Click here for Part I, here for Part II or here for Part III of this series
The subject of casino-credit is a popular one with frequent Vegas visitors and professional craps players alike. Both types need to stay on top of changes in the law or opportunities in casino operating procedures.
Todays item has Profit Opportunity written all over it.
A player wrote in and asked:
Ive heard that some casinos will write-off a portion of a players marker-debt if he has established a Line-of-Credit. Is that true, and how does it work?
The answer is as resounding, YES! Some casino-corporations have long reduced the amount of an outstanding marker for some of their larger or premium players. With the changing and more competitive landscape, some of that discounting is filtering down to what most Message Board posters call real or normal players.
Why the Discount?
Ø All casinos are willing to comp-back a certain percentage of a players action in the form of comps. For most players, some of the comp-value is usually left untapped. In a recent nationwide gaming survey, Harrahs noted that up to 80% of available comps go unclaimed, unused, or un-asked for by players.
Ø The higher or longer that you play, the more they are willing to comp back to you. There is a generally accepted schedule of comp-percentage allowances based on the expected value (EV) or expected-win from each particular players level and type of bets.
Ø Each casino-corporation has a slightly different comp-formula criteria which is programmed into their Player-Rating computer. Bet-size versus bet-spread versus bet-type versus session-time are all weighed differently by each corporation, but you generally end up with the same percentage of permitted comps.
Ø Generally the formula looks like this:
Ø Of course, you have to remember that a $5 player at the Sahara Hotel-Casino is considered a premium full RFB+++ player, while a $25 player at Caesars Palace will only reluctantly get comped for a cheese sandwich. Each casino has a different comp-threshold that it wants you to reach before they open up the gates to their kingdom.
Ø MGM-Mirage controls slightly more than half (51%) of the city's high-end gambling market through its Bellagio, MGM Grand, Mirage, Treasure Island, and Golden Nugget properties.
Ø Park Place Entertainment with its Caesars Palace, Ballys, Paris, Flamingo and LV Hilton-operations control another 25% of the high-end market, while Mandalay Bay Group (8%) and The Venetian (4%) pick up much of the remaining premium-player business.
Ø The remaining 12% is roughly split between Harrahs, Rio, The Palms, Hard Rock and a few other casinos throughout LV and Clarke County.
Ø The monopolization of the high-end market by those three top corporations actually led to a decrease in the costly practice of discounting high-roller losses.
Ø However, just as you will find in a free-market society, some of their comparatively smaller competitors were willing to cut profit-margins in hope of locking up a slightly larger market-share, or even getting a taste of the high-roller business for the first time.
Ø When the three major players (MGM, PPE, MBG) decided to reduce the percentage of marker-discounts they were willing to offer; the smaller casino operators decided to increase their comp-back values in hopes of snagging some disgruntled up-market players.
Ø This has made the whole Line-of-Credit and Marker-Discount process more competitive. It has also broadened the scope and number of players that now qualify for those discounted markers.
Typically, a casino may ask that a $100,000 loser pay back $92,000 or 92% of the marker-debt (an 8% discount), but The Venetian started pushing that envelope more than two years ago, writing-off and reducing the markers call value by as much as 15% to 25% of a gambler's losses.
That Venetian move forced the other large-operators to follow suit or risk losing too many of its premium-players. Concurrent with that, the smaller casino operators decided to increase their comp-back and marker-debt discounts to snag some of those tasty and profitable mid-level players.
Remember that a mid-level player at Bellagio is considered a whale at the Tropicana, Aladdin, Stardust, Riviera or Stratosphere to name just a few.
Also keep in mind that a mid-level player at NYNY, The Riv or the Aladdin, is considered a super-whale at places like Fremont Hotel, Plaza, Sunset Station, Frontier, Four Queens, or Gold Coast for example.
All of those marker-debt discounting moves have filtered down to lower-ranked players with smaller, but still attractive Lines-ofCredit. In the post 9-11 reality, no casino wants to lose ANY good player who gives the casino a shot at their confirmed bankroll.
To that end, mere mortals like the Mad Professor and other professional craps players have been able to take advantage of that new corporate largesse as it filters down to low and mid-level players.
How to Profit from Marker-Debt Discounts
If youve read my articles with more than just a passing interest, you know that I am a firm believer in skimming significant amounts of gaming-chips from your rail-space during every session. It makes your wins look much, much smaller and your losses look much, much larger.
You can find details of the HOW and WHY of skimming in my Ask The Mad Professor-Part XI article. I also cover skimming and coloring up from a different perspective in my Whales, Guppies, and All The Other Fish In The Sea article.
Let me tell you how marker play can actually add more profit to your bankroll.
As you skim off healthy amounts of gaming-chips during your session, you are not only hiding how much money you have won, but you are making it appear as though most, if not all of your craps sessions are losing ones.
According to the casino, as a craps player, YOU ARE SUPPOSED LOSE. So why disappoint them appear to be a loser...a BIG loser!
While you are actually making a Precision-Shooting profit during most of your sessions, they think that you are just another gambler who consistently loses.
Those apparent losses bring in bigger and better comps, plus they bring in more direct cash benefits. Fully rebating your first-class airfare, pre-paying for your next return to Vegas-ville, and reducing the amount of your marker-debt by ranges of 5% all the way up to 25% are some of those direct cash benefits.
That is the amount that you are entitled to by the casino through its comp-back formula. If you havent consumed all of your comp benefits; then they are usually willing to reduce your marker-debt by at least a corresponding amount, and usually even more.
Remember they want to retain good (read: LOSING) players. They are willing to do whatever makes economic sense to keep you coming back to their gaming-house again and again.
There are many benefits to having a Line-of-Credit arranged at different hotels discounted marker-debt where you have actually made a profit is one of those benefits.
Have a look at a simplified example to see how it all works. Lets say that you have played as follows:
Ø A three-night, four-day stay.
Ø You played four sessions per day.
Ø Each session averaged about 90 minutes.
Ø You played a total of 16 sessions.
Ø That means you played a total of about 24 hours at the craps table.
Ø At each session you pulled down a $1000 marker.
Ø You managed to squirrel away or skim about $400 in chips from each session.
Ø Lets say that your Precision-Shooting was not up to par, but it wasnt altogether lousy. You maintained discipline, and were very selective about how you bet on other players.
Ø Overall you made a $1000 profit, but because of skimming $400 from each session, you appear to have actually lost $6400.
Ø You drew a total of $16,000 in markers from your Line-of-Credit.
Ø In the casinos view, you lost 40% of your exposed bankroll, and your average bet was decent enough to warrant your normal room/food/shows comp.
Ø Exposure or buy-in doesnt usually figure into the comp-equation for low-buck players, but it figures prominently for big-buck and credit-players because of bet-volatility and the larger bankroll-swings that occur with premium-players. That volatility usually heavily favors the casino.
Ø In the final comp-evaluation, they will look at the EV, the expected value that they should have gotten from you and compare it to their actual win. Remember, they think you lost $6400, even though you actually made a $1000 profit.
Ø Lets say that they expected to win about $3500 from you based on your bet-types, bet-level, and betting-time, and that covered your normal room/food/shows comps.
Ø That leaves about $2900 over the expected EV casino-win. Since your normal comps have been covered, IF YOU ASK, they should be willing to knock a little off of your marker-debt, especially if you are willing to pay it off in full before checking out of their hotel.
Ø With that in mind, you could ask for and expect a marker-debt discount of anywhere from $300 up to $750. Lets say you generally agree and accept a $500 discount off of your outstanding marker.
Ø When you settle or pay your marker, you would actually be paying it off with money that you managed to squirrel away at the tables.
Ø Your profit picture now looks like this:
$1000 from your actual Precision-Shooting winnings
+ $500 cash-in-hand balance after marker-debt payment
= $1500 in actual profit
Like I said, there are many benefits to having a Line-of-Credit arranged at different hotels. Discounted marker-debt is just one more of those profit opportunities.
Good Luck & Good Skill at the Tables and in Life.Sincerely, The Mad Professor