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Casino game protection, heat and countermeasures are destroying casino blackjack productivity and revenue, says former Gaming Control agent and casino manager Bill Zender. Casino managers should take another look at the costs of their procedures, to calculate whether their casino procedures in fact cost them more than card counters ever did.
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By Bill Zender
(From Blackjack Forum Volume XXIV #4, Fall 2005)
© 2005 Blackjack Forum

[Editor's Note: In this article, Bill Zender, a former Gaming Control agent and successful co-owner/casino manager of the Aladdin Hotel and Casino, discusses the resistance of casino managers to objective lessons in casino math he provided at a recent seminar at the University of Nevada, Reno. Any poker player knows that to get action, you have to give action--and that means, give your opponent a chance to win. But casinos seem to want to sit there like the tightest players in the world and give absolutely nobody any chance to win. Bill Zender provides an excellent casino-side analysis of the flaw in this kind of thinking. --Arnold Snyder]

Several years ago I wrote an article on blackjack, published in Blackjack Forum, that detailed the card counting “Cat and Mouse” game that went on at the old Aladdin Hotel and Casino in the mid 1990’s. The article outlined what our pit management at the Aladdin were doing to triage the potential risk to our bankroll; identify advantage players in blackjack that posed a real monetary problem, ignore knowledgeable players who did not wager enough to present an immediate risk, and loosen procedures, especially game protection procedures, that would be beneficial to the profit potential of the games.

During this time I concluded, in agreement with several other gaming experts and even a number of professional players, that an ongoing atmosphere of cat versus mouse was necessary to extend the health and wealth of the casino game of blackjack for all parties involved, including the casino operators, the professional players, and the gambling public. It has always been obvious that the success of blackjack from the 1960’s onwards was primarily due to the fact that casino blackjack can be beaten. Other casino games did not attract anywhere near the same numbers of new players, despite the fact that they provide the customer with the thrill of a gamble.

A healthy balance of customer playability and house profitability was quite successful for the Aladdin Hotel during the middle 90’s. This player-casino ecological equilibrium provided many players with a reasonable blackjack game of decent rules and consistently superior deck penetration, while at the same time providing our casino management at the Aladdin some of the highest drop/win hold percentages in the state. Obviously, players and casinos could pleasantly coexist under certain gaming conditions.

However, blackjack success and happiness seemed to end with the beginning of the new millennium, and have actually taken several steps backwards in the process. Today casino blackjack games are less player friendly while being less productive for the casino, with drop/win hold percentage drifting lower then they have ever been, dipping below 10% several times in the Las Vegas Strip properties over the last twelve months. Why has this happened? Didn’t the Aladdin experiment provide enough information to establish the proper course for blackjack procedures throughout the gaming industry? Why in today’s highly competitive gaming market have casino management deserted procedures that have been productive in the past for those that consistently provide only lukewarm returns?

Today there is no long a balanced cat and mouse game. The casinos have gravitated to the position of trying to kill off the mouse and destroy the profitable blackjack eco-system. This situation didn’t happen overnight. It has occurred for several reasons over the last several years due to casino management’s need to increase win percentage without taking into consideration a statistical feature of gambling known as fluctuation. In an attempt to preempt natural mathematical variation into the negative regions, casino executives have turned their backs on time and motion issues that are the bread-and-butter of all service and manufacturing business, and have opted for more disruptive and pace-inhibiting game protection procedures.

Why would any member of management in any business field establish rules and procedures that retard productivity and cost their operations thousands of dollars over the period of a year, while not providing substantiated positive returns from discouraging professional card play?

One of the best examples of this phenomenon was recognized during a casino mathematics seminar I was conducting last spring for the University of Nevada, Reno’s Extended Education program. After providing examples of how decreasing deck penetration will actually lower blackjack revenue production as well as lower the game win/drop hold percentage, and how greater deck penetration would increase the casino’s overall profitability (even after taking into account the possible increase of losses to card counters), members of the seminar were reluctant to go along with this analysis. Their reason? It had nothing to do with the mathematical explanation or examples; it had to do with their own job security.

Several members of the seminar agreed that deeper penetration in blackjack would produce more revenue for their casino; however, they felt that this type of thinking, radical to the blackjack industry at this time, would place them personally in an unsecured position. If changes made to the existing procedures coincided with a negative swing in the games' normal fluctuation, i.e., a lower drop/win hold percentage, the attendees believed that they would more than likely lose their jobs.

“A deep deck penetration would be more beneficial for the house, but what good does that do me and my family if by doing the right thing I have an increased chance of losing my well paying position?” they asked. Unfortunately, with the beginning of the second millennium the gaming industry is still recognized as an industry that believes in “management through termination” when actual numbers don’t fit with management’s expectations.

A number of game protection procedures have become more prevalent in recent years--becoming, in fact, more the rule then the exception--which have been highly problematic for blackjack time and motion issues. These protection procedures are costing the casinos more in blackjack revenue then they save from potential advantage players. I’ve taken the liberty of listing some of these procedures and how I feel these procedures are hurting the casinos while reducing the games' attractiveness to customers and producing--let's face it--very boring games.

No Mid-shoe Entry: This procedure was established to prevent professional players from back counting and jumping into games. The casinos also support the use of this procedure by explaining that it makes the seated players on the table happy because other customers can’t “jump in” and disrupt the “run of the cards”. Unfortunately, although I’ve asked to see findings from customer polls, comment cards, or focus groups that support this assumption, I have yet to see anything of material substance.

Yet, the use of “No Mid-shoe Entry” has not only seemed to be on the increase in multiple deck shoe games, it has spread to the double deck blackjack games as well. In some instances I’ve seen casinos that have “No Mid-shoe Entry” only on their hand held games; why, I have no idea.

Personally, I find implementing a procedure that tells players “I do not want you to play on my games”, seriously wrong. Consider the extreme although still possible example of synchronized dealers shuffling at the same time on every six deck game in a small to medium size casino. If a player were to walk into the casino immediately after the shuffle and the first round of cards had been dealt, that player may have to wait up to fourteen minutes (plus through the next shuffle) to make a blackjack wager. Based on a model designed to illustrate the effects of time and motion on blackjack, this procedure could cost the casino between two and three rounds on all opened tables per hour. For a medium size casino “No Mid-shoe Entry” could cost around $400k to $500k in blackjack win annually with nowhere near the parity gain due to increased game protection. I doubt “bus loads” of card counters back counting blackjack games would cost the casino anywhere near this much.

Decreasing Deck Penetration Points: Now here’s a big killer for casinos utilizing hand shuffling. The intention of casino management is to decrease the percentage of cards dealt so that the card counter will have less chance of winning money from the house. Several years ago I was contacted by an executive from the Flamingo Hilton in Las Vegas and asked if I thought anyone could beat their six deck blackjack games if they cut off three of six decks. I explained that the procedure change would all but eliminate attacks from possible card counters, but the amount of revenue he would lose from decreased productivity would dwarf any expected savings; i.e., the cure worked but the patient died.

In this case, the management's concern wasn’t about what they wouldn’t win; they were concerned with having their boss believe they were doing everything possible to protect the bankroll. I guess you could say that management was doing what was best for their job security.

However, based on a model created to illustrate time and motion issues with blackjack, the increase or decrease of the shuffle point by one half a deck (26 cards), adds or subtracts between four to six rounds per hour from normal round production. This will result in substantial revenue gains if penetration is increased and substantial losses if penetration is decreased. In almost every model example utilizing a hand-shuffled blackjack game, estimated gains from tightening game protection by decreasing shuffle points fails to overcome revenue losses from decreased productivity.

Triple Pass Shuffles: Some casinos still utilize a triple-pass shuffle in an effort to prevent shuffle tracking. In most situations, casinos are probably successful in eliminating shuffle tracking, but at the cost of greatly increasing the amount of time wasted shuffling cards, and decreasing the time cards could be in front of the player. The more time spent shuffling, the more potential revenue-producing rounds wasted for virtually no expected savings from discouraging card counting. This also becomes a problem when casinos utilize a “wash or scramble” before each shuffle. Casinos concerned about shuffle tracking should spend their dollars on batch shuffling machines or better training for their floor supervisors and surveillance operators.

Paying Six to Five on Blackjacks: At the gaming show last fall in Las Vegas I jumped all over Howard Grossman about using a 6 to 5 blackjack payoff with his game of Superfun Blackjack. I was wrong. Grossman explained that his original game did not include the reduced blackjack payoff, but that this was the brain child of Park Place Entertainment management of that time. They wanted a better house advantage on their single deck games and wanted to incorporate the 6 to 5 blackjack payoff rule. While 6 to 5 increases the casino’s house advantage by approximately 1.3% and makes the single deck game more profitable theoretically, it becomes a double edged sword. Six to five will produce more revenue for the casino over the short run, but it will create ill will when the players figure out that they are being shorted on their blackjack payoffs. It doesn’t take long for most players to realize that one casino might be shorting their blackjack rewards while another is giving the players their proper amount due. From what I understand, the customer backlash has already started.

And here’s one aspect that will surprise most people on both sides of the blackjack table...

Continuous Shuffling Machines: At first I was a big proponent of the continuousl shuffling machine. I actually fell in love with Shuffle Master’s Shuffle King machines when they first became available for use in the casinos. These machines eliminated the total amount of time wasted for shuffling cards, which greatly increased total hand production, which in turn created greater profit potential for casino blackjack. Then I realized that continuous shuffling machines eliminated card counting, which all but eliminated the possibility that any knowledgeable player could beat the game. For a casino person like me this was a good thing--right? Maybe in the short run, but I no longer think that is the case over the long haul. Why? Because the game of blackjack cannot be promoted as a casino game that can be beaten by the player if the casino is using a continuous shuffling machine.

If we examine the reason blackjack became an extremely popular game we will realize that it achieved this status due primarily to the fact it could be beaten. Immediately after Dr. Thorpe’s book, Beat the Dealer, became a top selection on the New York Times best sellers list in 1962, blackjack took off like a shot, and continued to climb in popularity throughout the 60’s, 70’s, 80’s, and 90’s. My new concern: If blackjack becomes an unbeatable game will it fall from grace?

The cat has largely closed the trap on the mouse, and the fine balance once achieved between casino revenues and skilled players is quickly vanishing. Soon the public will no longer be romanced by the idea that they can learn how to play blackjack so well that they can live the glamorous life of the professional player, even though only a faction of those people would ever be able to beat the game in the long run.

Maybe this is another reason, besides televised tournaments, that poker has become more popular; it is a game pitting player against player, but with profit potential if one learns the intricacies of the game and masters the ability to seek out and crush the weaker adversary. I believe casino management should learn the lesson being taught by poker. ♠

Bill Zender, who is now providing consulting services to casinos, can be found at Last Resort Consulting.

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