Casino managers have long known about the concept of Theoretical Win relating to gaming devices and table games. The term Theoretical Win and Average Daily Theoretical Win or ADT for short seems to popping up everywhere in casino jargon these days. Another term for this concept that was more commonly used in years past is Theoretical Take. It appears that the terminology has been airbrushed a bit to make it sound more positive and less threatening to our society now so obsessed with political correctness. Call this what you like, but understand that it is the single biggest factor affecting casino profits.
Theoretical Win is defined as follows: TW = GT x CI where GT = The Game Take Percentage and CI = The Cash bet into the game in dollars. Thus Theoretical Win is a dollar figure that projects the casino’s gross earnings per dollar played into a game. Average Daily Theoretical Win or ADT can be determined by averaging all Theoretical Wins across different games played on a daily basis. Since the earliest days of mechanical computing devices, such as adding machines, casino managers and accountants have computed and reviewed their Average Daily Theoretical from all games in a casino. They then reviewed their ledgers and compared it to their Actual Win or Take in real dollars from the casino floor. This process helped discover malfunctioning gaming devices and patron play patterns as well as criminal activity such as patron or employee cheating.
It should be kept in mind that Theoretical Win just as the name implies is a theoretical number in dollars. It is different from the Actual Win or Take. Each casino game’s Actual Win is subject to individual game variance, malfunction, player skill, player luck and possible cheating.
Casino Management Systems were developed to crunch these numbers in a more accurate and timely manner when computing technology became more affordable and easier to implement. These systems made it possible to track Actual Casino Take in real time on an individual game or device basis. This made it even easier to discover cheating, malfunctions or unpopular and unprofitable games on the casino floor.
Finally, in the last fifteen years or so player tracking systems have evolved to track the behavior of patrons by using the data from a player’s club card that is inserted into a gaming device or used at a gaming table. In return for being tracked, players have traditionally been offered benefits such as comps, cash, food, and additional entries into promotional drawings.
Most of the early systems primarily tracked the amount of money played into games by individual players. This money was often referred to as “coin in” a term that has become out dated since the invention of the cash vouchers or “tickets” we now use in the slot machines. A given configuration of a player tracking system will generally award a point or points for a certain number of dollars played into the machine or at a table. A notable exception was that there were once a few casinos that awarded points based on “coin out” or the amount of cash you took out of a gaming machine. The Coast Casinos in Las Vegas used such a system for many years.
The majority of early player tracking systems looked only at the “cash in” and the game being played. It’s likely that there are still some of these systems in place in casinos across the country today. Savvy players took advantage of a loophole in these systems by discovering the highest returning games and getting more points, comps, and cash back for the dollar played. Novice players or players who didn’t pay attention didn’t get nearly the return for their dollar played.
In the last few years casinos have countered the “advantage” players by lowering the number of points earned per dollar played on higher return machines. It is now common to see slot clubs pay one fourth to half the number of points per dollar on certain games such as video poker because the return percentage of these games can be determined and advantage plays are easily recognized. The down side for casino marketing is that this approach made the worse plays apparent by the process of elimination. In addition, even novice players, the ones the casino would profit from most, were discouraged from playing the games that returned fewer points.
The newest player tracking systems are now developing ways to track individual players based on criteria other than “cash in” and game played. Not surprisingly an old metric has recently fallen into the hands of Casino Marketing and Player Development. Some player tracking systems now have the ability to work with Theoretical Win on an individual basis. Computing a player’s Average Theoretical Win across all the games they play allows the casino to place a certain theoretical earning value on each individual player. If some of the Player’s Club benefits are based on this value, the casino can efficiently entice its most profitable players to play more.
The down side from the player perspective is that it is no longer as easy to gain or recognize an advantage play if your slot club benefits are based on Average Theoretical Win. We undoubtedly will see more and more use of this type of rating by the casinos. I have already seen graphical screens in the popular IGT Advantage player tracking system that plot an individual player’s ADT against a predetermined target ADT. The casino I saw this at was using it as the sole criteria for qualifying a player for their highest rating tier in the slot club.