Thursday, July 30, 2015

Steve Wynn talks about Craps Odds

Yesterday I wrote a blog post about the Wynn Resorts second quarter earnings call. Mentioned in that post was the discussion of limiting craps odds to 2X. Many people seem to be interested in that topic, so I figured I would write a follow up post and include a transcript.

Steve Wynn talking about craps and more on the Wynn Resorts second quarter 2015 earnings conference call:

"I'm in the casino every day, and on the phone with my people. We've readjusted our floor. On the 4th of July. Interestingly enough, many of the games in Las Vegas have become marginally profitable.

Years ago down at Binion's they started at the crap table of giving ten times odds. If you bet a hundred dollars on the line you could bet a thousand dollars on the free odds behind the line - if you bet the pass line.

I'm getting a little technical, but in the old days in dice whatever you bet on the line you could bet the same amount behind the line. And that was a hold percentage of a little under one percent.

Then they started giving double odds compared to the amount of money you bet on the pass line, and that lowered the house percentage to point five seven.

Then it became a pattern on the Strip of what's called the three-four-five. Depending on what numbers you were betting on the crap table, to come up before number seven came up. You could get three times odds, four times odds, or five times odds. You know there are pairs of numbers on a dice table. Four and ten have two to one odds. Five and nine have a different set of odds, and six and eight are six to five. Well depending on what number you were trying to get, you could get three, four, or five times odds. That became a house advantage of point three seven.

With three dealers and a box-man, and half of a floor man for every table - craps is not a really profitable game at that level.

So I changed the casino. In effect I raised the price. And I went to double odds only. Except for extremely high play with a thousand dollar minimum bet.

I also rearranged the floor in the casino to put our specialty games that are very popular with the public - that have a higher margin - and I put them in the hundred percent location. And I moved my games with less of a margin to secondary locations. Those changes have worked out favorably to us in the past three weeks, and that kind of re-examination... our slot floor has been re-done. We win more money with less games now. These are some of the reasons why we make more money than anybody else in Las Vegas.

Now, some of the operators will copy us. You know we're not allowed to talk to one another because of obvious legal implications of price fixing, but we don't really care what the other guys do. We run our own business the way we see we should, and we're not in business to offer games that don't make money. And I don't mind saying that publicly. So we've done quite a bit of work in tightening up the way the casino works.

I know our competitors are on the call and they probably, everybody knows it the minute you make a change like that in Las Vegas it goes around town like wildfire. But those are some of the things we're doing, and it touches every aspect. We're constantly re-examining everything we do here. We sit in my office and discuss the most fundamental aspects of this industry every single week. We are not so much concerned with what has been, or what is, as we are concerned about what might be. And that's a principal truth of our company whether it's in China or in Las Vegas, or Boston or wherever."