Gambling Tips > Blackjack

Lower Cut Card = More CASINO Profits!

By Nicholas Colon


Nicholas G. Colon is the managing director of Alea Consulting Group, a casino gaming consulting firm with a player centric philosophy.


I would be willing to bet a good portion of my bankroll that the majority of Advantage Players’ got their start by playing Blackjack, specifically using a card counting strategy that moves the wager up and down with the count.  Somewhere in the first year of their training, the counter concludes that the deeper the penetration (where the cut card is placed), the better the game is for the player.  But what is often overlooked, especially by table game managers and gaming executives, is that the lower the cut card is placed, the more profitable the game is for the casinos.  I know this seems counter intuitive, no pun intend; but I promise things will come into focus, by the end of the article.


The foundation of my assertion is that a dealer who isn’t dealing is not making any money for the casino.  When you factor hourly wages, sick days, and personal days, as well as benefits and vacation time, I conclude that for every hour a single dealer is not dealing, it costs a casino $22.  This is a standard net loss.  An even more staggering number is the opportunity cost associated with a stagnant dealer.


Opportunity cost in laymen’s terms is how many dollars one course of action costs over another.  For example, every year we hear about the high cost of raising a child to the age of 18. A recent article put the cost at just over $233,000. What is not clear is that the majority of the cost is associated with the opportunity cost of raising the child.  More to the point, raising the child is one path and working is another.  By choosing to raise a child or children over working, the parent loses out on the income that they would have otherwise earned by working. 


Similarly, different casinos vary their placement of the cut card in a blackjack shoe game.  Some cut two decks, and some cut only a single deck, in a six-deck shoe game.  Consider two games where the difference between the cut cards placement is one deck, e.g. in deck A the cut card is placed two decks from the bottom and in deck B the cut card is placed one deck from the bottom.   In order to derive the net gain for the casinos for each additional round dealt, some reasonable assumptions have to be made.  Those assumptions are defined in the following list, and have been verified by gaming experts, such as Michael Shackelford, creator of the Wizard of Odds website, and current lead consultants for Latest Casino Bonuses.

 

  1. Average # of cards per hand of Blackjack is 2.3
  2. Average number of players per table is 4
  3. Players average bet $40 (some bet more, some bet a minimum of $25)
  4. 84 rounds of blackjack are dealt per hour
  5. Average of seven active tables per casino
  6. Average Player plays to a -1.3% expectation against the house
  7. Only 1 in 47,000 players can accurately count cards in a casino
  8. Only 10% of the 1 in 47,000 players have a sufficient bankroll and time to play full time.

 

*I am ignoring lower denominations because I don’t consider the $5 tables that pay 6:5 on naturals and have automatic shufflers to be Blackjack.

 

Fifty two cards make up the deck difference between cut card placements.  Dividing 52 by the 2.3 cards, the result is approx 22.6 additional hands being played (equation 1). Dividing by 4 players per table, it results in 5.65 more rounds being played in the shoe with the lower cut card (equation 2).

 

 

 

 

The opportunity cost for a higher cut card as opposed to a lower one is approximately $138,000.00.  The time per round on a 4 player table is 1.4 minutes, and using a shuffle time of 5-7 minutes (using the high side of 7 minutes makes the math work out clean so I will use that).


1.4 minute hands/7 minutes = 5 hands


Every time a casino shuffles they are losing money and when done consistently over the course of a year they lose $780,685.  So it stands to reason that the casinos would want to play more and, shuffle less.  This is a benefit for online casino companies who use software as opposed to live dealers for their speed dependent games. But if we know anything for certain it is that most land based casino’s hire management personal that couldn’t think their way out of paper bag.


This derivation is a stripped down analysis.  Things get more complicated when you consider the number rounds played and exact time it takes to shuffle for 6 and 8 deck shoes.  Also, the average bet sizes on lower denomination games restructure the hold for the games; the 6:5 win on a natural blackjack also plays a part in the exact calculation for the hold. The lower denomination games, even with the 6:5 payout still brings in less money on a direct player to player comparison.  The last thing is to consider is how much additional money would be taken out of a casino with a lower cut card counters. I think it is fair to say that most high threat players have moved into advantage play techniques that are Beyond Counting, pun intended, so this impact would likely be minimal.


Casinos are seeing drastic drop offs in their player rates.  The 80/20 rule; this is where 80% of companies revenue comes from 20% of their customers, is shifting to an 80/15 rule and in some jurisdictions the shift has migrated to where 80% of the casinos gaming revenue comes from only 10% of their players.  However social media posts from casinos are remaining fairly consistent, indicating people are still going to casinos they just avoid the games.


The casino doesn’t make any money when a dealer doesn’t deal.  With the derivation in place why do some casinos choose to cut 2 and sometimes 2.5 decks, this leads to a dealer shuffling more and dealing less.  We have shown how much a shuffle costs a casino in actual dollars, but still nothing changes.  Why? In its simplest form and, in its most convenient definition the answer is a casino will not purposely do anything that will lead to a player winning.  I think this is paradoxical, because just being in the gaming industry will result in some players winning.  The key is that vast majority of players will ultimately give up money to the house; A concept that most casino executives have yet to grasp.