Posts Tagged ‘Las Vegas’

Blackjack No Longer King of Vegas

Thursday, March 17th, 2011

For years, seemingly forever, blackjack has been known as king of the casinos. While slot machines were the most popular game overall, due in part to the sheer number of games, blackjack was always the biggest table game. All of that is changing, though. Last year, for the first time blackjack was passed by another table game for Las Vegas revenue.

Last year, baccarat brought in $1.2 billion of revenue for Nevada casinos, making it the first time that blackjack had been outgained by another table game. The trend doesn’t seem likely to reverse anytime soon, either. Baccarat brought in $279.9 million more in revenue than during Las Vegas’s peak in 2007. Meanwhile, blackjack revenue declined by 31% during that same time period. This is despite the fact that blackjack is found at virtually every Nevada casino, while baccarat is only at a small number of resorts. In the last decade, casinos have added 149 baccarat tables, while blackjack tables have decreased by 815.

Experts think they know the reason for this change. Blackjack and baccarat attract different types of players. Blackjack is a mass-market game that is popular with mid-rollers. These are middle-class people who want more strategy and higher stakes than penny slots but don’t want to get into high stakes games. Certainly there are high-stakes blackjack games, but most blackjack players wager around the middle of the spectrum. That adds to the mass appeal of the game.

Baccarat, however, is more of a niche game that is favored by upper-class high rollers, especially Chinese players. Those players like the exclusivity of the game and its high stakes. People who have enough money to play high-stake games of baccarat are not as affected by the recession as players of mid-level games like blackjack.

When the recession hit, people had less disposable income because they had less overall income or feared losing income (such as by losing their job). That hurt the main crowd of blackjack: tourists who have enough money to enter a casino and play some table games, but not enough to throw down big money. The high rollers, however, still have plenty of disposable income, despite the recession, and are therefore still able to play baccarat. As the recession continues, this trend will likely continue. If the economy improves, the game of choice may shift back to blackjack.

Colorado Allowed to Have 6:5 Blackjack Tables

Friday, February 19th, 2010

Hurting for cash, Colorado casinos petitioned the Colorado Limited Gaming Control Commission for a rule change that would tilt the game’s odds more in their favor. Their idea was to make more money by paying out 6:5 for a natural blackjack rather than the standard 3:2. Changing the payout required approval from the Commission, though, since the state already has strict rules about the payouts in place.

Yesterday, the Commission approved the rule change, allowing the casinos to pay blackjack players at a 6-to-5 ratio for a blackjack. To get an idea of how this would change things, consider a $10 bet. With the standard 3:2 odds, a player wins $15 on that bet if they have a blackjack. With the 6:5 odds, though, they only make $12. Played out over the long term, that is a large difference in money.

Many casinos have started using 6:5 payouts for single-deck games. Players like the odds of single-deck games and the lower blackjack payout evens things out. However, this rule change in Colorado does not say that the 6:5 tables have to be single-deck games. It is likely that the casinos will only make some of their tables 6:5 games, but in theory they could lower the payout for every table and keep them all multi-deck tables.

I understand that the economy is rough and people need to make money, but this move could backfire for the Colorado casinos. As I reported earlier this week, blackjack revenue has dropped in Las Vegas, in part due to a tightening of the rules and lowered payouts. Many players will avoid playing at the 6:5 blackjack tables, and I can’t blame them. I would never play at those tables myself. Vegas found that trying to squeeze more money out of players has actually resulted in making less money. Colorado should take note.

Blackjack Revenue Dropping in Vegas

Wednesday, February 17th, 2010

When you think of gambling on the Vegas Strip, you think of blackjack. The game of blackjack has always been the most popular casino table game and for many is the first thing you think of when you think of Vegas. However, revenue from blackjack has taken a hit recently, and it’s not the money maker that it has been in the past.

In 2009, the amount of money won by casinos in blackjack dropped by 20% and the amount wagered on the game fell to its lowest amount ($8.917 billion) since 2003. In 2009, money made from blackjack made up just 9.7% of all casino revenue, which is the first time in history that it has been below 10%. In addition, the hold percentage, which is the percentage of money won compared to money wagered, fell to 11.3%, also the lowest in the history of Las Vegas.

So what happened? Well, the most obvious reason for revenue being down is the recession. Tourism in general is down, including visits to Vegas. Fewer people visiting Vegas means fewer people gambling at casinos. However, that doesn’t explain why blackjack is making up a smaller percentage of casino revenue.

The reason for that, according to some experts, is that casinos have shot themselves in the foot. In a quest to make more money, many casinos have tightened the rules on their blackjack games, putting in place stricter rules on splitting and doubling, having the dealer hit a soft 17, and in some cases making a natural blackjack pay out 6:5 rather than 3:2. In addition to tilting the odds more in favor of the house, many casinos have raised the minimum wager requirements and gotten rid of the $1 tables and in some cases even the $5 tables.

But how would that cause the casino to make less money? Well, getting rid of the low-limit tables has caused some of the inexperienced gamblers to stay away from blackjack and play other games instead. Newer gamblers want games with lower limits because they seem like lower risks. Those same players are more likely to play with bad strategy, which gives the house better odds of winning. Eliminating those bad players means a larger percentage of the people playing blackjack do play proper basic strategy, which lowers the house edge.

In addition, the tightening of the rules has caused some of the high-end players to play different games instead. One of the biggest beneficiaries of that is baccarat, which has seen an increase in popularity at the same time that blackjack has had a down tick.

So what does this all mean? Getting greedy can end up costing you money. That is true for players and it is true for casinos as well. It’s worth remembering, especially during tough economic times.

Mr. President, there’s nothing wrong with visiting Vegas

Wednesday, February 3rd, 2010

For the second time, President Barack Obama has criticized the city of Las Vegas and people who want to visit the city and contribute to its economy. This time, the president said that people saving money for college shouldn’t blow their money on gambling in Vegas. After a firestorm from local politicians and businesses, Obama sent a letter to U.S. Senate Majority Leader Harry Reid, who represents Nevada, saying that his comment was taken out of context.

This wasn’t the first time that the president has accused people of wasting their money by going to Sin City. Last February, he chastised companies who took bail-out money for taking trips to Vegas. Not being a businessman, of course, Obama doesn’t seem to realize that companies need to spend money to make money and that expensive junkets and other business trips are necessary for getting new clients and keeping old ones. He also doesn’t seem to grasp that in a struggling economy, you should never tell people not to spend money. Telling people to basically put their money under their mattress is bad for the country’s economy and especially for the economy of Las Vegas.

While the country-wide unemployment rate is 10% (which is a kind estimate that doesn’t count those with part-time jobs or those who have given up looking for work), the rate in Nevada is 13%. Las Vegas’ tourism industry is hurting because people are saving their money and not going on vacations to Sin City. Now the President of the United States is flat-out telling people not to spend their money there.

Here’s my take on visiting Vegas. It’s not for everyone. It never has been. You need a certain amount of disposable income to hit the casinos and play at the blackjack tables. I always tell people that when it comes to gambling, you should never wager money that you can’t afford to lose. Therefore, if losing an amount of money in Vegas would cause a hardship for you, don’t bet that money, because if you do, you might lose it.

However, if you have enough disposable income to do so, there is nothing wrong with going to the casinos and spending your money. Not only that, but it’s a good thing for the economy – not only Nevada’s economy, but the whole country. Consumers spending money (wisely) is an important part of capitalism. Of course you shouldn’t gamble money that you set aside for college. However, if you can afford to go on vacation and spend a little money, why not do it at Vegas? Doing so is not only fun, but it helps a state that is in dire straits.