Primer in Casino Mathematics
Think about this...
"A casino is a mathematics palace setup to separate players from their money. Every bet made in a casino has been calibrated within a fraction of its life to maximize profit while stillgiving the players the illusion that they have a chance." - Nicholas Pillegi, Casino (1995)
How do casinos make money?
- Each wager is offered at a "price and generates a quantity of the product sold
- As with any other retailer, total revenues for the casino equals price times quantity over the different offerings of the gaming floor
- Unlike other products, there are short term revenues based on "luck"
Why use Casino Mathematics?
Casino mathematics assists in:
- understanding the factors that influence table and slot performance in the short and long term
- providing a method to understand the volatility of casino operations and whether the casino is performing in the manner that mathematics dictates it should
- providing insights into "normal" versus "exceptional/unusual" revenue periods
- designing strategies to grow revenue by altering the game mix and price
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