Casinos aim to capture 8% of the total disposable income of gamblers. David le Page explains how they work out the odds
Out at the unsetting Sundome Casino on a Monday night, there’s no shortage of willing cash-cow customers hanging round the tables and lining up at the slots like Pavlovian dogs waiting for bells, lights and whistles.
No one pays for parking at the Sundome, 20km west of Johannesburg – suggesting an operation that needn’t bother with such petty cash. A stretch golf cart chugs ceaselessly from cars to the ever-open doors via a hypnotically spiral ramp and arching bridge, dropping gamblers, gulls and gob-smacked journalists into the belly of the beast.
Inside, a long room seems to extend never- endingly to left and right, an Aladdin’s cave where the visitor supplies the treasure.
The ambience is something like that of a hotel lobby, or – bright and multi-hued as it is – an evolved Spur steak ranch where the feeding relationship has been reversed.
What proportion of the money that arrives here remains? Though the focus of attention is around the tables, the focus of profit margins is around the slot machines, inside which the omnipresent silicon chip watches the averages with inhuman patience to ensure that around 8% of everything fed into the machine by subdued human consciousnesses stays there. The percentage varies from machine to machine, and the machines range from R1 slots to R100 slots, so as to satisfy as wide a range of appetites as possible.
All the machines are linked through an online computer system that tracks, for the casino and its auditors, every transaction down to each coin thrust eagerly through the slot.
The computer chip that bestows impartially each slot’s tumbling blessings is sealed into the machine by the Gambling Board after a machine called a cobatron has been used to verify the integrity of its software.
At the tables, the margins are closer to 3% of all that lands on the gridded, green baize surfaces, depending on the game. A great deal lands on those surfaces, and in each game there is a slight, mathematically calculated advantage for the house.
MGM Grand is the United States company which holds the management contract for Tsogo Sun, owners of the Sundome Casino. The vice-president (finance) of MGM Grand in South Africa is Rob Hannath, who explains easily some of the gambling arcana and how the Sundome ensures its profits.
According to Hannath, the easiest game in which to understand how the house manages its advantage is roulette. On any particular spin the ball can fall in one of 37 slots on the wheel. But the payout ratio is 35 to one, meaning that an average one out ot 37 bets placed ends up with the house.
Equally, while the payout on bets placed on black or red is even money (double the bet placed), there is also a green slot into which the ball may fall, maintaining the house advantage across that kind of betting.
Though the ball’s fall should be strictly random, there are reportedly roulette operators who are able to manipulate the fall of the ball.
A lawyer who has had dealings with the industry and manoeuvred through the fevered bidding for casino licences over the past couple of years says the managers aim to capture 8% to 9% of the total disposable income of the population groups targeted for plucking.
Since the Sundome seems to unite happily people from virtually all sections of the South African rainbow, that must amount to a very considerable sum. It is visited by people from a broad 50km radius, which obviously includes some of South Africa’s wealthiest and most densely populated areas.
But, “it’s like Pick ‘n Pay”, says Hannath. The Sundome’s profits come down to “feet through the door”.
However, while any feet are welcome through the front door, the back door is another matter altogether.
Casinos pass prospective employees through a very fine sieve indeed. A 54-page document supplied to the Gambling Board for each employee enables them to screen tax and criminal records for any hint of impropriety. It’s almost certainly far easier to get into the police force.
The casino is riddled with cameras, recording every last twitch of every last player. If players want to challenge a croupier’s decision, they can demand to see tapes of their games, which are kept for 10 days. Equally, the house can prove its own integrity in such cases.
And should a cellphone or handbag be left behind, the surveillance systems gives a better than 50% chance of retrieval – making such carelessness far less of a gamble in a casino. The surveillance systems are supported by the “MIBs”, security Men in Black prowling with little black earpieces for those who would pick on unwary patrons.
Reassured by such measures, up to 600 people pass each day through the Salon Priv, the inner sanctum of the tables where the minimum bet is R1 000.
The Sundome venue is simply a temporary venue before Tsogo’s permanent casino is opened up in Fourways.
The new facility will carry an attached R350-million convention centre, which served to sweeten the Tsogo licence bid to the Gauteng Gambling Board. It also gives an idea how much money is being poured into the gaming business in South Africa.
In Gauteng, the provincial tax on gambling revenue from the province’s five casinos is 9%. They are currently earning at a rate of R156-million a year. Unfortunately, the South African Revenue Service’s systems do not currently permit it to calculate what proportion of company tax in the fiscus comes from gambling.
But given the legendary diligence of the South African taxpayer, it seems the Sundome Casino and its brethren serve ultimately as an effective form of indirect taxation.