Understanding Casino Operations Through Mathematics

How surveillance departments rely on data to assess risks

Casino mathematics is a critical aspect of surveillance operations in casinos, serving as the cornerstone for understanding various key metrics like handle, drop, win, and hold percentages. These formulas are instrumental in evaluating the performance of games and the profitability of different profit centers on the property.

Surveillance departments rely heavily on this data to assess risks and allocate their resources effectively. For instance, the hold percentage, calculated as Hold% = Win divided by Drop, is a fundamental metric in determining the performance of games like blackjack. A deviation from the expected hold percentage can signal issues that need investigation, such as a potential drop in a game’s performance.

Regular monitoring of these metrics, as detailed in daily reports like the Daily Operations Report (DOR), is vital for someone holding the role of Surveillance Director. This report provides comprehensive information about the performance of each gaming and retail venue, including hotels, food and beverage services, entertainment, and more. It helps identify areas of loss or lower-than-expected revenue, guiding the allocation of surveillance resources and initiating investigations.

In-depth knowledge of casino math is crucial for understanding the nuances of gaming operations. Resources like “Casino Math” by Robert C. Hannum and Anthony N. Cabot, and “A Guide to Casino Mathematics” by Robert Hannum, (https://www.trendfollowing.com/pdfs/casino_math.pdf), offer comprehensive insights into the statistics, computations, and formulas used in the gaming industry.

Why the Math Matters

Surveillance teams must scrutinize a range of metrics across different operations. In gaming, numbers fluctuate daily but should return to expected values. Persistent anomalies might indicate issues like theft or cheating. Similarly, in retail venues like bars and restaurants, a sudden increase in the cost of sales percentage could suggest losses due to internal theft, shoplifting, or wasted product.

Variations in metrics like win percentage, hold percentage, and cost of sales percentage are significant. These deviations are not just numbers but indicators of potential problems that need immediate attention. The surveillance team treats these numbers as critical data points to track the flow of money and identify any discrepancies.

Effective surveillance also involves verifying the legitimacy of losses. This approach helps focus efforts on crucial areas and preemptively address issues before they escalate. For example, a surveillance director noticing a pattern of consistent wins by a player can initiate focused observation, leading to the identification of advantage players or cheaters.

Key Takeaways:

  • Metrics and Formulas are Crucial: Understanding and utilizing casino math is essential for effective surveillance, allowing the identification of discrepancies and unusual patterns in gaming and retail operations.
  • Proactive Surveillance: Regular and detailed analysis of daily operational reports enables the surveillance team to proactively address potential issues, ranging from game performance to retail operation losses.
  • Verification and Focus: Verifying the legitimacy of unusual patterns and focusing surveillance efforts based on data-driven insights are key strategies in maintaining the integrity and profitability of casino operations.

For more information on Raving’s full-service Security and Surveillance training programs, please call 775-329-7864 or email Kristine Woods at kirstine@betravingknows.com

Jennifer Boss 19 Articles