Casino Math

>> Wednesday, June 17, 2009

Math can be a funny thing in any circumstance. (No, really.)

Take money, for example. Banks can actually create money that didn't exist by loaning more money than they have. (For those who pride themselves on accuracy, this is not illegal -- its part of the reserve requirements imposed by the federal government and is perfectly legal.) At the end of the day, when all loans are paid back, the bank has actually created money. Its pretty amazing.

I've figured out that casinos do the same thing. No, really. Take this example:

I went into a casino that gave me $5 of free "electronic credit" for its slot machines. The trick is that all $5 has to be spent in the machines. If I win it back, I can keep it. I go to a machine and play. I win some, and I lose some, but in general I win more than I lose. I start out with $5 of fake money and I end up taking home $7 of real money in my pocket. So I'm feeling pretty good. I haven't spent any money of my own, and I'm in the black to the tune of $7.

With me so far?

OK, here is the catch. When you read the "points" that I've accumulated on my trusty little casino card, you find out that the casino thinks I've lost about $20.

The same thing happened at a different casino. I put $5 in a machine, and at the end of my stay, I take out $15. I think I made $10, but the casino's points total tells me I spent $75.

Are you confused yet? Because I am. I go in each time and come out with more money than I ever put in. I think I've earned $10 that I never had before, and the casinos have me on their books as a loser of $75. Huh? At no point did I ever even have $75, and if I cashed out every single time I won, it wouldn't have ended up with $75. From my point of view, they gave me $5, I gave it back, they gave it back to me, and I gave it back again, and then they gave me a little bit more.

I guess I must not understand something fundamental, because I think I've won, and the casino thinks IT won. Obviously, we can't both be right. There must be something deeply mysterious about casino math, or the casino would be out of business, right? I mean, casinos aren't in the habit of sending people out winners.

Have you ever looked at the statistics on what kind of money people lose in casinos in the Vegas tour books? Its some appalling number like a thousand dollars a visit. Well, if the casinos all use the same kind of math, I can see how everyone helps that statistic. I mean, if I win money and go on the books as losing $75, then how much money did Darling Husband lose the day he hit the big jackpot and won $275? I mean, we probably lost $1000 that day alone, right?

You have to admit, one of the coolest things about playing the slots is when you hit a big jackpot and the little counter on the machine keeps sounding, "ding, ding, ding, ding, ding." Your breath catches in your throat, the excitement level rises with each "ding" while you look to figure out how much it will be and when the lovely sounds will stop. WOW! I just one 200 credits! YIPEE!

Then reality sets in and you realize that you are playing the penny slots, and that 200 credits represents a mere $2.00. It won't even pay for a decent latte in a coffee joint.

Ah, well, it's all in good fun. The adrenaline kicks in, and we have a good time. The bonus is I come out thinking I have more money than when I went in. I think I'm a winner. Don't spoil my illusion.


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