Maybe you've had a good night or two at the casino sometime in the past decade, but it's the house that has hit the jackpot. Visitors gambled and lost more than $27 billion at U.S. casinos in 2003, up from about $11 billion in 1993 - not that the casinos are passing much of that growth on to consumers. While the odds always favor the house, some casinos are changing the odds and payouts on table games to be even more in their favor.
Take blackjack. Instead of the traditional 3-to-2 payout - which means a player betting $20 would get $30 - some casinos are now paying 6-to-5, effectively reducing the payout by 20%. And almost every casino now uses multiple decks, stacking as many as eight in a single sleeve, which makes it harder for gamblers to keep track of which cards have been played.
In perhaps the most significant shift, an increasing number of casinos don't allow the dealer to hold on "soft 17," the term for a 17-point hand that includes an ace. Continuing the hand improves the house's odds by about 0.2%. It doesn't sound like much, but on a table that sees $100,000 in wagers on a given day, that adds $200 to the house's take.
"Comp" cards have become increasingly popular at casinos in Las Vegas and elsewhere. They work like frequent-flier miles, offering customers a chance to earn free lodging, food and other extras each time they spend money at the casino. For casinos, the cards are a valuable tool in building brand loyalty, says Gary Loveman, chairman and CEO of Harrah's Entertainment.
But the spending bar is usually high for most of the "rewards," and since the games favor the house, odds are a gambler will lose money while racking up points. Catherine Cozzolino signed up for the Tropicana casino's Diamond Club card in October 2003. She earned enough reward points for a free room on her next trip, but it took spending (and losing) $500 to do it. On a recent visit to Vegas, SmartMoney signed up for an MGM Mirage Players Club card. After 90 minutes on a Treasure Island casino 5-cent slot, we had enough points for a free T-shirt, but we spent $85 in the process.
Bottom line: Don't rack up points solely with the goal of getting freebies. There is, though, one way to get something for nothing. Many of the loyalty cards offer discounts on lodging and food just for signing up.
While ATM fees are creeping up everywhere these days, perhaps nowhere are they higher than at casinos, where access to cash is king. Patrice Traina found that out the hard way three years ago when she was short on cash at the Paris Las Vegas casino. One of the casino's ATMs charged her $7.50 in fees to withdraw less than $500. "It killed me [to pay the fees]," says the Chicago auditor. At Atlantic City, N.J., casinos, many cash machines charge a $3 flat fee on money withdrawn from a checking or savings account, more than double what an average ATM charges non-account holders. It's roughly the same at Vegas casinos. If you want to use a credit card for a cash advance, the fees are even higher. Some machines charge a $2.95 fee and 3.5% of the amount withdrawn. Others charge a flat fee - $29 on any withdrawal between $401 and $500, for example. That's anywhere from a 5.8 to 7.2% tax on your withdrawal - on top of any interest your credit card might charge.
How to avoid the fees? Obviously, try to fuel up before entering the casino. Or do what Traina now does and bring your checkbook: Many casinos cash personal checks for free.
Taking a cue from retailers, casinos often circulate oils and scents into their ventilation systems to try to put gamblers in a good mood. In 1991, the Mirage Hotel and Casino in Las Vegas started circulating the smell of coconut butter on its property to match the casino's tropical resort theme. At 500,000 square feet, the gaming/hotel section of the Mohegan Sun complex in Uncasville, Conn., is the largest scented building in the world. It has more than a dozen different smells circulating within its walls, says Mark Peltier, cofounder of AromaSys, the firm that installed the system. The Venetian casino in Las Vegas, also an AromaSys client, circulates an array of herbal scents, including lavender, throughout the casino floor.
Why the olfactory overload? It's generally believed that people will stay longer - and therefore spend more - in a place with a pleasant smell, says Peltier. Lavender aromas, in particular, have been clinically proven to induce drowsiness and promote relaxation, says Wendell Combest, a professor at the Shenandoah University School of Pharmacy. The scents have no known harmful side effects, but be aware that it might be more than just the free drinks making you feel so happy-go-lucky.
Casinos often advertise that their slot machines pay out a very high percentage of the money they take in; 95% payback is a common claim. But the numbers can be misleading. Advertising 95% doesn't mean all the casino's slot machines are paying out at that level. It is true that each slot is programmed to return a percentage of the money players feed into it - anywhere from 83% to 99% over a long period of time, says Jeffrey Compton, a gaming analyst at Compton Dancer Consulting - but not all pay out the same percentage. So at any given point, some machines pay out nothing while others pay out much of their take. To arrive at the 95% figure, casino management simply limits the scope of their claim to a subset of slot machines that will deliver a 95% payout.
State gambling regulators will punish any casino they discover advertising a particular payback on its slot machines and returning less. But again, the regulators are looking at a very long time horizon. So don't be fooled by the casino's marketing efforts. If you feed $100 into a slot machine on any given day, there is no guarantee that you will get $95 back.
Think you're saving money by playing the penny slots? Think again. Slots and video poker machines with lower denominations have lower payouts than their more expensive cousins. The reason? The house takes in a lot more money on higher-value machines and wants to drive customers to them, says Rick Santoro, senior vice president at Trump Hotel Casino Resorts.
The Argosy Casino in Lawrenceberg, Ind., is typical of many in the U.S. In November 2004, for example, Argosy kept just over 11% of the $23.5 million that customers wagered at its 232 penny machines. But at its 97 $5 machines, Argosy kept less than 3% of the $57.5 million that was wagered, paying out the balance in both cases. So customers, on average, got a much better payout percentage at the $5 machines than they did at penny machines.
Players can increase the payouts on a penny or nickel machine by increasing the amount they gamble on each individual bet. Wagering 100 nickels, $5 worth, on each pull of a nickel slot can make newer machines pay more like a $5 slot. That's because the payout is based on the amount of money that is being bet, not on how many times the machine is being used.
Tempting as it may be, don't try to use X-ray glasses, electronic devices or other gadgets to give yourself an edge on the casino floor. That type of cheating can get a player thrown in jail.
But you are perfectly entitled to keep track of how many aces are left in a six-deck blackjack game by using just your brain. If you're good at it, you're a casino's nightmare. Nowhere in the United States can a casino have someone arrested for counting cards in his head. "There's nothing against using what God gave you to make you a better gambler," says Cory Aronovitz, founder of the Casino Law Group.
Still, the fact that a casino can't have you arrested for counting cards doesn't mean it can't make things extremely uncomfortable for you. Casino employees have been known to change the rules in the middle of a blackjack game or even spill drinks on players to deter card counters, according to I. Nelson Rose, a gambling law expert at Whittier Law School in Costa Mesa, Calif. In some states, casinos can also ask a guest to leave for any - or no - reason. If you refuse, they can have you arrested for loitering.
At many casinos, employees can legally detain anyone if they have probable cause to suspect a player is cheating or causing a disturbance. If the police get involved, the law often takes the casino's side, say lawyers and civil rights advocates, even if it appears the casino has overstepped its rights.
In October 2002, Raymond Cagno was having a field day playing blackjack at Las Vegas's El Cortez casino. The dealer was inadvertently showing both her cards (only one of the dealer's cards should be visible), increasing the odds of winning at her table. When casino personnel noticed the error, they asked Cagno to stop playing. It is not illegal to profit from a dealer's mistake, but when Cagno got up to leave, the security guards grabbed him, handcuffed him and took him to a security holding office. After some heated back and forth between Cagno and the guards, police were called. The officers arrested Cagno for disorderly conduct based, they said, on a complaint from an El Cortez security guard.
Cagno was convicted, even though the security guard said during the trial that she had been told to file the complaint by the police. Cagno appealed, and the conviction was overturned.
From backroom speakeasies to Bugsy Siegel, gambling has often been connected to the mob. Even today, when most casinos are run by corporations, the business has a lingering reputation for attracting shady characters, and sometimes it's not hard to see why.
Consider what happened in Rosemont, Ill. In 2001 state gambling regulators stopped Emerald Casino from opening a riverboat casino in the Chicago suburb, claiming that some of the contractors being used to build the facilities were affiliated with organized crime. Worse, the board alleged that two friends of Rosemont's mayor who became minority shareholders also had mob ties. The mayor denies any organized-crime connections, but Emerald's gaming license was revoked, and the firm went into bankruptcy.
In 2004, when the license came up for auction, the political appointees on the gaming board once again awarded it to a company planning to open a casino in Rosemont, despite objections from the board's professional staff. Wary of the mayor's alleged connections, it had recommended the license not go to any Rosemont project. Illinois's attorney general, Lisa Madigan, said the board had taken a "mystifying detour" in arriving at its decision.
Casino executives and groups donated more than $10 million to federal political candidates and parties in the 2004 election cycle, according to the Center for Responsive Politics. That's in addition to millions more contributed to state and local politicians who have gambling issues in front of them.
In Pennsylvania, the relationship is even cozier. When the state legislature passed a law last year legalizing slot machines in Pennsylvania, it included a clause allowing the state's lawmakers to own up to 1% of any company with a casino license - everything from a casino to a slot machine manufacturer. The ruling's many critics say it creates a conflict of interest for politicians, who may be tempted to act in their own financial interest instead of their constituents' on gaming issues.
Even more controversial, the law mandated that the casinos buy their slot machines from in-state suppliers, not directly from the slot makers. As a result, casinos are required to deal with a limited number of vendors and may feel pressure to use a supplier in which a local politician has an interest in order to curry political favor.This kind of ownership rule was "unheard of" before, says casino lawyer Aronovitz.
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