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Understanding Table Games Yield Management
by By Bobby Liscio

Casino Table Games Occupancy/ Utilization are an often misunderstood basic analysis of a casino operation. Operating occupancy and utilization have been used for many years in other industries, airlines and hotels to name a few. These reports assist the operators to determine heavy volume business periods to maximize profitability as it relates to average room rates and ticket prices.

In the table games world, managers can use historic tends to predict heavy volume periods including months of the year, days of the week and times during the day using these reports. Typically, weekends are much busier than mid week business and dinner time often turns into a slower period of the day. By including table minimum in the equation of the reports helps further define operating efficiencies.

Where the report is often confusing, is in understanding the difference between occupancy and utilization. Occupancy is nothing more than the number of open position at the gaming tables verses the number of spot being played. For example, if there are 6 blackjack tables open with 6 spots on each, this equals 36 open positions. Having 18 spots being played on the 6 tables, would calculate occupancy at 50%. This percentage only tells us very basic information and nothing about the quality of the play. As managers, we can easily achieve a very high occupancy by lowering the table limits to $5 or $10 dollars. With $5 minimum limit tables, taking into account the general operating expenses in a table operation; dealer wages, supervisor and manager salaries, company benefits, vendor supplies, ancillary support departments, complimentries, jurisdiction gaming taxes, etc. we could not turn a profit. You will, however, have bragging rights to extremely high occupancy as your casino goes out of business.

The point is, occupancy tell us nothing about the quality of the play on the casino floor. Utilization can achieve this by incorporating table minimums with occupancy. By evaluating both occupancy and utilization, a very efficient floor evaluation report can be generated.
By taking this a step further, based on the type of action at your casino, different table minimums would require separate occupancy and utilization percentages based not only on game type, but also table minimums.

Higher profitability is generated with higher limits and fewer players at each table, based on more hands, spins or rolls per hour. By using good professional assumptions and predictive analysis, your management team will be making solid, informed decisions verses guessing and hoping.
Let’s start with talking occupancy. Normally, casinos that deal to higher betting players will look for a lower occupancy as it relates to the entire casino floor. These casinos will generally offer $500, $200 and $100 games in their high limit rooms. Casinos dealing to less high end action should look for slightly higher overall occupancy; generally $50 and $25 limits are the highest on the floor. The chart below represents higher action casino verses a lower action casino as it relates to game occupancy. The numbers are weighted based on the number of games open for each table minimum. Each example was based on the weighted averages on a 100 table operation for easy comparisons.

Higher Limit Casino Lower Limit Casino
Table Minimum Occupancy Target % per Table Min. % of Each Table Minimum Average Weighted Occupancy % of Each Table Minimum Average Weighted Occupancy
$200+ 16.67% 5% 83.35 0 0
$100 25% 5% 125 0 0
$50 33.30% 10% 333.33 5% 166.65
$25 50% 25% 1250 15% 750
$15 66.67% 25% 1666.75 20% 1333.4%
$10 83.33% 30% 2499.9 30% 2499.9
$5 91.66% 0% 0 30% 2749.8
Weighted Average 100.00% 59.58% 100.00% 74.50%

It is evident; the casino offering higher table limits will run at a lower occupancy, approximately 60%. The casino offering lower table limits are able to operate with a higher occupancy, approximately 75%. For smaller casinos, a basic occupancy report may be sufficient without factoring in average table minimums. However, for larger casinos that seek high end customers, it is imperative to include utilization with table limits to determine the quality of the play.

Below is a sample graph to track the occupancy and utilization. Your management team can decide how many spots played on the different table minimums are considered 100% utilized. In this illustration, a $200 + table is 100% utilized with only one player. A $100 table with 1.5 players and a $50 table with 2 players.

Table Minimun Utilization Target per Table (spots played) Utilization % Occupancy Target
$200+ 1 100% 16.67%
$100 1.5 100% 25.00%
$50 2 100% 33.33%
$25 3 100% 50.00%
$15 4 100% 66.67%
$10 5 100% 83.33%
$5 5.5 100% 91.66%

Smaller casinos with little or no high limit play can adjust the numbers accordingly.

The next graph is a sample of comparing occupancy and utilization based on the goals and targets above.

Occupancy & Utilization by Game by Table Minimum
Game: Blackjack
Limit Open Tables Reserved Games Available Positions Spots Played Occupancy Utilization
$200+ 3 1 12 1 8.33% 50%
$100 4 0 24 6 25.00% 100%
$50 6 0 36 12 33.33% 100%
$25 8 0 48 36 75.00% 150%
$15 12 0 72 60 83.33% 125%
$10 14 0 84 70 83.33% 100%
$5 16 0 96 88 91.67% 100%

Using this graph, management can determine the operating efficiency of the table games operation based on hard numbers. Reserved games for very high end customers should be removed from the equation to avoid skewing the numbers. Often, these tables will sit unoccupied for hours; however, one play can generate a large casino win and well worth the down time of the game.

Good common sense and professional assumptions are essential in making decisions to raise limits or try to move a player in an effort to balance the O & U. On a $50 minimum table, if there is a $100 bettor and a $50 bettor, by raising the limit in hopes the $50 bettor will move to another table ( in an effort to get out more hands to the $100 bettor) the $50 player may go out the door and you may lose a customer forever. Also, these players may be friends who travel together and you can lose them both.
Again, all the graphs and charts in the world should not take the place of smart operating decisions.

Another good chart to use is by Utilization and Occupancy by Game Type and by Pit. In evaluating blackjack games located in your high limit pit will almost always operate with lower occupancy but a higher utilization. Larger bets with more hands per hour equal higher profits per unit.


Occupancy & Utilization by Game by Pit by Table Minimum
Game: Blackjack Pit 1
Limit Open Tables Reserved Games Available Spots Spots Played Occupancy Utilization
$200+ 3 1 12 3 25.00% 150%
$100 4 2 12 6 50.00% 200%
$50 3 0 18 9 50.00% 150%

These charts are a good operating tool but are just that, a tool. Use them in conjunction with other reports to help make good, solid informed decisions.
Good Luck and Happy Gaming.

Date Posted: 22-Jun-2010

Bobby Liscio is a former high school teacher in North Jersey. He opened Caesars Atlantic City in May of 1979 spending 28 years in casino operations. The last 25 years were spent at the Sands Atlantic City at all levels including Casino Manager. He was responsible for 500+ employees in Table Games, Administration and Poker Operations. The last 3 years Bobby has been with Bally Technologies, employed as a Sr. Consultant and currently as Manager in their Professional Services Division. Bobby has completed consulting, training, and business assessment projects in the US, Macau, Singapore, South America, numerous Caribbean Casinos and Europe. Bobby's contact email is bliscio@ballytech.com

 
 
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