HM 386 Exam 2- Chapters 2, 3, 5, 13
The player disadvantage on a pass line wager is expressed as:
-1.414%
Payout forms include coin-out, voucher-out, hand-paid jackpots, and progressive accruals.
-Coin-out and voucher-out refer to machine-issued payouts. -Hand-paid jackpots are issued by casino personnel. -Progressive accruals represent the dollar-amount of wagers diverted to the progressive jackpot meters, which display the dollar-amount of the progressive jackpots.
At the heart of Nevada's gaming tax structure is a percentage tax on gross gaming revenues. As of 2003, the nonrestricted gaming tax structure is as follows:
1. 3.5% of the first $50,000 of gross gaming revenue during each respective month 2. 4.5% of the next $84,000 of gross gaming revenue during each respective month 3. 6.75% of revenue exceeding $134,000 of gross gaming revenue for each respective month.
The NGC is a five-member lay body appointed by the Governor. Commissioners are part-time employees of the state. Each Commission member is appointed to a four-year term and must meet the following criteria:
1. A U.S. citizen and resident of Nevada 2. Not a member of the Nevada Legislature 3. Not a person holding any elective office in the state government, nor any officer or official of any political party. 4. Commission members must not be actively engaged in or have a direct pecuniary interest in gaming activities 5. Preferably no two Commissioners shall be of the same profession or major field of industry.
The Nevada GCB is a three-member lay body appointed by the Governor. Board members are full-time employees of the state. Each Board member is appointed to a four-year term and must meet the following criteria:
1. A U.S. citizen, and, or within six months of appointment, be a resident of Nevada 2. Not a member of the legislature 3. Not a person holding any elective office in the State Government, nor any officer or official of any political party.
The following points describes problematic situations that arise when a shooter quits before a seven-out.
1. A don't pass shooter who makes his point: Because he made the point, he would retain control of the dice. That is, he lost his bet, but did not seven-out. This shooter can't be forced to make another wager and continue to shoot until producing a seven-out. 2. A pass line shooter who makes his point and leaves the game: Lets say this shooter has made his point and won his pass line bet. Choosing not to place another wager, he leaves the game. According to etiquette, this shooter still controls the dice. 3. A pass line shooter who establishes a point, surrenders his bet, and leaves the game
The NGC primarily functions to:
1. Act on recommendations of the GCB in licensing matters and ruling over gaming employee registration appeal cases 2. Serve as the state's final authority to approve or deny the recommendations of the GCB on any license application 3. Adopt regulations for the gaming industry. These regulations effectuate law or policy or describe the procedures and guidelines of the NGC or GCB 4. Consider changes to public policies regarding gaming, including passing changes to the NGC regulations.
The GCB's staff is divided into seven dimensions:
1. Administration 2. Audit 3. Tax and License 4. Enforcement 5. Investigations 6. Corporate Securities 7. Technology
In Nevada it is unlawful for any person or entity to make available for play any form of gambling without first having applied for, and been granted, a license by the NGC. This includes, but not limited to, the following:
1. Any beneficial owner or legally designated manager of a privately held company (no matter how small the percentage of ownership) 2. Any institutional investor that owns 15% or more of a publicly traded corporate entity that holds a gaming license 3. Any person or entity that acts as a manufacturer or distributor of gaming devices 4. Any person or entity that acts as a slot route operator.
To ensure the continued economic viability of the industry, the NGC and GCB are guided by two primary objectives:
1. Ensuring that gaming is conducted honestly, competitively and free of criminal and corruptive elements 2. Ensuring accurate and timely taxes are paid to the state.
Roll
1. Includes all throws between pass line decisions. A roll could contain any number of throws. 2. Sometimes used in lieu of throw
Hand
1. Includes all throws from a shooter before she loses the dice to the next shooter. For example, given an established point, a pass line bettor would lose the dice after throwing a 7. A hand could be as brief as two throws or it could include multiple throws or rolls/decisions. For example, a shooter could make several points before losing the dice. 2. Hand is also sometimes referred to as a roll.
As of 1992, the NGC can only issue a nonrestricted license to a resort-hotel, which is defined as an establishment with the following amenities:
1. More than 200 rooms available for sleeping accommodations 2. At least one bar with permanent seating capacity for more than 30 patrons that serves alcoholic beverages sold by the drink for consumption on the premises 3. At least one restaurant with permanent seating capacity for more than 60 patrons that is open to the public 24 hours each day and 7 days each week 4. A gaming area within the building or group of buildings
All of the following bets can be placed by a player, without a dealer's assistance:
1. Pass Line and Don't Pass -Don't pass bets can be placed immediately before the come-out throw. -Pass line bets can be placed at any time, including after the come-out throw. 2. Field -A one-throw bet that can be placed at any time. 3. Come and Don't Come -These wagers can be placed at any time. However, if wagered immediately before a come-out throw, the player's come or don't come wager would be moved by the dealer to the pass line (in the case of the come wager) or the don't pass (in the case of the don't come wager). 4. Big 6 & Big 8 -These bets can be placed, increased, decreased, or removed at any time.
The GCB primarily functions to:
1. Provide for the effective investigation, licensure, and administrative approvals in conformance with applicable statutes and regulations, thereby promoting growth and stability of the gaming industry. 2. Issue recommendations to the NGC in licensing matters and gaming employee registration appeal cases 3. Establish rules and regulations for all tax reports submitted by Nevada gaming licensees.
The following bullet points provide terse descriptions of the one-throw bets in the proposition box:
1. Seven: a bet that the next throw will be a 7. A winning wager is paid 4:1. 2. Individual Craps Numbers: A bet that the next throw will be one of the specific craps numbers. Some casino operators pay 30 FOR 1 on the 2 and 12, and 15 FOR 1 on the 3 and 11. Other operators pay 30 TO 1 on the 2 and 12, and 15 TO 1 on the 3 and 11. 3. Any Craps: instead of specifying a particular craps number, the bettor wagers that the next throw will be any of the craps numbers. The bet wins if a 2, 3, or 12 is thrown. A winning bet is paid 7:1. 4. Eleven: A bet that the next throw will be an 11. Some operator pay winning wagers at 15 FOR 1, while others try to entice bettors with a 15 TO 1 payoff. 5. Hop: a bet that is made verbally, often while the dice are in the air. Specifically, the bettor is calling the outcome of the current throw. If a bettor believes the upcoming throw of the dice will result in a 6, he must call exactly how it will appear, i.e., 4-2, 3-3, or 5-1. Any of the 11 numbers that can be thrown can be called on the hop. 6. Horn: a combination bet on the 2, 3, 11, and 12. A horn bet is equivalent to individual bets on the 2, 3, 11, or 12. Of course, only one of these bets can win. Casino cheques are often minted in denominations that are multiples of 5, such as $5 or $25. Bettors will throw one of these cheques toward the proposition box and call-out a bet such as horn high 3. This instructs the dealer that the bettor wants 1/5th of the cheque's value wagered on the 2, 1/5th on the 11, 1/5th on the 12, and 2/5ths on the 3. The bet on the 3 would be twice as great as the bets on the other horn numbers, because of the bettor's request. If the bettor were to call "horn high 12", the 12 would receive 2/5ths of the cheque's value, assuming its denomination was a multiple of 5. 7. World: a combination bet on the 2, 3, 7, 11, and 12. A world bet is equivalent to a bettor making individual bets on each of the 5 numbers.
The Gaming Policy Committee consists of 11 members. Unlike the NGC and GCB, this committee is not entirely appointed by the Governor. The committee is composed of:
1. The Governor 2. One member of the NGC (designated by the chairman of the NGC) 3. One member of the GCB (designated by the chairman of the GCB) 4. One member of the Senate (appointed by the Legislative Commission) 5. One member of a Nevada Indian tribe (appointed by the Inter-Tribal Council of Nevada) 6. Two members of the general public (appointed by the Governor) 7. Two members who are representatives of nonrestricted gaming licensees (appointed by the Governor) 8. One member who is a representative of a restricted gaming licensee (appointed by the Governor)
The Gaming Control Act and NGC Regulations provide guidelines and standards for determining the quality of individuals appropriate for a gaming license. These standards include, but are not limited to, the following:
1. The applicant is a person of good character, honesty, and integrity 2. The applicant is a person whose background, reputation, and associations will not result in adverse publicity for the state of Nevada and its gaming industry 3. The applicant has adequate business competence and experience for the role or position for which the application is made.
Sequence
1. The rolls within a hand 2. The throws between decisions
The following bullets provide a review of the rules governing don't pass odds bets:
1. To lay an odds wager, the player must have a don't pass wager. 2. A point must be established before laying an odds bet. 3. The odds multiple offered to the players is determined by management (i.e. 2x, 3x, 3/4/5x, etc.). In most cases, don't pass bettors are permitted to lay odds for an amount equal to the payoff on an odds bet made by a pass line bettor (someone who is taking odds). 4. The don't pass odds bet payoff is based on the probability of making the established point. 5. Because there is no casino advantage on an odds bet, and it is placed after a point has been established, the odds bet can be increased, decreased, or removed from the game at any time prior to a decision (i.e. on the established point).
The following points provide a review of the rules governing odds bets for pass line bettors:
1. To place on odds wager, the player must have a pass line wager. 2. The odds bet can only be made after a point is established. 3. The odds multiple offered to the players is determined by management (i.e. 2x, 3x, 3/4/5x, etc.) 4. The odds bet payoff is based on the probability of making the established point. -For point of 4 or 10, the odds bet payoff is 2:1 -For point of 5 or 9, the odds bet payoff is 3:2 -For point of 6 or 8, the odds bet payoff is 6:5 5. Because there is no casino advantage on an odds bet, and it is placed after a point has been established, the odds bet can be increased, decreased, or removed from the game at any time prior to a decision (i.e. on the established point).
All pass line wagers are paid out at a rate of:
1:1
Duties of the Stickman: 1. Runs the game and controls the speed of the game. Ensures the base dealers have completed the tasks of paying winning wagers and collecting losing bets before allowing the game to continue.
2. Responsible for all events on the end of the game opposite of the shooter. 3. Announces the outcome of the shooter's throw for all to hear. 4. Responsible for all proposition box wagers.
When a bettor makes a hard 6 wager, he wins if:
3,3 is thrown before any easy 6 or a 7. A winning hard 6 bet is paid at 9:1, creating a casino advantage of 9.09%.
Duties of the Boxman: 1. Observes all actions on the game. Responsible for game protection matters, such as identifying past-posters and dice scooters. 2. Responsible for customer service, usually in the form of assisting players with questions about the game or correct betting increments for a specific wager. 3. Checks the accuracy of all payoffs made by dealers. The boxman may assist the dealer in calculating difficult payoffs. 4. Counts and deposits buy-ins. When players buy-in, the dealer will place the cash on the layout in front of the boxman, who then counts it in plain view. He will then instruct the dealer to give the player cheques in the amount of the buy-in. Finally, the boxman will deposit the player's cash buy-in in the game's drop box. 5. Mediate and resolve disputes. The boxman may request assistance from a supervisor such as a dice floorman or a pit manager, if the dispute involves a significant amount of money.
6. Responsible for dice integrity. -Ensures that the dice used in the game are the same dice that were verified at the beginning of the shift. -Observes whether the shooter's hand is open or closed before the shooter picks up the dice. It should be open. -Observes whether the shooter's hands are open or closed after he/she throws the dice. They should be open. The boxman must verify that shooters are not somehow introducing their own dice into the game. -Verify dice that have tumbled off the game, before the dice are reintroduced into the game. When dice fly off the game and on to the casino floor, they are first handed to the boxman for verification before they are thrown again. 7. Shares responsibility with the base dealer for all occurrences on what is referred to as "his end" of the game. In terms of accountability, each end of a dice game has double coverage. The stickman is responsible for the end opposite of the shooter. The boxman is accountable for the end from which the dice are thrown. For example, if a player to the immediate right of the stickman is the shooter, the dice must be thrown to the opposite or furthest end of the table. That is, the shooter will be throwing the dice in the direction of the 2nd base dealer. In this case, the 2nd base dealer and the stickman would be responsible for the same end of the game, while the boxman and the 3rd base dealer would be responsible for the 3rd base end of the game.
An individual craps game will often be assigned a supervisor known as:
A boxman.
Off on the Come-Out
A default option that prevents bets surviving a pass line decision to be classified as ineligible for a decision on the next come-out throw. For example, players might have come bets with odds or place bets that remain in play after a point is made. If these bets were to remain in play and a 7 were tossed on the ensuing come-out throw, the bets would lose. However, the same 7 would cause a pass line bet to win. On a dice game, it is assumed that place bets, buy bets, and the odds portion of come bets are off on the come-out throw, unless the bettor requests otherwise. This rule allows all right bettors on the game to cheer/hope for the same result. That is, if these bets are off, tossing a 7 (or any other number) on the come-out throw will have no effect on them.
When a pass line wager is made, the bettor is an instant winner if the first throw of the dice results in either 7 or 11.
A pass line wager is an instant loser if the come-out throw results in a 2, 3, or 12.
Additionally, every throw has a name.
Each throw is either a come-out throw or a point throw.
Throw
A single toss of the dice
The off-Strip hotel-casino properties in Las Vegas are often referred to as the Las Vegas locals' market.
According to Nevada law, these Clark County properties must build a hotel with at least 300 rooms to receive a nonrestricted gaming license. -Rely primarily on local residents.
In general, for a rule-change strategy to be effective, players must be knowledgeable enough to see the value in the modification(s).
Additionally, a modification must also change the player's behavior in a way that benefits the casino operator.
At the heart of the game is the pass line bet. It represents the basis of all dice bets.
All other bets are essentially side bets made possible by a pass line bettor throwing the dice in pursuit of a decision.
Ticket-in, voucher-in
Also used to describe the dollar-amount of wagers placed.
Comp.
An abbreviation for complimentary.
The application process for receiving a nonrestricted license is lengthy and difficult.
An applicant begins the process by filing an application, submitting fingerprint cards, filling out an approximately 100-page personal history disclosure form, and signing paperwork giving the GCB power of attorney. GCB also requires every piece of financial paperwork, including bank statements, investment account statements, IRA statements, tax returns, real estate documents, and many other business/financial documents related to the previous five years of the applicant's life. After the Investigations Division has compiled and analyzed all required information, a report on each individual applicant is written. The GCB holds its monthly open meeting to consider the application and issues a recommendation to the NGC. Two weeks later, the NGC holds its monthly public meeting, and votes on the GCB's recommendation. Whole process can take over a year.
The application process for a restricted license is much simpler.
An applicant pays a flat fee, rather than footing the bill for all investigative costs. The scope of the investigation is narrower, primarily focusing on the applicant's source of funding for the business venture. Most restricted license investigations take only a few months.
Buy bets are positioned in the same location as come bets,
And lay bets are positioned in the same location as don't come bets.
Key Employee
Any executive, employee, or agent of a gaming licensee having the power to exercise a significant influence over decisions concerning any part of the operation of a gaming licensee
Another noticeable difference is the tax rate.
Aside from tribal gaming, most, if not all regulated jurisdictions in the world tax gaming revenues at rates beyond that of Nevada's.
Increases in the odds multiple will decrease a player's:
Average play time and result in less win for the casino.
High-limit gaming cheques are sometimes referred to as:
Biscuits, due to the greater circumference of the cheques.
Gross Gaming Revenue (GGR) is defined as:
Cash received as winnings + cash received in payment for past credit issuances + cash received as a rake - cash paid out as losses to patrons.
Observations: Hotel Summary P&L for Repeater-Market Resorts
Cause of the difference in O.I. $s? -Off-Strip hotel has far fewer rooms than the Strip hotel Impressive O.I. $s and margin for both resorts Off-Strip resort's 2nd greatest EBITDA producer, with an O.I. of $24.3M
Corporate Securities Division
Charged with conducting the background and financial investigations of publicly traded corporations that apply for a Nevada gaming license. Responsible for ongoing reviews of publicly traded companies that hold gaming licenses. -This includes monitoring Wall Street developments relating to gaming, and actions of licensees with regard to operations outside of Nevada.
Duties of the Base Dealers:
Collect losing bets and pay winning bets on their respective ends of the table. Base dealers are instructed to keep their eyes on their end of the layout. They listen for the call of the outcome from the stickman, to determine which bets to pay and which bets to take. Therefore, they do not need to look at the stickman or the dice to perform their pay, take, and game protection duties. Because of this protocol, numbers which can be mistaken for one another are announced in a particular way. This is done to avoid misunderstandings by the base dealers. -For example, a throw of 11 is announced by the stickman as "yo-leven", to clearly differentiate it from "seven". "Five, fever five" and "nine, nina" are also used by the stickman to differentiate throws of five and nine.
Beverage Summary Income Statement for Repeater-Market Resorts
Comp sales represent only 32.7% of the off-Strip resort's total sales If comp sales are removed from the off-Strip resort's P&L, the O.I. $s all but disappear
Hold Percentage
Computed by dividing win/(loss) by drop
Unlike don't pass and don't come wagers, the chances of the casino winning a buy bet or lay bet are constant across all throws.
Consequently, the bettor can increase, decrease, or remove these wagers at any time before the next throw.
If in fact the come-out throw results in a point, the pass line bettor wins if that same point is thrown a second time, before the shooter throws a 7.
Conversely, the pass line bettor loses if the shooter throws a 7 before throwing the point number a second time.
It is likely that both WWI and WWII fueled the popularity of craps in the 20th century.
Craps provided an easy and exciting way for soldiers to entertain themselves during their downtime in the base camps.
The Gaming Policy Committee
Created in 1961 An administrative body consisting of government, public, and industry representatives who are charged with making recommendations regarding gaming policy to the GCB and NGC. Meets only when called by the Governor. Recommendations made by this committee are advisory in nature, and the recommendations are not binding on the GCB or NGC.
Critical Items: Food Summary for Integrated Resorts
Departmental composition of I/S: -22 company-owned outlets, 12 externally- owned outlets, Cashiers, Stewards, Bakery, Butcher, & Garde Manger Comp Revenue is only 18.66% of Total Revenue $41M in OI 23.35% OI Margin
Critical Items: Hotel Summary for Integrated Resorts
Departmental composition of I/S: -Housekeeping, Bell & Door Services, Concierge, Reservations, Sales, & Hotel Admin. 81.64% of Total Revenue is Cash (vs. Comp) $159M in OI -Tremendous OI producer 64.58% OI Margin -This margin is very near that of the Slot Summary
Critical Items: Slot Summary for Integrated Resorts
Departmental composition of I/S: -Slots & Slot Marketing $2.5B in wagers $111M in OI -Tremendous OI producer 66.26% OI Margin
Critical Items: Table Game Summary for Integrated Resorts
Departmental composition of I/S: -Table Games, Casino Marketing, VIP Services, & Limo Services 22.7% hold is very high (normally circa 13%) High hold % created a strong OI ($60M) & OI Margin (28.03%) -Note: This property has had single-digit annual OI Margins (i.e., < 10%), on the TG Summary
When the upcoming throw is a come-out throw, the base dealers will:
Display the off-side of the puck and place it in the betting box labeled "Don't Come".
Enforcement Division
Enforcement Agents have full police powers, including arrest authority. They are charged with investigating criminal violations of the state's gaming laws. Handles customer disputes brought by gaming patrons against a licensee. Dedicates a large amount of their resources to arbitrating customer disputes, ensuring all games are conducted fairly, honestly, and free of corruption. Inspects and approves new games, surveillance systems, and chips, cheques, and tokens to be used in casinos.
Food Summary P&L for Repeater-Market Resorts
Far fewer outlets in the off-Strip resort -14 vs. 34 If comp sales are removed from the off-Strip income statement, O.I. becomes an operating loss -No money is collected for comp sales, but costs are still incurred
The 4, 6, 8, and 10 are all numbers that can be thrown one of two ways: the easy way or the hard way.
For example, a 6 can be thrown five different ways: 2,4; 4,2; 1,5; 5,1; or 3,3. The 3,3 is the hard way since there is only one way to get it. The remaining are the easy ways.
Players can oppose one another on most wagers in craps.
For example, an outcome of 7 can result in a win for a pass line bettor, while simultaneously resulting in a loss for a don't pass better.
Lay bets are the opposite of buy bets. Lay bets are wagers against the number.
For example, if a player lays the 4, she is betting that a 7 will be thrown before a 4.
Jurisdictions such as New Jersey and Macau do not allow licensees to defer tax liability on uncollected markers.
For example, if management were to issue a player $1 million in gaming cheques, by way of credit, and the player subsequently lost the entire $1 million, the licensee must recognize the $1 million as win in the reporting period in which it occurred.
Most craps wagers have what is referred to as an opposing wager.
For example, the pass line and don't pass bets would be considered opposing wagers.
Despite legalizing gambling in 1931, Nevada did not make any effort to tax casinos until 14 years later.
From 1931 to 1945, a casino owner simply needed to receive a business license from the city or county in which he chose to operate and pay a small fee.
A license to operate gaming in Nevada is a privilege granted by the NGC, not a right.
Had the operation of gaming been defined as a right, the state would have been powerless to eliminate organized crime influences from the industry.
The Administration Division
Handles the day-to-day administration of the GCB. This includes resolution of personnel and budget issues as well as record retention. Works closely with the state legislature regarding legislative issues and the Board's budget
An easy way hop 6 could be called as 4-2 or 5-1.
Hard way hop bets carry the same payoff and player disadvantage as proposition bets on the 2 or 12. Easy way hop bets carry the same payoff and player disadvantage as proposition bets on the 3 or 11.
The Chairman of the Board, who is its Executive Director, must:
Have at least 5 years of responsible administrative experience in either the public or business sector or possess broad management skills.
Spa Income Statement for Repeater-Market Resorts
Higher price points may make the spa a more viable business in the Strip resorts -The lower price point diminishes the O.I. margin in the off-Strip spa
Critical Items: Consolidated Income Statement for Integrated Resorts
Hotel revenue contribution -One of the biggest hotels in LV (in terms of # of rooms) Food & Beverage revenue contribution Overall balance of the Revenue Section -Non-gaming vs. Gaming Revenues Payroll & Operating Expense Margins EBITDA: $328M EBITDA Margin: 32.73%
Relative Revenue Contributions in the Las Vegas Strip Integrated Resorts: Top 5 Sources
Hotel: 26% F&B: 25% Table Games: 23% Slots: 18% Showroom: 8%
Relative Profit Contributions in the Las Vegas Strip Integrated Resort: Top 5 Sources
Hotel: 38% Slots: 27% F&B: 15% Table Games: 15% Showroom: 5%
On come-out throws, the default status of a place bet is off or not working. In the industry language, place bets are said to be "off on the come-out".
However, a bettor can request for her place bet to be working on the come-out. If a place bet is working on the come-out and a 7 is thrown, the bet will lose.
Place bets require the assistance of the dealer. They are not self-service bets.
However, place bets can be increased, decreased, or removed at any time before the next throw.
A bettor is not permitted to remove a pass line wager or to place a don't pass wager after the point has been established.
However, the better may increase a pass line wager or remove a don't pass wager at any time.
In the never-ending quest to reduce labor costs, many casino operators have eliminated the boxman position.
However, this decision is not without consequences. The boxman plays an important role in the operation of a craps game.
A come bet operates exactly like a pass line bet. That is, it wins if the next throw is a 7 or 11, and it loses if the next throw is a 2, 3, or 12.
If a point is thrown, the come bet is moved to that number. It wins if that number is thrown before the shooter throws a 7 and it loses if the converse occurs. This bet will only reside in the come bet location for one throw. If a natural is thrown, the bet will be paid at a rate of 1:1. If craps is thrown, the bet will lose. If a point is thrown, the bet will be moved by the dealer to the corresponding box.
Critical Items: Beverage Summary for Integrated Resorts
Includes revenues and expenses from 22 beverage outlets (including nightclubs) Comp Revenue = 23.85% of Total Revenue $18M in OI 33.87% OI Margin
The NGC has final decision-making power in granting or denying a license to an applicant. Their voting process, however, is determined by the recommendation of the GCB.
If the GCB unanimously recommends approval, a simple majority rule vote by the 5 members of the NGC is needed for approval or denial. If the GCB is split 2-1, either for approval or denial, a simple majority rule vote by the NGC is needed for approval or denial. If the GCB unanimously recommends denial, the only way for the application to be approved is a unanimous approval vote from the Commissioners. This two-tiered system has proven successful in guarding against political corruption in gaming regulation.
Craps may have taken its name from "crabs", a name for a throw/outcome in the game of hazard.
In fact, crabs described a throw resulting in 1-1 or 1-2, which form two of the three results known as craps in the modern version of the game (2, 3, 12)
When a craps game opens, the player on the stickman's immediate left is offered the dice, as the first shooter of the new game.
In order to shoot the dice, the shooter is required to place a bet on either the pass line or the don't pass.
Operating Expenses
Include items such as gaming taxes, supplies, and administrative expenses. -If an expense item is not classified as cost of sales or some form of payroll expense, it is most likely an operating expense.
One general difference in the regulations of other jurisdictions provides for:
Increased onsite presence of gaming regulators. For example, New Jersey and Missouri regulations prescribe much more onsite presence and oversight of operations than that of the Nevada regulations.
Hold percentage in the race/sports book
Is equal to the casino's win (or loss) divided by the write.
Pot
Is the dollar-value of all player wagers placed on a hand of poker.
The odds bet is one of the earliest examples of table game marketing by way of price.
It is the only dice bet with no casino advantage.
On come-out throws, the default status of buy bets is off.
Lay bets are always working, unless called "off" by the bettor.
Taking odds payoffs are: -6:5 for points 6 or 8 -3:2 for points 5 or 9 -2:1 for points 4 or 10
Laying odds payoffs are just the opposite: -5:6 for points 6 or 8 -2:3 for points 5 or 9 -1:2 for points 4 or 10
When the odds of the bet winning are greater than the odds of the bet losing, the bettor is said to be:
Laying odds. For example, don't pass bettors lay odds.
Each licensee is also assessed quarterly and annual fees based on the number of slot machines and table games in-service.
Licensees self-report the number of slot machines and table games in-service at their respective locations. The GCB Audit Division periodically inspects licensees for reporting accuracy. In addition, nonrestricted licensees are subject to a live entertainment tax of 10% on all sales occurring in venues in which live entertainment is taking place.
Critical Differences: Table Games Summary for Repeater-Market Resorts and Integrated Resorts
Magnitude of the results, in general Hold % Payroll margin -The greater revenue in the LV Strip Resort helped diminish the payroll margin in comparison to that of the repeater-market club Operating income margin -A single-digit operating income margin for the repeater-market club
Cash
Makes its way to the drop box via customer buy-ins and losing cash wagers.
Nightclub P&L for Repeater-Market Resorts
Marginal O.I. $s in the off-Strip resort -Strip nightclubs are a more viable business -->Higher drink prices -->Thousands of nearby hotel rooms (no need to drive) -Off-strip nightclubs are more of an amenity The results produced by the Strip nightclub were less than spectacular in comparison to other LV Strip nightclubs
In Nevada, drop =
Markers issued - markers redeemed + cash + Casino's own gaming cheques + foreign gaming cheques
Limiting the payment of commissions to winning buy bets, increased payouts on proposition bets, and increases in odds multiples are all examples of price discounting.
More times than not, these kinds of price discounts result in a permanent loss of profits. Before deciding to implement one of these rule modifications, it is a good idea to compute the increase in wagers needed to sustain the existing level of win (before the rule change).
Handle
Sometimes used to describe the dollar-amount of wagers placed in a specified period of time.
Critical Differences: Consolidated Income Statement for Repeater-Market Resorts and Integrated Resorts
Much less diversification in the revenue section of the repeater-market resort i.e., reliant on slot and F & B revenues The order of the top 5 revenue producing departments is quite different i.e., Slots is #1 in the repeater-market resort and #4 in the integrated resort The difference in the magnitude of the numbers in the two income statements i.e., the LV Strip resort posts much greater numbers in almost every line item
Hard way bets are the only wagers in the proposition box that can require:
Multiple throws to settle.
Political Traction of Integrated Resorts
Non-gaming Revenues (and profits) > Gaming Revenues (and profits) -This condition allows proponents to marginalize the socially objectionable gaming component -IR's may be an easier sell to those opposed to the legalization of gaming -->That is, I.R.'s are billed as Resorts first, and Casinos second
There are two broad categories of gaming licenses in Nevada, nonrestricted and restricted
Nonrestricted licenses do not restrict the number of machines, tables, etc. -Casino-resorts Restricted licenses allow 15 or fewer slot machines and no table games. -Bars, convenience stores, grocery stores, etc. -A slot route operator's license is considered a nonrestricted license. A distributor's license and manufacturer's license are two distinct licenses; however, for purposes of investigation and oversight, they are treated as nonrestricted licenses.
The location of the player on the game determines where his come bet is placed in the box. A full sized craps table can accommodate 8 players at each end of the game.
On the 2nd base end, the dealer will number the player from 1 to 8, in a clockwise direction. On the 3rd base end, the positions of the players are numbered in a counterclockwise direction.
The group of dealers required to operate a craps game is known as a crew, which is usually comprised of four dealers.
One of these four dealers is always on a 20-minute break. That is, a crew of four allows each dealer to work on the game for one hour, before taking a 20-minute break.
Right Bettors
One of two classifications of bettors, i.e., right bettors and wrong bettors. Right bettors are those who bet on the pass line and make wagers such as come bets, buy bets, put bets, and place bets. With the exception of the come-out throw, a 7 will cause the right bettor's wagers to lose.
Critical Items: Showroom Income Statement for Integrated Resorts
Only 3.83% of the Total Revenue is Comp Revenue $21M in OI 27.80% in OI Margin The costs to develop and produce this show were staggering
Critical Items: Poker Room P&L for Repeater-Market Resorts
Operating Income $'s: $3M Operating Income Margin: 51.59% Unusual for a same-size off-Strip poker room to outperform a Strip poker room. The off-Strip poker room outperformed the table game operation in terms of both annual operating income amount and operating income margin.
Other Non-Gaming Outlets for Integrated Resorts
Operating Income: -Nightclub: $3.9M -->This Operating Income was included in the Beverage Summary -Spa: $3.6M -Nightclub ($3.9M) + Spa ($3.6M) = $7.5M -Poker ($2.2M) + R & S Books ($3.7M) = $5.9M
Other Gaming Departments for Integrated Resorts
Operating Income: -Race & Sports Books: $3.7M -Poker Room (22 tables): $2.2M
Noteworthy Items: Bingo P&L for Repeater-Market Resorts
Operating income margin is OK, but O.I. $s are low -Curious use of casino floor space -This enormous room is likely to produce minimal profit per square foot The existence of bingo rooms is often justified by the assumption of indirect contributions to slot win, but... -This popular theory lacks empirical support
Casino operators are not required to pay taxes on:
Outstanding debt resulting from credit issued to players, until the money has been collected.
12 tossed on the come-out throw:
Pass line bet: Loses Don't pass bet: Pushes
2 or 3 tossed on the come-out throw:
Pass line bet: Loses Don't pass bet: Wins
7 is thrown before the established point:
Pass line bet: Loses Don't pass bet: Wins
7 or 11 tossed on the come-out throw:
Pass line bet: Wins Don't pass bet: Loses
Established point is thrown before a 7:
Pass line bet: Wins Don't pass bet: Loses
When discussing craps, the casino advantage is usually referred to on a:
Per-decision basis, as opposed to a per-hand basis.
New Jersey gaming regulations permit players to make wagers known as place bets to lose. Some other jurisdictions do too, but its not common.
Place bets to lose are a form of lay bet. That is, the bettor is wagering that 7 will be thrown before a selected point number.
Place bets differ from pass line and don't pass bets in that:
Players can select and wager on a specific number. With a place bet, a player is betting that the selected point number will be thrown before a 7.
Because of the greater size and dollar-value of biscuits, they are often dropped.
Poker cheques are dropped because they have different face values from those of standard table game cheques.
A player who tosses the dice is known as a shooter.
Prior to his/her first toss, the shooter will select two dice from the set of 5/6. A rubber dice bowl is used to store the remaining dice, keeping them separated from the dice in action.
Markers Redeemed
Represent the dollar-value of payments made against outstanding marker balances, resulting from marker issues.
Restricted gaming licensees are not subject to a tax on gross gaming revenues.
Rather, they simply pay quarterly and annual fees based on the number of in-service slot machines at the location. The annual machine fee is $250 for each machine in-service (prorated on a monthly basis) and a quarterly fee of $81 per machine (with no proration).
Integrated Resorts
Refers to a gaming resort that features many other non-gaming amenities. -Often feature thousands of hotel rooms, several dining establishments, shows, nightclubs, spas, golf courses, and retail shopping malls. -In the more extreme cases, these resorts offer amenities such as wildlife exhibits, botanical gardens, and multi-purpose arenas capable of hosting major sporting events and concerts.
Actual Hold Percentage
Refers to the casino's slot win/(loss) divided by the dollar-amount of wagers placed, over a specified period of time.
Win/(Loss)
Refers to the difference between the dollar-amount of wagers placed and the dollar-amount of all payouts, over a specified period of time.
Payroll Expense
Refers to the dollar-amount of all salaries, wages, taxes, and benefits bestowed upon the employees and management. -Often referred to as the greatest controllable expense in hotel-casinos -Benefits include the cost of group health insurance, employee meal subsidies, vacation pay, and more.
When a dealer returns from a break he will usually:
Relieve the stickman, who will the relieve the base dealer who is due for his break.
Markers Issued
Represent the dollar-amount of credit issued to players by the casino.
Foreign Gaming Cheques
Represent the dollar-value of all gaming cheques from other casinos.
Operating Income/(Loss)
Represents a profit center's contributions to the property-wide EBTIDA -It is often used to evaluate the effectiveness of the profit center's management team. -It is the bottom line of each profit center's income statement.
Win
Represents the difference between the dollar-amount won by winning players and the dollar-amount lost by losing players.
Coin-In
Represents the dollar-amount of wagers placed in slot machines, over a specified period of time. -Is not revenue or win -It is a business volume indicator that expresses wagering activity related to one or more coin-operated machines, over a specified period of time. -Shall represent any form of slot machine wager, including currency, and tickets/vouchers.
Write
Represents the dollar-amount of wagers placed, serving as a measure of business volume in both the race book and sports book.
Rake (In Poker)
Represents the dollar-value of the casino's fee, which is collected from the pot.
Drop
Represents the net dollar-value of the contents of each table game's drop box.
True Odds
Represents the payoff on a winning wager that would result in neither a casino advantage nor a casino disadvantage. Note: true odds represent the payoff odds on a winning odds wager. True odds are the odds against throwing the point before throwing a seven. The player must first make a pass line bet before making an odds wager.
Comp. Expense
Represents the recorded cost of complimentary awards to the casino. -These include the retail (or near retail) value of room, food, and beverage awards earned by rated players.
Cost of Sales Expense
Represents the resort's acquisition cost of items sold to its customers.
Audit Division
Responsible for auditing the largest gaming establishments in Nevada to ensure all gaming revenue has been properly reported and all taxes have been remitted to the state. Monitors the financial operations of gaming licensees. Developed and periodically updates the minimum internal control standards (MICS), which define minimum controls to which each licensee must adhere.
Technology Division
Responsible for reviewing and testing all gaming devices and associated equipment before it is put into use on a casino floor. Performs random field inspections of gaming devices to ensure integrity. Assists the Enforcement Division with patron disputes by examining and analyzing gaming device electronics.
Tax and License Division
Responsible for reviewing the financial performance of the smaller gaming establishments in Nevada. Charged with the administration and processing of all tax collections from the gaming industry.
Investigations Division
Responsible for the investigation of all individuals and privately help business entities that apply for a Nevada gaming license. Investigations personnel conduct an exhaustive examination of each applicant's personal and financial background, to ensure the integrity and suitability of the individual.
Estes Kefauver
Senator from Tennessee who was appointed to a special Senate subcommittee in 1950 to investigate interstate gambling and racketeering activities. Saw investigating organized crime as his route to national prominence. -Held hearings in 14 cities including Vegas. To remedy the problems of gaming regulation in Nevada, he recommended the federal government impose a 10% tax on all gaming. -Caused a political uproar -Senator Pat McCarran argued fervently against him. -Proposal got rejected.
Relative Revenue Contributions in the Las Vegas Repeater-Market Resort: Top 5 Sources
Slots: 46% F&B: 26% Hotel: 13% Table Games: 9% All Other Games: 6%
Relative Profit Contributions in the Las Vegas Repeater-Market Resort: Top 5 Sources
Slots: 66% Hotel: 16% F&B: 11% All Other Games: 6% Table Games: 1%
Noteworthy Items: Race & Sports Book for Repeater-Market Resorts
Solid operating income ($5.1M) and margin (47.85%) -However, operating income $'s is much less than the $99M from slots. Unusual for an off-Strip book to outperform a Strip resort's book, in terms of operating income $'s
EBITDA
Stands for earnings before interest, taxes, depreciation, and amortization.
When the odds of losing the bet are greater than the odds of winning it, anyone wagering on such a bet is said to be:
Taking odds. For example, when a player makes a pass line bet and follows it with an odds bet, the player is said to be taking odds.
In dice, every outcome or number that can be thrown has a name.
That is, 7 and 11 are known as naturals; 2, 3, and 12 are called craps; with the remainder of the possibilities known as points (4, 5, 6, 8, 9, and 10).
In addition, the NGC makes a determination regarding the source of funds for an operation.
The NGC must be satisfied that the source of funding for an operation was obtained from a reputable source. -This is, again, a tool to eliminate organized crime influences from the industry.
Any beneficial owner, officer, director, manager, etc., of a holding company of a gaming license, who is engaged in any way with the administration or operation of the gaming licensee must be found suitable by the NGC, and may be required to licensed.
The NGC uses the exact same requirements in determining suitability for an individual as is used in determining licensure. Any individual working for a licensee and exerting day-to-day control over the gaming operations is required to be licensed.
In 1955, to regulate the industry, the legislature organized:
The State Gaming Control Board (GCB) as a division of the Nevada Tax Commission.
Seven-out
The act of throwing a 7 before throwing an established point. For a pass line bettor, this would result in a loss.
Apron
The area between the pass line and the edge of the table. -Apron is not printed on an actual craps layout.
The most common differences in payoff odds occur on:
The number 12 in the field wager and the proposition bets on the numbers 2, 3, 11, and 12.
The field is the simplest of dice bets. It is a one-throw self-service bet.
The bettor wins if any of the field numbers are thrown (i.e. 2, 3, 4, 9, 10, 11, 12) and loses if any other number is thrown (i.e. 5, 6, 7, 8). -A winning field bet pays 1:1, unless a 2 or 12 are thrown (2:1; some games give 2:1 on 2 and 3:1 on 12)
Stickman
The dealer who handles the dice and proposition box wagers. -The boxman sits facing the stickman on the opposite side of the table.
The dealer position to the boxman's right is referred to as 2nd base.
The dealing position to the boxman's left is called 3rd base.
Just as the don't pass opposes the pass line, the don't come opposes the come.
The don't come will reside in that spot for only one throw. If that throw is a 2 or 3, the bet wins. If the throw is a 12, the bet will push. If the throw is a point, the dealer will move the bet to the area behind the point. It will win if a seven is thrown before that point is thrown again.
One member of the Board must be a certified public accountant, have five years of progressively responsible experience in general accounting, and have a comprehensive knowledge of the principles and practices of corporate finance.
The final member of the Board must be selected with special reference to his training and experience in the fields of investigation, law enforcement, law, or gaming.
Critical Differences: Slot Summary for Repeater-Market Resorts and Integrated Resorts
The hold % in the repeater market is 17% below that of the Strip resort (5.47% v. 6.60%) -This is to be expected, given the differences in price sensitivity and spend-per-trip between the two customer bases The EBITDA contribution from the slot operation is much more critical to the success of the repeater-market property -Slot profits carry these resorts
Gaming Policy Committee
The legislature created this in 1961, which has the authority to hold hearings on gaming policy, and serves as a recommending body to the NGC and GCB.
Although a significant source of table game revenue in U.S. casinos,
The number of craps games has fallen well behind the number of blackjack tables.
Example: Assume a player wagered against a $1 million line of credit, and lost the entire line in March; however, the casino operator did not collect the $1 million until June.
The operator's gaming tax liability on the $1 million would be deferred until June (i.e. the month it was collected). In addition, if the casino operator agrees to forgive the debt, or settle for a lesser amount, the operator only pays tax on the amount of cash received, which, in the extreme case, could be nothing.
Decision
The outcome of bet, i.e., a win, loss, or tie. A pass line decision can occur after one throw when the come-out throw is a natural or craps number, or it can occur after multiple throws when a point is established on the come-out throw.
When a casino operator offers double odds, it means that:
The player is permitted to make an odds wager that is 2x as great as his pass line wager. However, when the point is a 6 or 8, players are permitted to take up to 2.5x odds, on a double-odds game.
If a point is thrown on the come-out throw,
The player's chances of losing the pass line wager will always be greater than her chances of winning it.
If the come-out throw is a point number, then only two numbers matter to the pass line bettor;
The point number that was thrown and 7.
The stickman is responsible for all proposition bets. This includes computing all payoffs on winning wagers and keeping track of which bets belong to specific players.
The stickman must also track the ownership of the remaining proposition bets. This is achieved by positioning each bet within the betting box in a manner that corresponds to the bettor's location on the game.
In Nevada, gaming taxes appear in the income statements of gaming departments and represent
The tax liability owed to the state's gaming regulatory agency.
Come-out Throw (or Roll)
The throw immediately following a pass line decision.
Dice tables typically measure 10-, 12-, 14-feet in length.
There is also a one-man 6.5 foot table that is occasionally found in the smaller casinos in Northern Nevada.
When making a pass line or don't pass odds bet, the players place the bet without the assistance of the dealer. This is not the case when making a come or don't come odds bet.
These bets must be placed or set by the dealer. In this case, the player will place her odds bet on the table, in the amount she wishes to take or lay. She will then instruct the dealer accordingly. -For example, if she has $100 come bet that has made its way to the 4, she might say, "$200 Odds on my 4." The dealer will then take her cheques and stack the odds bet on top of her original come bet in a staggered or offset fashion.
The ancient Greeks actually cast six-sided heel bones salvaged from dead animals.
These early "dice" were known as astragali. The astragali were used for both gaming and religious purposes.
In Nevada, Forms NGC-01 and NGC-31 are completed by the licensee each month.
These two forms accompany the licensee's monthly tax payment to the NGC.
Regardless of the payoff printed on the layout, the dealers always pay winning wagers in terms of x to 1, where x is either the posted payoff or a FOR 1-equivalent.
This allows the dealer to leave the bettor up for the same wager. For example, if a proposition box bet on the 11 pays 15 for 1, per the layout, the dealer would pay this bet 14 to 1. That is, the dealer would leave the player's bet on the 11 in place, and pay the player 14 units.
In 1945, the Nevada legislature passed Senate Bill 142, instituting a 1% tax on gross gaming revenue.
This bill defined gross gaming revenue as "The total sums received as winnings less only the total of all sums paid out as losses by a licensee under a state gambling license.
Senate Bill 142
This implemented a 1% tax on each gaming establishment's gross revenue. In addition, this bill made the Nevada Tax Commission the gaming industry's regulatory authority.
Put bettors will make a nominal pass line bet, after a point is established, for the right to make an odds wager.
This is done in spite of the fact that the player's disadvantage on a pass line wager increases significantly when it is made after a point is established.
In addition to the state's licensing requirements, several local jurisdictions in Nevada require gaming license applications to be filed.
This is primarily a way for these jurisdictions to collect license fees. Local jurisdictions do very little due diligence on proposed gaming licensees. Instead, they wait for the decision of the NGC and then follow suit.
Gaming Control Act of 1959
This law created the Nevada Gaming Commission (NGC) to oversee activities of the GCB, eliminating the Tax Commission from the gaming control system.
In some cases, a fifth dealer is added to the crew in lieu of the boxman.
This new position is referred to as "sitting bank", as this dealer is not officially a boxman and has no supervisorial duties. -When sitting bank, the dealer is responsible for counting buy-ins received from players, game protection, and oversight of payouts. -A dealer sitting bank is not responsible for oversight of dealing procedures, but will assist dealers in the calculation of difficult payouts.
Once a seven-out occurs, the dice are passed in a clockwise direction to the next eligible player.
This player would have the option to shoot or pass the dice to the next eligible player. Not all players wish to shoot.
In addition to positions for which gaming licensure is required, the NGC has the power to require any person in the gaming industry to file an application and go through the licensing process.
This power prohibits licensees from shielding employees from the licensing process. Such authority played a critical role in eliminating organized crime from the industry.
Slot
This term is often used to refer to all coin- or voucher-operated devices, including video poker, video keno, video/mechanical reels, and multi-program machines. -The general use of the term is common when discussing financial and operating results.
Nevada's gaming industry is regulated through a two-tiered system consisting of the NCG and GCB, as required by the Gaming Control Act.
This two-tiered system, in which the GCB makes recommendations to the NGC, which makes the final approval, was originally implemented to ensure the system avoided any appearances of corruption.
Self-Service Bets
Those that can be placed and positioned on the layout by the bettor, without assistance from a dealer.
Marketing expenses, gaming taxes, and building maintenance costs represent:
Three of the greatest contributors to operating expenses.
If the don't pass bettor were to win whenever the pass line bettor lost, the don't pass bettor would in effect be in the same position as the casino. That is, the don't pass bettor would have an advantage.
To create a casino advantage on don't pass wagers, the 12 is "barred". This means that when a 12 is thrown, the pass line bettor loses, but the don't pass bettor ties.
Winning lay bets are paid true odds. That is, if a player lays the 4 for $200, she is paid 1:2 ($100).
Traditionally, the commission on lay bets is equal to 5% of the payoff on a winning wager. -For instance, if the bettor lays the 4 for $200, a winning wager would be paid $100. Therefore, the bettor would be charged $5.
A wager on the Big 6 wins if a six is thrown before a 7. The Big 8 bet wins if an 8 is thrown before a 7.
Traditionally, winning bets are paid at a rate of 1:1, but regulators in NEW JERSEY now require casino operators to pay winning big 6 and big 8 bets at a rate of 7:6. Vegas is still at a rate of 1:1. -The bettor can increase, decrease, or remove the big 6 and big 8 bets at any time before the next throw.
Gaming employees whose job responsibilities do not require them to file a key employee application are still required to register with the GCB.
Upon registration, the GCB checks criminal databases for any outstanding warrants and/or prior criminal convictions.
In the area of the layout known as the proposition box, the payoffs are often expressed in terms of FOR 1 (e.g., 30 for 1).
When payouts are expressed in this manner, the winning bet is exchanged for the payout. -For example, a player wagers $1 on a bet that pays 5 for 1. If the player wins, her $1 bet would be exchanged for the $5 payoff. Therefore, she has won $4, not $5.
Modern craps evolved from a dice game known as hazard, which dates to at least the 13th century.
While hazard became widely popular in medieval Europe, it is thought to be of Arabic origin.
When a player buys a number, she wins if that specific number is thrown before a 7 is thrown.
Winning wagers are paid at true odds; however, players who make buy bets must pay a wagering commission equal to 5% of the amount wagered. -This commission represents the casino advantage.
Many casino operators have instituted a "free buy" modification, to increase the attractiveness of the buy bet.
With free buy, the bettor is only charged the 5% commission when his buy bet wins. -In most cases, operators only offer free buy to players who buy the 4 or 10. -Free buy on the 4 or 10 reduced the casino advantage on these wagers from 4.76% to 1.67%.
Wrong Bettors
Wrong bettors are those who bet on the don't pass and make wagers such as don't come bets, place bets to lose, and lay bets. With the exception of the come-out throw, a 7 will cause the wrong bettor's wagers to win.
