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Theo Theories

Comping is a complicated formula, but let's see if we can make it much simpler.

Theo Theories

How do I comp thee? Let me count the ways.

Because there are many—so many, too many.

But maybe there’s room for one more.

Casinos routinely rebate a percentage of your losses—your theo (theoretical) losses, anyway—through the ancient art and science known as comping. This, of course, leads to three questions: How does the casino know who I am? How does the casino know how much I bet? And who the #[email protected]% is Theo?

Turns out these answers are entangled and intertwined, like the spirals of a cobweb or the story lines of a Twilight Zone episode. Imagine, if you will, a slot player, and every time she sits down at 88 Fortunes or Buffalo Thunder, she inserts her casino card into the machine, thus answering Question One. Then, with said card in said slot slot, she makes $1,000 in bets, thus answering Question Two.

To answer me this Question Three—the Theo question—doesn’t take a lot of brain power, unless simple multiplication is a lot of brain power. Slot machines have mathematical advantages, the percentage of handle you should lose over time. Your theoretical loss is the amount you bet (aka, handle) by that advantage. For example, generating $1,000 in handle into a 10 percent advantage yields a theoretical loss of $100.

You then get a bit of that back via free food, free booze, free rooms, or free all of the above.

Easy, peasy, George and Weezy.

And it’s exactly the same with table games. Well, except for the part where it’s completely different. Slot machines are digital; they are built to collect and process data. Table games are analog; the data are there, but they’re harder to herd than a horde of Hodors.

Enter Floor Man. It is the job of the floor supervisor, the immediate boss of the dealer and immediate subordinate of the pit manager, to replicate those computerized calculations via good, old fashioned guesses and estimates. How does the floorman know who you are? He asks. How does he know how much you bet? He watches you play a few hands. How does he know how long you played? He looks at his watch.

When it comes to calculating comps, slots vs. tables, it’s Moneyball vs. Wiffleball, smart bombs vs. boomerangs, RAM and ROM vs. WAG.

Making an impossible job, uh—impossibler?—is the complexity of these newfangled table games. High Card Flush, Fortune Asia Poker, Ultimate Texas Hold ‘em, etc. may look simple, but mathematically, they are nothing short of diabolical. 

Take Three Card Poker. Please. Take lots and lots of them. You’ve got the Ante bet. You’ve got the Pair Plus. You’ve got the 6 Card Bonus. You’ve got the Two Way Bad Beat. You’ve got the progressive. And coming soon, you’ve got the Coverall bet that enables players to have action on every hand at the table.

And, if you’re the one trying to attain perfect ratings accuracy, you’ve got a headache big enough to take down a dinosaur. 

Fortunately, there’s something in business known as the Half Ass Axiom—or will be, if this column goes viral—which goes something like this: 50 percent effort yields 90 percent results. Traditional tables, barring an RFID or optical revolution, are never going to do what slots do when it comes to comping. Buy hey, you don’t need to pursue perfection when OK is OK.

So, how can casinos can fine-tune their comping methodology without driving themselves batty in the process? Simple. Have the floor supervisor consider each bet that’s made before the cards come out. That section of the ratings slip, when completed, would contain the following information:

To compute the player’s theoretical loss, the casino system would need to know the corresponding house advantages for each bet (table, below), as well as the overall hands per hour (assume 40):

In one hour of gambling, this player—imaginary though he may be—generated a theoretical loss of $108. Had the casino used the current practice of aggregating all bets and applying a blended house edge of, say, 5 percent, the system would have estimated his theo loss at $62.

Sixty-two instead of 108. In other words, or in this case other numbers, that’s an error rate of 43 percent. And if casinos are off by that much, they might as well kick Theo to the curb and issue comps based on actual losses.

The point is this: If accuracy matters when it comes to rating and rewarding specialty game players—and who knows, maybe to some it doesn’t—this methodology is infinitely better than what’s currently used. Now admittedly, breaking down the rating by bet type is more cumbersome and burdensome for front-line staff, but it will yield a result that better reflects a player’s theoretical loss, as well as his past and future value to the casino.

And if that’s not worthy of a half-ass effort, then what is?

Roger Snow is a senior vice president with Light & Wonder. The views and opinions expressed in this article are those of the author and do not necessarily reflect the views and opinions of Light & Wonder or its affiliates.

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