Poker but was leading his table and would eventually move on to a second round of play. “I’m feeling the energy,” he said. “I’m a little nervous. I’m not gonna lie.”

The ability to control the size of your bets as the hand takes shape, supporting the perception that the players can influence the outcome, is part of the appeal of Three Card Poker. “Skillful play can’t eliminate the house advantage, but the ability to feel yourself getting better makes the game more attractive,” Sahl said.

“There’s still some skill, but Three Card Poker requires less strategy than regular poker,” said Alan Cuiwilko, who hit a royal flush while playing Caribbean Stud at the Turning Stone casino in Verona, N.Y., to win his seat. “Some people don’t have the skill or patience for all the nuances of regular poker. But in Three Card Poker, you don’t have to bluff. All you have to do is beat the dealer.”

Cuiwilko had already busted out of the tournament but was waiting for a second-chance drawing that was going to allow some players to re-enter the tournament.

Snow says he sees a future where the Shuffle Master Classic could consist of multiple events, like the World Series of Poker, providing a chance to crown national champions not just in Three Card Poker, but also in Four Card Poker, Ultimate Texas Hold’em, Let It Ride, Mississippi Stud, and other proprietary games.

But while that vision may be many G2Es away, Snow says one trend taking hold are simple, intercasino-linked side bets overlaid on standard tables. “The fastest growing element in our business is adding progressives onto table games, particularly blackjack,” he said.

He points to Blazing 7s, now at the Wynn, Palazzo and 400 other casinos “from Puerto Rico to Pennsylvania,” Snow said. The game offers players an optional bet that pays off different amounts based on the number of 7s in your hand.

(Three 7s of the same color, for example, pays out 500:1 on some tables, 10 percent of the progressive on others.)

But still, only a tiny percentage of these proprietary offerings make it to the casino floor for any significant time.

According to Snow, beyond a good hook and enticing jackpot, games require a “secret sauce” to connect with players. “It takes a little bit of alchemy, and a little bit of timing to succeed,” he said.

“If you’re in this business, you’re in the failure business,” said Snow, noting that a large company might expect 1 in 10 new games to succeed, while for smaller operators and individual entrepreneurs, 1 in 100 is a better estimate.

“We’re not playing baseball; we’re playing home run derby. We’re looking for a game that can make millions of dollars a year,” Snow said. “Proprietary table games can be frustrating because you put the same amount of effort into a game that becomes wildly successful as a game that whooshes through its field trial and gets removed two days after it’s approved.”

Color War was two weeks into its six-week trial field trial in August when Lee got word, unexpectedly, that Palace Station was pulling the plug, saying it wasn’t meeting revenue expectations.

“Two weeks is not enough time to prove anything,” said Lee, now a graduate student at UNLV, pursuing master’s degrees in business administration and hospitality administration.

Lee says he’s not giving up on Color War.

“I still believe in my game,” he said. “It was just in the wrong place at the wrong time. I’m confident it will do better in a location with more tourists.”

His next step is to conduct market research before hitting the Strip and knocking on doors for a venue to complete his field trial.

In the casino business, the house may always win, but creating the games for that still requires a little luck.