Robin Powell, Special to CDC Gaming Reports · May 22, 2020
The post-COVID-19 casino floor is going to operate very differently from the casino floor before the casino shutdown.
Many expected changes have been discussed in the media, with states and gaming regulators mandating an ever-increasing list of safety steps. Far less discussion centers on how casinos are going to be profitable in the new operating environment. For example, mandating that only every other Blackjack table can open, with three players to a table, may have merit from a safety perspective but is a recipe for financial disaster.
Blackjack games, however, are barely profitable at a $5 or $10 minimum when the tables are full, even in casinos that do not have a $15 per hour minimum wage. So, what is the solution to the conundrum of mandated fewer tables per square foot, processing fewer customers on those tables, and the need to spend more time cleaning and sanitizing everything the staff and players touch and breathe on?
Apart from all the health and safety changes, reconfiguring the casino floor game type is necessary. Current configurations of casino floors have a wide selection of games to appeal to the largest number of players in any particular market – similar to the strategy in deploying slot machines with multiple manufacturers and game types on the casino floor to catch the widest net possible. For the foreseeable future, that operating and marketing concept is obsolete.
The first step is to examine each game type and calculate from the last full month, or any longer period available, the revenue per table hour, or position. The result will show which game type produces the most revenue for the amount of fixed and variable costs, the largest of which is the labor component. This number has nothing to do with the theoretical hold or hold percentage of a particular game type. It results from a combination of other factors, the mechanics of the game, decisions per hour, and the kind of players that play those games.
Obtaining the data can be done in several ways. Properties using a Casino Management System – CMS – to open and close tables, will have the exact number of hours each particular table is open during any period. That number directly translates to the labor cost for each game type, and the resulting factor for all the tables in a specific game type will show how efficient each game type unit is compared to other game type units. For casinos that do not use a CMS to manage the tables, a straightforward measurement is to take the number of open tables every shift by each game type and divide that into the total revenue.
Any casino that has poker will find that it will earn the least revenue per table because the games are raked and not banked by the house. Games such as Pai Gow Poker, where 50% of the hands are tied, casino games that require a decision by each player, and are therefore slow, and low limit Blackjack also may be less efficient on a revenue per game type basis.
The most efficient game type on the casino floor is likely to be baccarat, notwithstanding its lower than average theoretical hold percentage. Baccarat has unique features – all the players bet on common cards, a maximum of only six cards is needed to complete a betting round, and the one “alpha player” at the table tends to trigger the rest of the betting before the cards are dealt.
Eliminating the optional procedure of the “squeeze” or “face down” method of dealing with the baccarat cards, where players get to touch the cards before they are revealed, considerably increases the speed of baccarat. Furthermore, using a no commission version of baccarat, will significantly enhance the speed and reduce table errors, as it is simpler to deal and eliminates calculating commission on every Bank winning hand. Moreover, all games where players need to touch the cards, such as poker, Pai Gow poker, Pai Gow tiles are problematic because of the related sanitizing of equipment issues.
To take advantage of the need for more baccarat tables to handle the same number of players, a casino can easily convert existing equipment such as poker tables and “BJ style tables” to baccarat tables with new layouts. They can use existing surveillance cameras, power outlets, computers, and other hardware. This quick conversion only requires an inexpensive new layout. An equipment vendor can provide the associated equipment such as results displays, smart shoes, and shuffle machines if the casino so desires.
The post-COVID-19 casino is going to have to offer fewer game options to players if it is going to have any chance of making a profit. It makes sense to eliminate all the “nice to have” games attracting a wide selection of players and focus on the game type that can deliver the maximum revenue per table and operate it safely – baccarat.
Robin Powell is a Las Vegas-based gaming consultant with experience in casino operations, gaming property asset management, and table game operations. He is the co-creator of EZ Baccarat.