Casino gaming properties and their patrons represent a prime example of how two parties whose business outcomes are at cross-purposes must establish an uneasy peace in order to maintain their mutual existence. The clinical term is co-dependence. Players need gaming and gaming needs players. Each side enters into this symbiotic relationship with the goal of one side trying to take the other side for all they are worth without going so far as ensuring mutual destruction. The primary bargaining chip at the center of this nature channel drama is what the industry calls a “comp.” A “comp” is short for “complimentary” which refers to something given as free as a courtesy or favor with the goal of “incentivizing” patrons to play longer, bet higher, and visit more often.
Even though everyone knows before stepping foot onto a casino property or logging onto a gaming site that sooner or later “the house always wins,” it doesn’t keep some or most of us from believing that on this day the prophecy has foretold that we are the long-awaited anointed ones that have been divinely chosen to bring down this house of ill repute. It is this attitude that drives this particular “circle of life” (or debt).
For the players it’s all about the comps. Casinos generally offer four levels of comps:
- The first level offers “free” cocktails and other beverages. Some casinos offer everything, while others are limited to simple “house” drinks.
- The second level typically consists of free meals. Many casinos have several restaurants and may require more play to earn a comp to the higher-end restaurants.
- The third level offers free hotel rooms. Many casinos have attached hotels, but those that don’t may have the ability to comp rooms to a hotel nearby.
- If you are fortunate to ascend to the fourth and final level, you are considered a high roller and you can expect premiums such as airfare reimbursement, limo rides, tickets to shows, private gaming areas, private jet service, and other mostly legal premiums.
Interestingly enough, high rollers are said to provide only a small fraction of casino “action.”1 According to John Eldsmoe in his book Legalized Gambling : Americas Bad Bet, he claims that it is actually gamblers from the lower and lower-middle classes in the United States that provide much of the gambling money. “The occasional wealthy ‘high roller’ does indeed exist, but he is the exception, not the standard. The fact that more than 50% of Nevada’s gambling income comes from slot machines as opposed to the card tables should be an indication high rollers are not the main source of revenue.”
Representing the other side of this constant tug-of-war is the gaming property. For them it’s all about “THEO,” short for “theoretical loss.” It is the amount of money a player is expected to lose based on the long-run statistical advantage the casino has on the particular game being played. Theoretical loss is calculated as follows: Theoretical Loss = (Casino Advantage) X (Total Wager). Casinos use this statistic to classify you as either a high roller (or “whale”) or a low roller.
The bet for whales typically starts around $50,000 and can go as high as their history says they can cover, while a low roller usually begins with low limit tables ($5) or slot machines.
A perfect example of how THEO works is provided by award-winning online city guide Vegas Tripping2: if you lose $1,000, you’ll get $400 worth of comps—two nights in a $200 per night room, or 50% off the room and two $100 show tickets, or one night free and $200 in resort credits, however they decide to slice and dice. The calculation is that the size of your future wagers will increase with the size of your comps. Think of it like the two-for-one coupons offered at your local grocery store except that instead of spending a few extra dollars on that second box of detergent that you don’t necessarily need, you risk hundreds of thousands of dollars that you don’t necessary have in hopes of at least a two-to-one payout.
So who do you think is left at the end of this week’s cheetah vs. antelope episode on The Discovery Channel? Is it the casino property whose job it is to provide you pleasure while also encouraging you to go outside of your reasonable betting comfort zone, or is it the player who believes that sometimes numbers do lie and that they have invented the perfect betting system that will allow them to go down in history as the “ONE” who beat the house? Or maybe the point is that no matter what the outcome, the system is setup so that everybody gets what they want—win, lose, or draw. What do you think?