14/10/2001 Edition No.21

Blackjack Review
Submission

LATEST NEWS:

Star City in Sydney are having a Blackjack tournament in which prize-money will exceed entry fees. For an outlay of $100, you have a shot at the $100,000 first prize. Unfortunately there are no other prizes of note (second to sixth $500 consolation only).

A "buy-in" for $100 worth of tournament chips is required, however these chips and any won during the course of play can be cashed in at the end. Six heats will run every Tuesday at 7:00pm from 23rd October until 27th November comprising of one shoe(!). Competitors, (maximum 84 per heat) must enter at the Casino Cage at least 30 minutes prior to heats. Semi-Finals commence at 8:00pm and Heat Finals at 9:30pm, with the Grand Final at 7:30pm Tuesday 4th December.

It is a good bet to play in as many heats as possible; the first time in ages that blackjack has been worthwhile playing in Sydney!

Recent world and domestic events have had a dramatic impact on airline travel costs. The ‘new’ Ansett is currently offering the cheapest flights for the travelling blackjack player. Great ‘stand-by’ rates on accommodation throughout Australia can be found at www.woitif.com

One of our subscribers has recently visited Cairns Casino and reports on the current conditions. Two types of games exist:

In the VIP room (open only Friday and Saturday nights from 8.30pm to 2.00am) they have an eight deck game, covered shoe, 1.5 to 2 deck cut, minimum bet $50.

Downstairs on the main floor they have a six deck ‘Perfect Pairs’ side-bet game, 1.5 deck cut, minimum bet $25.

There was not much blackjack play happening, staff saying that turnover was down 40% since Ansett went bust. As a result, comping for rooms, meals and airport pick-ups was quite generous. Cairns comps at 0.4% of total action which would even make it value for a basic strategy player putting in four or five hours per day. The hotel attached to the casino is suposedly the best one in Cairns.

REVIEW OF THE RULES OF THE GAME OF BLACKJACK

The Victorian Casino and Gaming Authority is continuing its review into the rules of blackjack used by Crown.

The questions of player restrictions, use of Continuous Shuffle Machines and cut-card placement are being considered. People who contributed submissions to this review have been asked permission to disclose their work and identity if the Authority determines that a public meeting is an appropriate forum for determining possible rule changes.

We have indicated that we are happy for our submission to be made public and have no objection to being identified. However, we also said that the idea of a public meeting, which will obviously be attended by casino management could be a little tricky.

Under the current playing conditions, people do not want to identify themselves as possible advantage players and subsequently find themselves restricted and barred; so how many people would be willing to attend such a meeting?

Following is a copy of our submission to the Authority:

SUBMISSION FOR THE REVIEW OF THE RULES FOR THE GAME OF BLACKJACK UNDER SECTION 60 OF THE CASINO CONTROL ACT 1991

INTRODUCTION

Blackjack is the most popular of the casino table games. Its main attraction lies with the fact that the player makes decisions which can determine their fate. ‘Do I take a card or sit? Should I double or split? How much should I bet?’ Add to this skill factor the fast pace, high turnover and unbelievable runs of good and bad luck and you have a compelling gambling game which is a winner for the casino coffers.

Crown Casino is not forced to have the game of Blackjack. They have it because it makes millions of dollars for them. As a game of skill, it is generally played very badly. In my estimation, most players lose around 3% on turnover. At the bottom end of the scale you have beginners, drunks and bad gamblers making terrible plays and losing faster than they can pull money from their wallets.

At the other end of the scale are the players who have sacrificed thousands of hours (and dollars) to learn the intricacies of Blackjack. These ‘card-counters’ make up less than 1% of all players. Unfortunately (for them), most counters also end up losing due to lack of discipline, mental inaccuracies and over-betting of their bankrolls.

Casinos are well aware of this fact. Many even sell Blackjack card-counting books in their lobby newsagencies! Jupiters on the Gold Coast does this currently and Crown formerly at the temporary casino. This makes good business sense. People hear stories that good players are able to win at the game and this adds to Blackjack’s intrigue and popularity. The public is largely unaware, however, that the casino has rules which allow discrimination against players good enough to have a long-term edge.

I believe all players should play to the same set of rules when playing on a Blackjack table at Crown. All players should abide by the rules set out for hitting, standing, splitting, doubling and minimum/maximum bet as appears on the table. It should be clear as to the number of decks being used at a table. If there are four decks in use, it is obviously a mathematical impossibility for five Ace of Spades (or any other card) to appear within a 208 card range. This is not the case with continuous shuffle machines (CSM’s), which simulate an infinite number of decks in play.

Having said this, I am not unsympathetic to Crown’s arguments against card-counters. If many well disciplined, trained and bankrolled players were allowed unrestricted play, theoretically there could be an impact on profits. Fortunately, there are measures other than discriminatory ones that can combat this threat. Some of these measures are being used by other Australian casinos at this very moment.

There is a ‘middle ground’ where Crown and individual counters can co-exist. Crown must understand that "gaming and betting in casinos [must be] conducted honestly [sincerely, fairly and openly]": 140(b) of the Casino Control Act. Counters must recognise that Crown is a business trying to maximise profits while treading through some legal grey areas.

(i) Whether Blackjack should be considered a game of chance or should be considered a game that is partly a game of chance and partly a game of skill;

Blackjack is a game of skill, whether a player is counting or not. Crown readily promote Blackjack as a game of skill at their ‘How to Play’ tables (they do forget to mention that you are not allowed to be too skilful). In the short-term, runs of good and bad luck give the appearance that Blackjack is a game of chance. However, the longer the game is played, the closer to a predetermined win/loss rate a player will find himself.

If a player plays perfect Basic Strategy (0.5% loss on turnover) at $10 per hand for around 10000 hands, turning over $100000 he will most likely lose $500. This is the mean result. Luck is not a long-term factor.

If a large number of Basic Strategy players all played the Blackjack tables betting $10 per hand for the same number of hands, the results would resemble the classic normal distribution bell graph [A]. As the number of hands played increased, the bell would flatten and move to the left of the ‘y’ axis, until such a time that no-one was remaining on the right or ‘winning’ side of the graph [B].

The more skilful a player, the slower the bell moves to left. Card-counters are trying to make use of information available to everyone. By taking note of cards already dealt, much like a good Bridge player, he or she is hoping to achieve a positive expectation and have the bell move to the right.

Even with the greatest skill and accuracy, there will be many card-counters losing after a year’s play, simply due to bad cards. Others will burn their bankrolls well before this time and some will get carried away and begin over-betting until being crushed in a run of bad luck. The life of a counter and all gamblers is a roller-coaster of uncertainty.

I know several players who have been restricted after massive life-time Blackjack losses, because ‘in theory’ they are winners. Others who claim to be in the ‘black’ are unsure whether they’ve reached the ‘long-term’ of playing hours to be safe from the inevitable bad runs that can mercilessly wipe them out.

(ii) Whether the Blackjack rules should permit Crown Ltd. to treat differently from other players those players who practise card counting without the use of a device;

I believe Crown should treat all patrons equally and not discriminate against those practising card-counting without the use of a device. A ‘rule’ by definition should apply to everyone at the same table at the same time. It is outrageous to publicly display a Minimum and Maximum wager sign, and then turn around and say it applies to this group of people but not to this other group of people.

Crown provides a service by offering Blackjack as a table game and is bound by the Trade Practices Act 1974:

The consumer protection provisions (of the Act) prohibit unfair practices such as misleading and deceptive conduct, false representations and misleading statements.

52. (1) A corporation shall not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.

(2) Nothing in the succeeding provisions of this Division shall be taken as limiting by implication the generality of subsection (1)

53. A corporation shall not, in trade or commerce, in connexion with the supply or possible supply of goods or services or in connexion with the promotion by any means of the supply or use of goods or services:

(aa) falsely represent that services are of a particular standard, quality, value or grade;

(g) make a false or misleading representation concerning the existence, exclusion or effect of any condition, warranty, guarantee, right or remedy.

55A. A corporation shall not, in trade or commerce, engage in conduct that is liable to mislead the public as to the nature, the characteristics, the suitability for their purpose or the quantity of any services.

It might be argued that Crown are acting in a deceptive manner. They are placing conditions on their services without informing the public. In the past they have run ‘Play to Win’ promotions on their tables, with prominent signs displaying this order. Players attempting this have then been routinely restricted.

It is understandable if Crown want to prevent skilled players from playing in the casino’s ‘high-roller’ areas. These areas are a private club by invitation only and should not be subject to ‘Public Inquiry’. Crown have the right, as they should, to stop people entering an area not for the general public.

I have 3 suggestions for the public gaming areas. No’s 2 and 3 allow Crown to protect themselves from opportunistic or partnership play if they believe gambling revenue is threatened:

1. Remove rule 5.12 allowing restriction of players to minimum bet, one box only.

2. No Mid-Entry play. Once the first hand of a shoe has been played, no new bets or back-bets are allowed until the next shoe. If a player drops out for a hand, he is not allowed to re-enter play later in the shoe. Brisbane and Townsville are casinos which optionally use a sign to this effect.

3. Minimum to Maximum betting ranges of 1-10 (ie.: $10 - $100, $25 - $250, etc.).

No Mid-Entry prevents players playing only when the count becomes very positive (sometimes referred to as Wonging). It also stops organised play where one ‘big-player’ is called in by a counter sitting at a table. If this sign is present, individuals must play through negative expectations (around 72% of the time) in order to take advantage of positive ones.

Casino Canberra has provision within its rules for a similar situation, although it may discriminate between players at the same table.

From Casino Canberra rules of blackjack:

4.6 The Casino Operator may require any person:

(a) who has not made a wager on the first Round of Play; or

(b) who, after placing a wager on a given Round of Play, declines to place a wager on any subsequent Round of Play

to wager only the minimum wager displayed at the table until a new Shoe is commenced.

Casinos using No Mid-Shoe Entry often use the excuse that it exists to prevent players jumping in and out ‘messing up the cards’ for the other players. Many superstitious gamblers believe in keeping a constant number of boxes open to keep a run of good luck going. A positive side-effect of No Mid-Shoe Entry is to keep these valuable customers happy.

A betting spread of 1-10 is a reasonable compromise between counters and casino. A counter gets much of his (potential) advantage over the house when he has a large betting spread. Under current conditions, players are able to spread 1- 40 and even more when playing 2 boxes. If a counter’s minimum bet in negative situations is insignificant when compared to his large bets in positive, his playing risk approaches that of a Wonger. In an 8 deck game with 1 deck cut off, only the best counters could expect to make a profit with a 1-10 spread.

I ran some simulations of the above conditions over 1000 shoes. We are playing on a $25 table, betting minimum for true count of 1 and less (house advantage 0 - 3%) and for true count 1 or more (player advantage 0 - 2.5%) spreading evenly up to $250.

An accurate counter, with correct playing strategy would expect to make around 31 cents per hand in the long-term. In reality, expert counters have found they make 2/3 of expectation due to human errors. In this case, that means 20 cents per hand.

(iii) Whether card counting without the use of a device presents a risk to gaming in the casino being conducted honestly;

Reading between the lines, my understanding of this question is whether or not card-counting presents a risk to gaming revenue. Whilst discussing my restriction with Crown Casino management, I asked them whether they really believed card-counters were such a risk. I was told: ‘It’s debatable whether restricting card-counters has any effect on casino profits at all’. I am in complete agreement with this statement.

Crown Casino’s own manual for Understanding Blackjack and Card Counting reads on p14:

"The amount of information a counter must know to achieve success, is usually a deterring factor for new counters".

"In many instances counters who do not know exactly why certain strategies are called for or when to exercise them, are a good bet for the house".

Most people do not have the time, inclination, or persistence to do what it takes to become an expert card counter. There is a perception that it takes a photographic memory or genius intellect to be successful. This is certainly not the case, but it does take a lot of work. If you are determined enough, you will be part of a very small group of people more knowledgeable than probably 98% of those sitting on either side of the tables.

Another great advantage the casino has that a card-counter may not have is a virtually endless bankroll. It can sustain short term losses that card-counters sometimes cannot sustain. The majority of card counters may learn the basics, but do not have a good understanding of ‘Risk of Ruin’ or standard deviation.

In simple terms, a player with 500 units ($12500 in our example) has a 20% chance of losing their entire bankroll even with perfect play. They will be doing very well to have 5/9 winning sessions and over a year’s play (perhaps 500 hours, at 50 hands/hr), would average a $5000 profit.

Most counters I have known take on Blackjack massively under-bankrolled and are a very good bet for the house. It is difficult to justify allowing these players to crash and burn whilst kicking up a fuss about the few more experienced who survive the mix. Are those reformed gamblers who have in the past lost tens or even hundreds of thousands of dollars, not to be given a chance to recoup some losses?

At worst under the proposed conditions, I can visualise at any one time, 20 accurate counters putting in 10 hours a day on the (average) $25 table. It could be argued that in theory 365*20*10*$20(hourly profit at optimum 100 hands per hour) or $1,460,000 will be lost annually to counters. These losses would be offset to some degree by savings in surveillance. The more congenial playing conditions and hospitable atmosphere would encourage more people to begin or return to playing Blackjack.

I have spoken to many potential Blackjack players who have told me the whole scene is too intimidating and untrusting to take up playing. Is it too naive to hope for a lessening of the ‘Us versus Them’ mentality which exists on both sides of the table?

(iv) Card shuffling in Blackjack, in particular-

(a) The use of continuous shuffling by automatic shufflers

(b) The frequency of shuffling following the exposure of a "cut card";

(a) My view is that continuous shuffle machines (CSM’s) undermine the integrity of the game of Blackjack. The rules have always allowed for the use of 4-8 decks of cards, but CSM’s simulate ‘infinite’ decks. The uniqueness of Blackjack is that the odds change from hand to hand depending on the cards previously dealt. CSM’s allow for the re-introduction of cards into play well before four decks have passed. The odds basically stay fixed against the player, as in say, Roulette.

Gamblers and dealers have complained about CSM’s not giving a break in play. People who play Blackjack are ‘active’ gamblers, who enjoy the interaction between players and staff during shuffles or card changes. Dealers need a time-out between twisting from discard tray to new card. CSM’s reduce Blackjack to a random and passive ‘poker machine’ experience and encourages mistrust between the punter and CSM operator:

‘What is really going on inside that contraption?’

‘Why is the dealer feeding the cards back in now at a time of his own discretion?’

It is interesting to note the recent comments of MGM spokesman, Alan Feldman, not only because he underestimates peoples’ feelings towards CSM’s, but because he inadvertently supports the counters’ case.

The Las Vegas Sun

by David Strow

LAS VEGAS, Nevada – Aug. 17, 2000

Several models of continuous shufflers are currently being used at properties owned by MGM MIRAGE. Alan Feldman, spokesman for the company, said MGM MIRAGE is pleased with their performance -- but not, as most people might believe, because they detract card counting.

‘Card counting is not that big of an issue’, Feldman said. ‘Card counters most often fail miserably, and usually end up doing no better, and often worse than if they just played the game.’

Since these comments, many Las Vegas casinos have pulled out their CSM’s because of public and staff complaints, or simply due to falling Blackjack profits. Perhaps Australia can avoid following the USA down this course.

(b) Currently Crown operate by cutting off 1 deck from 8 where CSM’s don’t operate. This point should be maintained and written into the rules as a guide. There is no risk of running out of cards for the last hand with this cut. Casinos sometimes use the unfriendly ‘cut-halfway’ policy to throw off counters. This should not be allowed at Crown where it has been demonstrated that they can be sufficiently protected by other means.

(v) Rules 3.1, 4.1.5, 4.5 and 5.12 of Blackjack [as follows]

To summarise, I suggest a few alterations and deletions to these rules:

The Cards

3.1 Blackjack shall be played with four to eight decks, each deck

having 52 cards without jokers, with backs of the same colour and

design and one cutting card. [The cutting card shall be removed

when an automatic shuffling/dealing shoe is used.] - delete

The Shuffle and Cut

4.1 The cards shall be shuffled so that they are randomly intermixed-

4.1.1 prior to the start of play;

4.1.2 when the cut card is exposed or drawn as the first card of

a new round;

4.1.3 at the completion of the round of play in which the cutting

card is exposed;

4.1.4 immediately if, in the opinion of a game supervisor, the

cards are dealt in a sequence which is abnormal; and

[4.1.5 continuously where an approved automatic

shuffling/dealing shoe is in use on the table.] - delete

4.5 Once the cutting card has been inserted by the person designated

in this rule the dealer shall take all cards in front of the cutting card

and place them to the back of the stack, after which the dealer shall

insert the cutting card in a position [no more than half way in] - altered to - [approximately one deck] from the back of the stack. The stack of cards shall then be inserted in the dealing shoe for commencement of play.

Restrictions

[5.12 A gaming shift manager may limit a player to one box and to the

minimum wager for that box displayed on the sign at a blackjack

table. The VCGA Inspector must be notified prior to a player being

limited to a table minimum wager.] - delete

All players with current Blackjack playing restrictions are now free to play.

Signs to be used optionally by Crown in playing areas open to the general public to have minimum to maximum betting ranges of 1-10.

(ie.: $10 - $100, $15 - $150, $25 - $250, $50 - $500).

Optional use of ‘No Mid-Entry Play’ sign: After the first hand, no new bets or back-bets allowed until the next shoe.

Signs cannot be changed or introduced during the course of a shoe.

Best of betting!
‘CC’

News 30/9/2001

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