Are casinos making big changes before looking to see if they need to make small ones?

Las Vegas casinos have recently implemented changes that have left visitors feeling short-changed. Minimum bets for blackjack have increased, while payouts for winning hands have decreased. Additionally, placing bets in roulette has become riskier on the Las Vegas Strip.

According to The Wall Street Journal, casino executives claim that these changes are part of a strategy to attract higher-value customers. Tom Reeg, CEO of Caesars Entertainment, explained to Wall Street analysts that the goal is to bring in higher-value customers while phasing out lower-end ones. He sees no reason why this strategy should stop or change.

However, losses for blackjack players have reached their highest levels since 2007, with nearly $1 billion lost on the Strip in 2022, according to data from the Nevada Gaming Control Board.

Former professional poker player John Mehaffey believes that visitors are starting to notice that something is amiss, but they are not sure what it is. Mehaffey and his wife Kristina have compiled data that shows that over two-thirds of blackjack tables on the Strip have shifted from 3:2 payouts to 6:5. This means that winning gamblers receive $12 for every $10 bet, instead of the $15 they would receive in a 3:2 payout.

Furthermore, bets at roulette tables on the Strip have become more challenging to win due to a triple-zero iteration of the game that favours the house over the gambler, as reported by WSJ.

The Casino Strategy for Higher-Value Customers

Any casino's strategy to attract higher-value customers may be understandable, but it is essential to ensure that visitors feel that they are getting a fair deal. The changes in minimum bets and payouts may leave visitors feeling cheated, which could ultimately harm the casinos' reputation. It is crucial for casinos to strike a balance between attracting high-value customers and providing a fair and enjoyable experience for all visitors.

Questioning the New Strategy

While it is understandable that casinos, like any business, are focused on making a profit, the question remains: is this new strategy necessary and sustainable?

A Case Study in Casino Changes

A recent client of ours installed triple zero roulette and automatic shuffling machines on the blackjack tables in an effort to increase revenue from entry-level players. However, upon closer inspection, something seemed amiss. The games were operating at a much slower pace than expected. To substantiate our concerns, we conducted a target analysis on a selection of these tables to collect productivity data.

Our findings revealed that the roulette spin rate was only 30% of what would be expected given the number of players, chips, and value. Similarly, the blackjack tables were operating at only a third of the expected number of hands. Interestingly, our analysis also showed that the manual shuffle games were slightly faster than the automated shuffle games, but the manual shuffle was taking twice as long as expected.