A Live Gaming Success Story

By Bill Zender

Enter the Gaming Sage

The Executives from a rather large size gaming property were in a quandary. Their live games were not performing very well for quite some time. Over the last several years their main live games, such as dice and blackjack, had been under performing and had witnessed a gradual decrease in hold percentage. Even with the addition of peripheral cards games possessing higher house advantages placed on the casino floor, the revenue numbers haven’t been what the executives thought they could be. What were they to do?

It was decided that they would contact a wise old casino executive who was considered the best in the business; a "Gaming Sage" so to speak. The Sage was invited to the casino to meet with the top casino executives. The Executives presented the Sage with an extensive PowerPoint presentation where they outlined their games and revenue numbers using colorful graphs and pages of gaming win printouts. The Executives concluded the presentation with a desperate question, "What can we do"?

The Sage pressed his fingers together and thought for quite a while. Then he looked at the executives and explained what it would take to "steady the course" of their beloved live game area of the casino. It wasn’t a suggestion, it was a demand.

Our Gaming Sage went on to stipulate, "You need to promise me three things; first, you will implement the changes I suggest. Second, you will maintain these changes regardless of what happens, and third, you will compensate me a one year salary that is equivalent of what you pay the top executive at this property." "I also want my stipulations in contract form, and that contract will extent over the next one year period." "If these terms are not suitable to you let me know so I can leave and not waste any more of your time". This caught the Executives totally by surprise. Here was this gaming expert dictating to them what he wanted; not only in his position of involvement in the decision making process in the casino, but in his extremely high level of compensation.

The Executives decided they needed to discuss this amongst themselves. The first executive stated that it was an outrage that an outsider would even consider demanding that much decision making power. The second executive responded in kind about the level of compensation, while a third executive sighed and commented that they really had no other place to turn for the advice and direction they needed. Finally, after much heated debate they decided to hire the Sage under the terms as presented. Really, what else could they do?

After a few days the Sage returned and met with the Executives. The executives were apprehensive, but still excited about what they are about to hear from the Sage. What grand ideas does he possess? Does he have a magical method for increasing the house advantage? Can he turn the operation around quickly, within a few days?

The Sage sees the anticipation in their eyes so he takes a deep breath and begins. "I’ve looked at your games and I've determined that the game pace is too slow. You need to increase the pace of your games to achieve more gaming decisions. When you gain more decisions you will make more money; a lot more money" commented the Sage.

"First, you need to speed up your box person-less crap crews. They've become too slow and aren't moving the dice as fast as they should.. Then you need to teach your roulette croupiers better time-spin management. They are wasting too much time trying to impress the customers with their spin velocity. Next you need to speed along all your card games, especially blackjack. Be sure to utilize your shuffling machines as intended. Do not add spins, shuffles, and washes to the cards prior to shuffling. All it does is waste time. If you don't trust the machines have the company re-program the shuffle sequence or get different machines. On the manually shuffled games institute a quick shuffle. Spending time on multi pass shuffles is a huge waste of time and money", instructed the gaming Sage. "Oh yes, and one more thing, forget about cutting off one or two decks from your shoe game. Cut off only 26 cards regardless the number of decks dealt. Cutting off more cards only wastes time.

This wasn't what the Executives were expecting. The Sage did not come up with a miracle solution, but a bunch of ideas completely contrarian to standard live gaming ideas and procedures. The first executive commented, "We can work with the craps crews and the roulette dealer, but we can't change our blackjack procedures that drastically. What about all the card counters." And with that the other executives chimed in, "Yea, what about the card counters and the shuffle trackers…and what about our game protection?"

The Sage peered at the Executives and briefly explained his reasoning. "Forget the card counters and advantage players. There aren't enough counters and shuffle trackers out there to worry about. Also, you have a good floor staff and a well trained surveillance room. Let them worry about game protection. After you make these changes all you have to do is stick to your game procedures, and concern yourselves with dealing to the 99.9% of the customers that really make a difference. Forget about those antiquated procedures and get the hands out".

The Executives still weren't happy about making these changes since they had always heard horror stories about card counters and shuffle trackers emptying casinos for millions of dollars. But in the end they had to comply with the wishes of the Gaming Sage. They had to. They were paying him more then they were the CFO, so they had to stick with his advice.

After a month the Sage returned. The Executives were nervous because they felt the games would be performing better. They met with the Sage. The first executive stated, "Sage we did what you wanted us to do. The live game revenues have gone up, but we thought they would increase significantly".

"That is not important", commented the Sage, "It will come, but you still need to make some changes to your blackjack games or you will chase away your valuable players".

"How does this casino expect to keep customers if your rules are unfriendly? Why do you waste valuable time with this stupid "no mid-game entry"? It already been proven to be useless. All it accomplishes is to prevent customers from playing blackjack. Let them gamble when they want", informed the wise Sage.

"And, please stop changing the blackjack payoffs. Don't you think the players know when they're being short changed on a payoff? Don't insult their intelligence. Pay them what they normally should receive and you will see happier customer's spending money on those tables."

Again the Executives could not believe what they were hearing. Get rid of "no mid-game entry"? Go back to the old pay-offs of 3 to 2 on blackjacks? How could this be? Weren't these rule procedures the modern trend in live games? Wasn't every other casino operation using these rules? The Executives discussed the situation at length, but in the end they had to throw in with the Sage and follow his advice. They had to. He was being paid more then the COO. What could they do?

After a couple of months the Sage returned. The Executives were very nervous because the hold percentage has dropped recently. They meet with the Sage and explain that the hold percentage in blackjack had originally risen after the last rules changes, but in the last week it had dropped.

"That is not important", commented the Sage, "that will pass, but you still need to improve the quality of customer service in your casino as soon as possible". The Executives looked at the Sage and stated, "That will be easy. We will start customer service classes for the dealers and floor persons immediately". "No, that will not do", the Sage shot back in frustration, "Holding customer service classes for only the pit employees is a waste of time and money. That's like putting a band-aid on an arterial wound. You need to implement this program throughout your entire property; from the top down".

The Executives looked at the wise old Sage and commented, "That is impossible. The cost in time and resources would be unbelievable. It would require a constant commitment from us, the Executives, and our staff, and we don't have the time for that…right now." The Sage sat back in his chair and smiled because he knew this would be their position. "Then forget about being a success as a business", informed the Sage. "If you can not commit to superior quality customer service, as a company, you will never possess the ability to contend with your competition". The Sage continued, "It is the quality of customer service which will give your casino a competitive edge in this market, and failing to do so in a manner that is enterprise-wide, will doom your operation to mediocrity".

What could the Executives do at this point? They had to agree with the Sage, because they all knew he was right. It was the commitment issues that were the big stumbling block. However, in the end they had to implement the program as the Sage wished. He was making a higher salary then the assistant general manager, wasn't he?

Three months later the Sage returned and met with the Executives. The Executives advised the Sage that after much time and resources they had completed the first several stages of the customer service program. At first they were quite pleased with the results and with the unexpected, but apparent boost in their employee's moral. However, during the last several weeks the entire live game hold percentage had dropped severely. The Executives were presently considering changing some of the procedures back to the way they were prior to the Sage's recommended changes. Since the hold percentage in the pit had dropped, they had to do "something" to bring the percentage up…anything…right?

This angered the Sage even though he knew this would eventually happen. "Do we control the tides? Do we control the changing of the seasons? No? Then why do you think we can alter the course of statistical fluctuation? And, since you can not influence these variables, you must understand them", explained the Sage. "What will happen, will happen. You need to stay the course and to hold on to what is real". The Sage explained further, "You have instituted changes that provide you with faster and more profitable games. You have made your games more customer friendly, and you have improved the level of customer service. Why now, after a momentary brush with nothing more than bad luck are you leaning toward deserting what is right and going back to your misguided and antiquated ways?

"Stay the course", cried the Saga. "Stay the course and you will see the increase in profit and wealth it will bring you". "If you falter you will return to mediocrity." What could the Executives do? They had to believe in the Saga, didn't they? They had to follow his direction. After all he was getting paid more then their chief legal consul.

The Gaming Sage Prevails

At the end of the year the Sage returns and meets with a now elated group of Executives. "Oh, wise and wonderful Sage, you have done what you said you would do. You have advised us wisely and our games have profited superbly", comment the Executives. "But there is one thing that bothers us". "Go on," said the Sage, for he knew what they were going to say. "We could have made all these changes ourselves and saved money", explained the Executives. "Also, you were hardly here, and we still paid you as much as we did our general manger."

The Sage smiled. "That is true", he told the Executives, "you could have tried making these changes yourselves, but in the end you would have failed". "But why do you say that, Old Sage?", exclaimed the Executives. "Because, while you may have sent your better managers for training, you would never have listened to them. And, even if you had listened to them and made the necessary changes", mused the Sage, "you would have never, ever stayed the course". "Once the hold percentage took a drive or a regular customer had won a large amount of money, you would have panicked and gone back to your misguided and antiquated ways". "You would still have mediocre games with mediocre revenue performance".

The Sage continued, "Do you see why I asked to be paid so much money? I needed your committee to buy-in and back all my ideas and changes. Then I needed you to support these changes throughout the next twelve months so you all could see the long-term benefits from these rule and procedure changes. The only way I could guarantee that you would make a solid commitment to my ideas was by having the casino pay me a salary equivalent to your top executive; ensuring your commitment to me and this program". The Sage continued, "So you're right by thinking the cost of my salary was really unnecessary; but look at your return. You earned my salary five fold by making the right changes and staying on course".

But the Sage was not through. "And here is a warning to you all before I depart. Now that you have seen the righteous path you must stick to it. Be aware the importance of game speed and customer friendly games, and always look for methods to achieve that "one extra" hand of cards, spin of the ball, or roll of the dice. Remember that customer service programs will always be a work in progress. You must always strive to be the best if you want to maintain that competitive edge." "And remember lastly", instructed the gaming Sage, "once you have positioned your games and trained your staff, you need to stay the course, for if you falter and retreat to those costly and misguided ways of the past, you will forever fail to meet your potential".

The Moral of this Story

Let's assume all stories have a moral, although this little fable actually has several. First, it doesn't take an "old gaming Sage" to tell you what to do when analyzing your live games. The information regarding the best procedures and rules are out there. You just need to know what is best for your property. Here are three points that were explained by the gaming Sage in the story and ones I believe are the most important:

• Optimize game pace so that more gaming decisions can be obtained
• Provide the customer with friendly and interesting game rules. Don't try to "gyp" the players through reduced payoffs and confusing rule changes
• Establish a customer service program that is property-wide and is constantly being improved upon. This program needs to be treated as a "work in progress"

There's one more point this story was trying to drive home. Do not to over react to standard and normal fluctuations in win and game hold percentage. In order to prepare yourself for these fluctuations, and possibly executives immediately above you on the organization chart, you need to look at your games' past performance history. By examining the monthly variance in each game type's hold percentage you can estimate the range, both low and high. This information will prepare you (and your boss) for future variances. It's important that everyone understands the mechanics behind statistical variance so the there is no overreaction to hold percentage dips. [Note: 99% of all drops (or raises) in hold percentage have nothing to do with performance of the pit staff or the amount of possible advantage play and/or cheating.]