False Drop and Hold
| The phenomenon of False Drop on casino table games and its impact upon the measurement of casino performance. By Andrew MacDonald Senior Executive Casino Operations, Adelaide Casino, 1996 |
Casino Analyser Reference Hold Percentage |
Introduction | What is Drop? | Hold | Conclusion |
Table game performance analysis is often measured using the ratio of the table’s win divided by its drop. This is known as the game’s hold, hold percentage, p.c. or “per”. Whatever it is called it is simply;
Hold % = Win/Drop x 100
This is a useful empirical tool in that it provides a gauge as to the “retention” level of a patron’s drop and to some degree is therefore a measurer of dealer efficiency and patron service.
What factors may impact on drop and a games hold percentage?
If hold is equal to win divided by drop and given that actual win will over time be a reflection of theoretical win then it could be argued that:-
Hold = Theoretical win / drop
Theoretical win = Turnover (handle) x game edge
Turnover = Average bet ($) x Time Played (hours) x Decisions per hour (game results/hour)
The game edge or house advantage is the inherent advantage which the Casino has a consequence of the game rules, payout schedules and game probabilities.
Thus:
| Hold = | average bet x time played x decisions/ hour x edge |
| drop |
Given this formula it is clear that a number of factors may affect the calculation of hold percentage.
These are:-
(i) Average bet to drop ratio
A change in this ratio will have an impact upon the calculation of hold percentage. For example, if the time played, decisions/hour, game edge and drop are held constant, then the hold from a player with a bet to drop ratio of 1 : 20 will be one quarter the hold from a player with a ratio of 1 : 5.
Thus:-
| Player A | Average Wager | = $5 |
| Drop | = $100 | |
| Ratio | = 1:20 | |
| Player B | Average Wager | = $20 |
| Drop | = $100 | |
| Ratio | = 1:5 | |
| Using Roulette as an example and letting time played and decisions per hour equal to one, | ||
| Hold A | = $5 x 1 x 1 x 2.7% / 100 | |
| = 0.00135 | ||
| Hold B | = $20 x 1 x 1 x 2.3% / 100 | |
| = 0.0054 | ||
Hold A / Hold B = 0.25 = 25 % This could be related to any change in player mix due to an external change in the Casino’s demographics or player base.
(ii) Time Played
As a significant determinant of hold, the amount of time a player remains at a game is relevant to almost every factor mentioned. Over a period of time, the Casino is guaranteed the percentage of turnover determined as the game edge. If a situation is created to entice players to remain at a table for as long as possible, whether it be through comfort elements, game configuration, denomination or rules, they are contributing to the hold percentage. Although the drop may remain the same if a player for example buys-in for $100, the more bets they make the more likely it is that they will lose a larger amount, and thus not only does win increase but so too does hold.
(iii) Decision rates (dealer skill)
An example demonstrates this factor. Seven players sit down at a Blackjack table each with $100.
| Number of players | 7 |
| Drop per player | $100 |
| Total drop | $700 |
| Bet per player per hand | $10 |
| Total bet per hand | $70 |
| House advantage per hand | 1.30% |
| Hands per hour | 85 |
| Win per hour | $77.35 |
| Hold per hour | 11.05% |
| Compare this to a situation with a less skilled dealer, dealing at a much slower pace. | |
| Hands per hour | 55 |
| Win per hour | $50.05 |
| Hold per hour | 7.15% |
(iv) Table Utilisation
The above calculation also applies in this instance. Although dealer skill is of lesser concern here, it will still have some impact. If eight players sit down to play Blackjack, one player at one table and the other seven at another, each with $100 to play, the hold per hour shows significant variation.
|
TABLE ONE
|
TABLE TWO
|
|
| Number of players |
1
|
7
|
| Drop per player |
$100
|
$100
|
| Total drop |
$100
|
$700
|
| Bet per player per hand |
$10
|
$10
|
| Total bet per hand |
$10
|
$70
|
| House advantage per hand |
1.30%
|
1.30%
|
| Hands per hour |
250
|
52
|
| Win per hour |
$32.50
|
$47.32
|
| Hold per hour |
32.50%
|
6.76%
|
It is not often not economically viable to keep tables open in order to maximise the hold per hour, considering that the bulk of todays Casino players fits into the lower end of the betting spectrum and could not sustain table on-costs. It should be understood however, that maximising dealer productivity (by forcing players to fill tables) will yield the highest revenue but the lowest hold percentage and may in some instances actually reduce overall profitability. While keeping in mind the need to cater for every type of player it is necessary to determine the best table mix from a Casino profitability viewpoint.
(v) Change in Player Skill
A significant determinant of hold is the house advantage or player skill level. The house advantage will affect win and ultimately the hold percentage. Obviously anytime the house advantage increases or decreases, the total win can be expected to follow if the other variables remain constant (see house advantage calculation above). For games where player skill level will not influence the house advantage such as Big and Small, Roulette, Big Wheel, French Boule and Two Up, this is obviously not applicable. However if the Casino were to change its Blackjack set-up from a four-deck to a one-deck shoe, the house advantage will decrease. Players who are aware of the advantage of playing under these conditions will make the most of it. Skilled players will avoid games where a high house advantage exists (and thus a high hold) and aim for games where the percentages are low, and where their own skill level can boost their chances of winning. Furthermore if players become more knowledgeable at Blackjack and thus make less misplays and double, split and hit more intelligently, then both the house edge and the game hold can be reduced further.
(vi) Change in mix of bets
The house advantage can vary within a game according to different bets. Taking Craps as an example, the house advantage can vary from a low of 0.6% for a pass-line bets with double odds up to around 10% to 16% on proposition bets. Therefore the “weighted edge” may vary considerably if changes in the mix of bets occurs. This factor also applies for games like Big and Small and to a lesser extent for Blackjack if side bets such as “Dollar Sevens” are on offer.
(vii) Procedural Changes
Management can increase or decrease hold through any policy which affects the total hands or time played. For example, assume that a Casino has decided to change their shuffling and dealing procedure such that each four deck shoe in Blackjack is manually shuffled after one round being dealt. If this were the case, the Casino would find that they will still receive the drop, albeit small, but that the total win will decrease markedly because the players will become disillusioned as a result of the games snail like pace. With the win decreasing and the drop remaining basically unchanged, in relation to the bet-to-drop ratio, the hold percentage will be extremely small. Just as frequent shuffling can affect hold, so too can increasing the shuffling time (for example lengthy shuffling procedures in the hope of deterring players from tracking cards). Both measures basically reduce productivity at a table and therefore inhibit turnover.
(viii) Player Comfort
The Casino and the player may not even be aware of some of the comfort elements affecting the amount of time spent at a game. A classic example is seating, which can affect hold percentage by either increasing or decreasing time played. It is possible for the Casino to hold 100% of the players money if he/she were to play long enough, but if the player is uncomfortable, there will be no doubt of their abandoning play, either to move around or leave. Anything the Casino does, even if unintentional, to decrease the playing time will decrease the total win without potentially affecting drop thereby decreasing the overall hold percentage.
Poor service may or may not affect hold, depending on the player. If a player does not care about anything but the cards being dealt, drink service for example may not be a priority. However for the majority, service is important. Poor service causes annoyance and as with seating discomfort, players may become disillusioned with the game. Management must also be aware of the Casino layout as a service element. It would be a disservice to force high limit players to mingle with lower limit players “sweating” over their $3 bets. Again, as our prime objective is to keep players for as long as possible, catering for the desires of particular groups is important, even if it means segregating them or providing special services.
The climatic conditions in the gaming area also influence a players length of stay. Too cold, and the player may become disillusioned with the game and move away in order to warm up. Heat may also cause a desire to move away, but perhaps also increase the desire to drink (alcohol) and subsequent disruptive, abnormal behaviour. This is an extreme example, but highlights the need for management to be very aware of some of the more “physical” determinants of hold. Factors such as the weather, day of the week, public holidays or publicity can influence short-term hold, both adversely and positively.
(ix) Change in mix of players
Any change in the type of players entering the Casino may also impact hold. This may be driven by a specific marketing campaign or a long term change to the socio-economic demographics of the area.
For example if a marketing campaign were to drive many first time Blackjack players into the facility, hold may increase as these “unskilled” players would play at a greater disadvantage than the norm.
As a second example, if a significant increase in migrant immigration occurred within the Casino’s catchment area, the change in demographics may have an impact upon table game hold especially if the new players have different gambling habits.
(x) The use of non negotiable or match play chips.
In Casinos which utilise non negotiable chips to cater to high-end junket play the effect this system will have on the estimation of hold percentage can be enormous. For example the game of Baccarat which might otherwise have a hold of 14% will then have a hold of around 2.5% as cash chips are continuously exchanged for more non-negotiable chip purchase vouchers which then add to drop as these are converted for more non-negotiable chips (and so on). Similarly match play chips may have an impact on hold, depending on how they are treated in a financial sense and how many are provided to the public for play.
Thus many factors may impact on hold, however most of these have been as a function of a change to theoretical win.
There need not be a direct correlation between the size of a players drop and the level of activity it ultimately produces. Therefore in a true sense, there is also no direct relationship between hold percentage and activity levels, even though it is usual to treat this figure as an appropriate measure given large volumes of play.
