Player Loss

Introduction | What is the cost of rebating? | How large a value? | Unit Normal Linear Loss Integral | Baccarat (Player/ Bank 50% Equivalent) | Roulette (single number play on single zero Roulette) | Conclusion |

What use is all this information?

Many would argue that this is all too complicated to be of practical application in the Casino industry.

Firstly, it provides a mechanism by which any existing rebate on loss policy can be analysed to assess the long term or theoretical cost to the business.

Secondly, in the high level junket segment it provides a means by which variable percentage rebates on loss can be structured which can be both attractive and may be combined with rebates on turnover or the provision of other complimentaries. Being criteria based any policies so developed would possess a long term validity.

Thirdly, it provides a challenge to incorporate a rebate on loss element into the standard calculation of premium player complimentaries. One of the basic limitations of a theoretical loss based complimentary system is that while fine in theory the players often complain that no consideration is given should they incur a substantial loss. To any player, funds are a limiting factor which if depleted will limit the turnover they can provide which may also mean that what would normally be comped, to add insult to injury they may have to pay for. Some complimentary policies address this in a superficial way but again these are not criteria based.

To say that incorporating the above formula into a player rating system would not be practical because it could not be calculated or would not be understood by the player is incorrect. Most player rating systems in large Casinos are computerised which would certainly enable any calculation to be undertaken.

Secondly players already take most things on trust in terms of what complimentaries are provided. For example the decision rates per hour, house edges, average bet levels and percentage of theoretical loss returned are generally unknowns from the player’s perspective. Therefore if the objective is to find the most equitable system upon which to base complimentaries some aspect of player loss should be incorporated, and from a business perspective that should equate to a standard theoretical cost.

Structuring a program of this nature could be achieved by adding a rebate on theoretical loss to a percentage rebate on actual loss, providing either depending upon which is the greater of the two or relying solely on one or the other. Of course as in any player rating system success relies heavily on capturing good data initially. To do this it is imperative that the gaming staff performing this function realise its importance.

Finally if referring to UNLLI tables etc is still considered too complex then the following approximation of a rebate on loss percent calculation may be of use:-

where a = the percentage of theoretical loss equivalent
where b = the percentage of actual loss
where Y = theoretical loss to the player
where N = the number of hands played (turnover/maximum bet)
where V = the average squared result for one game

Acknowledgements:-

– Bill Eadington, Judy Cornelius and the staff at U.N.R.
– Peter Griffin : Professor of Mathematics C.S.U
– Jim Kilby : Professor of Gaming U.N.L.V.