The Ascent is The Motley Fool's new personal finance brand devoted to helping you live a richer life. The Sheer Sums of Money Lost at Casinos Every Day Will Shock You. Keep these figures in. Jun 18, 2012  Knowing that the whole casino industry makes around $40 billion a year is not enough to tell how much a specific casino makes in a day. However, roughly calculating, the University of Las Vegas came to a conclusion that an average income of a Las Vegas Strip Casino is about $630,000 a day. The average salary for a casino dealer is $15.66 per hour in Las Vegas, NV and $138 tips per day.

We have already put emphasis on the importance of understanding the basics of slot machines and have acquainted you with the most popular myths about them. In the previous articles, we have also provided hints that might be useful during your game session. Now, it is time to discuss another serious topic and help you determine how much time to spend playing a single slot machine and how to determine if it is a “loose” one.

As mentioned earlier, your bankroll is broken down into stakes. Here is an example. Presumably, your bankroll is equal to €200, while your stake amounts to €20. So, before you get started, you have to take out the stake first.

£/€/C$88

10 Free Spins

100% up to

$/£/€200

+ 200 Spins

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100% up to

$/£/€100

As soon as you finish reading, you will be quite familiar with the best slot machine strategies that ensure your utmost gaming experience and most of all, the profitability of your gaming session.

Loose Slot Test Technique

Have you ever heard of the so-called Loose Slot Test technique? If not, you better read the lines below carefully to avoid overspending at a slot machine that will probably not grant you a decent payout.

First of all, you have to think about the number of credits you want to play. This can be estimated by multiplying the number of activated paylines by the multiplier (the number of coins bet per spin on each active line). It is important to note that this is not a random number. On the contrary – the type of slot machine you have chosen plays a great role in determining the number of credits.

The next thing is to select the number of spins you would like to make. In most cases, players choose to play ten spins but this does not mean you cannot opt for another number. However, you have to stick to your chosen number.

The next step you have to take before you start spinning the reels is to set an amount you want to invest in playing your preferred slot game. The best way to determine the right amount is to multiply the number of credits by the number of spins.

Let's see what would happen in the following situation. You have an overall bankroll of 2,000 credits, want to bet 56 credits per round and intend to play 10 spins during a session. You, therefore, would wager 560 credits in total.

When the ten spins are over, you should have a total of 2,000 credits minus the 560 credits you wagered during the session. In other words, your credits should amount to 1,440 plus those you have won during the ten spins.

In order to determine your profits, you are supposed to calculate the difference between the aforementioned 1,440 credits and those that are in the machine, provided that you have generated some winnings during the ten spins, of course.

The number is divided by 56 and you get the number of spins you can perform.

Stay or Change the Machine?

Then, you have to set the number of spins and repeat the above-mentioned steps. If your credits reach the critical 1,440 or go down, you better cash out and finish your game session at this slot machine.

However, if you win a prize during the second “set” of spins, that means you can continue playing and this time, you are enabled to choose more than 10 rounds per betting session. It all depends on the credits you have earned. Repeat the steps above and cash out whenever the number of your credits reaches the critical level.

Let's give another example. If you have 2,450 credits after the second “set” of spins and you take out 1,440, you are enabled to wager the other 1,010, which makes 18 more spins. If you continue winning, then you must have found a loose slot machine. In this case, applying the Box technique is recommended, so whenever you decide to stop playing, you will be able to take home some winnings.

There is an easier way to determine whether a particular slot machine is worthy of playing, though. You can just play with a small amount of money and you have two options: you will either lose your money or you will start winning. Yet, the first technique is considered more effective by experienced players as it requires them to think of the winning strategy and decide when it is time to stop playing.

Thus, there is a chance to have only a few pennies left and to trigger a bonus game on the last spin. There is something like an unwritten law – always make your final spin with the total amount you have been playing.

Another thing worthy of emphasizing is that the amount you have to set aside to determine which slot machine is loose, depends greatly on the bankroll and most of all, on your stakes. Anyway, the amount of stakes is variable but the technique for playing with a fixed number of spins stays the same.

The easiest thing is to keep investing money into a slot machine that gives back insignificant wins on occasion but this is not going to be too profitable for you. That is why it is critically important to change the machines you are playing until you find a loose one.

It does not matter which one of the aforementioned strategies you use, you do have to move from one slot machine to another until you find the one that meets your requirements.

FAQs

It would be great, of course, to be able to predict if not a whooping jackpot, then a bigger payout or, at worst, arriving of a bonus feature. Perhaps absolutely possible in some dreamlike universe, in our real world is nothing more than just an unfulfilled desire.

Once and again, state-of-the-art RNG (Random Number Generator) is King and the only one to determine the outcome of every single spin.

Well, it is not an easy question, all the more so, a lot depends on your gambling style, preferences, and titles you want to put on test. Slots have higher volatility than the majority of card games or, even, video poker. Plus, gripping one-armed bandits are no stranger to pretty long losing streaks.

Taking into consideration all said above, maybe the best measure for a fruitful evening could be, let’s say, a bankroll that can cover at least your 200 bets. Again, there is no guarantee, you will get expected results.

Often called Play and Run, this special approach is quite popular among the punters. The main idea is to limit the length of sessions played at a certain slot machine. Time frames vary greatly, from a couple of minutes to whatever you can set as a limit to spend on the same seat.

The result? A lot of fuss and bother over nothing much. Plus, a pretty dubious fun.

While all existing betting systems can be roughly divided into two categories: positive and negative progression, none of them is 100% reliable. What’s more, when it comes to modern slots, such techniques is too hard to apply at all.

Generally speaking, the main difference between the positive and negative progression strategies lies in the moment of increasing stakes: after each win in the first case, and after each losing round using the second option respectively.

If we talk about money, negative series calls for a way past hefty bankroll, while a positive sequence requires less funds.

Quite on the contrary, it is one of the easiest methods to implement – all you need to do is double your bet after every losing spin, and stake one pre-decided base unit after every winning strike.

But here comes one downside: as a negative progression, this strategy insists on solid capital – even if you start spinning the reels with just $1, after seven unsuccessful hits you will have to wager $128, while your bankroll is already „lighter“ for $127.

Similarly, if you begin, let’s say, with $10, then after just five fruitless hits you will have to place a pretty impressive bet of $320. You do not have to be a math genius to figure out an obvious failure of this method.

The powers of casino stuff are seriously overestimated by too many punters used to tip slot personnel in order to get secret “instructions”.

Think twice before spending more money than you otherwise would just because you believe that casino staff knows that this particular machine is “due” to hit. If they knew, they would get rich and wouldn’t work there anymore, right?

Broadly speaking, classic titles usually have higher winning potential than their video counterparts.

Theoretically, one has better chances at a decent payout on classic 3-steppers than on video slots, since the latter have more frequent small hits intended to extend the gameplay. Again, in the long run, which means it is not necessary to be right for you.

It is a widespread belief, which is just one more myth in the gambling world, that floor managers place so-called loose slots in such a way these machines can be seen from many directions, by the biggest possible number of players.

No, it is not how casinos try to attract new visitors and keep loyal customers. Quality service, rewarding programs, various bonuses, and fair play – that’s how they do business.

Players that run between the rows struggling with coins and trying to keep track of eventual wins are seen pretty often throughout casino floors. Usually, they cause broad smiles on the faces of other visitors accompanied by a couple of sloppy comments.

If a strategy at all, it is far from being a worthy piece of advice to follow. After all, it is too far from the main idea of playing slots – to have fun!

The word “comp” is short for “complimentary.” In the gambling industry, comps are free stuff you get from casinos and other gambling companies to incentivize you to gamble with them. Generally, you get more comps based on how much you’re gambling.

When discussing comps, it helps to understand the expression “action.” Being “in action” just means that you have money riding on a bet of any kind.

But “action” also refers to the amount of money you have wagered. It can refer to the amount of money you wager over a period of time, too.

For example, if you’re playing slot machines and betting $1 every time you spin the reels, you’re putting $1 into action every time you spin. If you make 600 spins per hour, then you’ve put $600/hour into action.

Based on the odds behind the game and the payout odds, casinos can estimate the long-term expected losses based on your hourly action. They can then calculate a percentage of that to return to you in the form of comps.

When you’re dealing with traditional land casinos, if you bring much action to the casino at all, you’ll be assigned a casino host. This is the person at the casino responsible for keeping you happy so that you don’t take your action elsewhere. Comps are the main tool a host uses to keep you happy.

Of course, not everyone has a host. You can also get comps almost automatically by signing up for the players’ club and inserting the card into the machines as you play. Pit bosses also have the authority to reward you with comps when you’re playing table games. In fact, the simplest and most common type of comp is the free drink. As long as you look like you’re playing a slot machine, a cocktail waitress will bring you free drinks all night. (She’ll be more attentive if you tip her well, though.)

This post explains the different kinds of gambling comps and what they mean to you as a gambler.

The Different Kinds of Comps Available

Comps are awarded in a hierarchy based on your value to the casino. The most basic comp is the free drink. Casinos have multiple motivations for gving you free drinks.

For one thing, a gambler who’s inebriated has lower inhibitions. He’s more likely to gamble more money longer. And the #1 factor affecting how much profit a casino makes from a gambler is the amount of time he spends playing.

That’s because casino games have an innate mathematical edge. This edge doesn’t have a huge effect in the short term, because in the short term, anything can happen. But the law of large numbers suggests that the more bets you make, the closer your actual results become to the theoretical results.

Here’s an example:

The mathematical expectation at blackjack is for you to lose roughly 1% of each bet you make on average over time. (This assumes you’re using basic strategy while you play.) That means the casino expects you to lose an average of $1 every time you place a $100 bet.

In the short run, that’s impossible. If you place a single bet at blackjack—which is the ultimate example of the short term—it’s impossible to lose $1 on a single $100 bet. You’ll lose $100, win $100, or win $150 most of the time. If you double down or split, you might win more–$200, $300, or even $400 wins are possible. You might also face a “push,” which is a tie. Your bet is returned, but you don’t win any money… that’s a loss or win of $0.

None of those outcomes come even close to a loss of $1.

That $1 loss is an average over time–over a huge number of bets. If you make 10,000 bets at $100 each, you’re likely to lose close to $10,000. Even with that many bets, it’s possible to deviate wildly from the mathematical expectation.

If you’re the casino, you want to get into the large number range as soon and as often as possible. This ensures your profit. The way to do this is to get players to make lots of bets for lots of money.

And providing free alcohol helps with that. In fact, it’s a small price to pay for the extra action they see.

You can expect more than just free drinks, though. Free food is a small step up from free drinks. At a casino of any respectable size, you’ll find multiple restaurants on site. The 2^nd most common type of comp is free food at one of the on-site restaurants.

The free food comp is usually awarded in the form of a coupon. You might have to put more money into action than you think to be awarded free food, but it sometimes depends on the generosity of the pit boss. It can also depend on what kind of rapport you have with the casino staff.

I once got into a spirited conversation with the cardroom manager at Planet Hollywood Casino in Las Vegas. They had a hot dog joint there called Pinks—I guess it’s popular on the West Coast. Anyway, I was trying to convince the cardroom manager that he should buy everyone at the table hot dogs.

Apparently, at the limits I play, you don’t get free hot dogs.

If you qualify for free food and free drinks, you’re not far from qualifying for free lodging, too. Most casinos are also hotels, but even casinos which don’t have attached hotels will get you lodging nearby—if you’re gambling enough.

You can also get upgraded to a nicer room by virtue of the action you bring the casino. (You might also be able to get upgraded to a suite or a nicer room by tipping the desk person $20 when you check in, but that’s not really related to comps.)

In fact, these 3 comps—room, food, and beverage—are so common that they have an abbreviation for it. Bettors who qualify for all 3 are called “RFB” customers.

Notice something about all these comps, too. You’re getting comps that seem to have a certain value. A drink is probably $5 at the bar at a casino. A meal is usually $15 or $20. A room can vary wildly in price, but is often at least $50, $100, or more.

But those are the retail prices for these comps. The casino doesn’t pay $5 when they mix you a drink. Their cost for that shot of Crown on the rocks is probably closer to $1. The meal at the buffet that the public pays $15 for probably only cost the restaurant $5 to make.

And a hotel room that’s sitting empty generates no money for the casino at all, so they might as well give it away. In fact, the Winstar in Oklahoma has such low occupancy rates during the week that almost anybody can get a comped room. You don’t have to bring them much action at all, really.

Those are just the standard comps for regular down-to-earth players like you and me. High rollers, or “whales,” as the industry calls them, are eligible for all kinds of free stuff. Many of these comps are customized based on what the host knows about the gambler’s interests.

It’s not unusual for a casino to pay for airfare and transportation to and from the airport for a big player. In fact, that’s expected for any high roller.

But entertainment is another popular comp. If you like golf, shows, or sporting events, you can usually get a “free” ride from the casino to go to those outings, too.

Rebates are common, too, even if you’re not a high roller. For low rollers, rebates are often awarded in the form of coupons or free play. High rollers can receive cash or a check as part of their rebate.

The comps program is part of the casino’s marketing plan. Most casinos make heavy use of direct mail to entice gamblers to return to their casino and play. If you’re a member of the players’ club at the casino, you’ll inevitably receive standard comps in the mail.

Based on your interests and betting tendencies, you’ll also get free offers for other perks in the mail, too.

Even low rollers can get free transport to and from the casino. I see buses taking groups of gamblers to the Winstar all the time. Many of the people riding those buses pay nothing for the ride, although they lose enough money at the casino to more than make up for that cost.

But calling these comps “free” is inaccurate. You pay for these comps in the form of gambling losses, even when you’re winning.

How Gambling Companies Do the Math That Makes Their Comps Program Profitable

Other than the free drinks and occasional free coupons sent in the mail, most casinos award comps based on your actual time spent playing. They account for how many bets per hour you make and at what amount when deciding how much to award you and when.

But comps aren’t based on how much you actually lose. Instead, casinos calculate your comps based on your theoretical expected loss. This is a function of the house edge for the games you’re playing, the time you spend playing, and how many bets per hour you’re making.

Over the long run—and casinos serve thousands of customers per day—the casino has an excellent idea of how much your play is worth. If you’re on a winning streak, you still get comps based on your action. The calculations are based on your expected losses, not your actual losses.

Here’s how the casino calculates this:

You play slots exclusively, but you bet $3 per spin. You’re an average player, so you’re making 600 spins per hour. That’s $1800 per hour you’re putting into action.

If the casino knows you like the machines with a 95% payback percentage, they figure that in the long run they’re going to make 5% of your hourly action—or $90 per hour. (5% of $1800 is $90.)

If you spend an average of 4 hours a day playing slots, the casino assumes you’re going to lose $360 a day while you’re there.

They then award you comps based on a percentage of that $360 per day.

How Can You Best Take Advantage of the Casinos’ Comps Programs?

If you’ve heard of the books The Frugal Gambler by Jean Scott or Comp City by Max Rubin, you probably already know a little bit about becoming a “comp hustler” or “comp wizard.” These are players who learn to maximize the amount of comps they receive in exchange for their action.

One way to maximize the comps you get for the money you lose is to play a game with a tiny house edge. If you can play blackjack with perfect basic strategy, you can get the edge in the game down to 0.5%. The average player loses about 4% at blackjack, because the average player doesn’t know perfect basic strategy.

When the casinos calculate your expected loss at the blackjack table, they assume you’re an average player losing 3% or 4%. Since you’re only expected to lose 0.5%, you’re getting comps based on a theoretical loss that’s actually overstated by a factor of between 5 and 10.

Another way to maximize the comps you get is to bet big when you’re being rated by the dealer and the pit boss. “Rating” players is how they estimate your hourly action. Fooling the pit boss is harder than you think.

I was playing blackjack in Kansas City for between $10 and $100 per hand, depending on the count. They rated me as a $10/hand player, even though I was betting more than that on a lot of hands. I complained, but I’m sure they realized I was counting. The last thing they were going to do is rate me higher when they knew I was counting cards.

(I was also a little drunk, so I didn’t notice immediately when they started shuffling the deck after every hand. Counting cards does you no good if the dealers shuffle after every hand.)

Taking lots of breaks can result in fewer hands per hour than the casino estimates, which reduces your expected hourly loss by a lot. If you’re at a blackjack table dealing 60 hands per hour, you could realistically only play 45 hands per hour by taking frequent bathroom breaks.

What effect does that have on your expected hourly loss?

It reduces it by another 25% or so. Instead of losing $10/hour, you might only be losing $7.50/hour. The casino might be estimating that you’ll be losing an average of $40/hour and base your comps on that.

Expert video poker play can also result in smaller expected losses per hour. In fact, with certain video poker games, the combinations of comps with the tiny house edge can result in an overall positive expected value for the player. That’s an advantage gambling technique, but it’s not one you can realistically make a living at. The edge is too small, and games with those pay tables are usually only available for small stakes. You’d be lucky to make minimum wage playing video poker for comps.

How much of your expected losses can you expect back in comps?

It varies, but the casino calculates that they can afford to give you back 40% of your expected loss in the form of comps. You’ll more often see 20% through the players’ program if you’re a low roller, but you can even increase that amount by taking advantage of coupons and “happy hour” type promotions where you get 2X or 3X your standard comp rate.

How Do Online Casino Bonuses Work? Isn’t That Another Form of Comp?

Online casinos can’t serve you drinks or free food. They can’t really provide you with a free room for the night, either. And since you’re playing from home, they’re unlikely to offer you free show tickets, either.

Instead, online casinos offer you sign up bonuses and ongoing deposit bonuses. These amount to free amounts of money awarded to your account just for making a deposit—either as a new player or as an existing player.

Bonus hustlers used to take advantage of these offers to generate almost guaranteed profits. A friend of mine once bought a jukebox by taking advantage of casino bonuses at a dozen different casinos and cashing out his winnings.

Online casinos have responded to this by instituting wagering requirements that make it almost mathematically impossible to come out ahead when taking advantage of a bonus. They also watch player behavior closely, and if that behavior resembles that of known bonus hustlers, the casino might refuse to pay you based on “bonus abuse.”

The concept of wagering requirement seems more complicated than it is. Here’s how it works:

You sign up at a casino that offers you a 200% matching bonus on your first deposit of $1000. You deposit $1000, input your bonus code, and the casino adds $2000 to your balance.

You now have $3000 to play with.

But the casino requires you to wager this amount 35 times before cashing out. They also restrict your play to slot machines. You can play blackjack, too, but only 10% of your blackjack wagers count toward fulfilling your wagering requirements.

And you can’t cash out before fulfilling these wagering requirements.

Let’s assume you want to play the slots. A good ballpark estimate for the house edge on a slot machine game is 6%, but who knows? (The casino does, but you don’t.)

To wager $3000 35 times means you must put $105,000 into action.

The expected loss on that much action is 6% multiplied by $105,000, which is $6300.

Since you started with $3000, the mathematical expectation is for you to go broke before fulfilling your wagering requirements.

On the other hand, if you play blackjack, the house edge is only 0.5%. But since the casino only counts 10% of those wagers toward your wagering requirements, you need to make $1,050,000 in wagers before cashing out.

0.5% of $1,050,000 is still over $5000.

Again, that’s more than your starting bankroll, so it’s unlikely that you’ll have money left over after fulfilling your wagering requirement.

You can, of course, get lucky and win more than you’re expected to. I claimed a bonus at an online casino once for $1000, and I hit a $6000 jackpot on my 5^th spin of the reels on a slot machine game.

I was able to fulfill my wagering requirements and still have $2000 in profits.

But that’s because I got lucky—not because I took advantage of a mathematical edge given me by the bonus.

In fact, had I eschewed the signup bonus, I could have cashed out the entire $6000. I wouldn’t have been required to finish fulfilling the wagering requirements.

Conclusion

Casino and gambling comps are really cool, but they’re also a tool that casinos use to get you to lose more money than you’d otherwise lose. Understanding how those comps work is the first step in making sure you don’t get taken advantage of.

Some people learn how to take advantage of the comps system in such a way that they gamble practically for free. It’s even theoretically possible to come out ahead because of the comps program. That’s too much work for most people, but it’s nice to know that it’s possible.

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The bottom line about comps is that the casino doesn’t have your best interest at heart. They want your money.

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