A 6/5 call to action

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The Mayor

Well-Known Member
Please read Al Rogers' letter on 6/5 blackjack (in the "New" section on the home page).

I am anxious to hear comments about this letter and to start a dialog about other concrete actions that can be taken.

Great letter, Al!

--Mayor

p.s., Al is an employee of bj21.com, and a truly nice guy.
 
R

Running Count

Well-Known Member
Race to the Bottom: An econ. student's view

Here, Here, Al! The 6:5 game is akin the sucker games Bob Stupak invented to lure the mathematically impaired into the former Stratosphere. No-Bust Blackjack, Craps-less Craps, etc.

I wanted to add my thoughts on the degradation of the blackjack games over time (not just the 6:5 game), from the perspective of casino economics. I probably know less about casinos and even econ than many on this board, but that's not going to stop me from opining freely.

Casinos compete with each other for the scarce resource of gambling dollars. Competition leads the casinos to offer various extras to secure consumers' business and loyalty. We have all seen this in action: comps, pretty fountains, free drinks, etc.

When competitors can offer some "public good," or benefit that consumers want, but costs the producers nothing or little to offer, the competing entities engage in a "Race to the Bottom" to offer more and more of that cheap benefit until it is gone. For example, Delaware is the official home to most of the Fortune 500 companies (in part) because they offer the most liberal liability laws in the country. It is tough to beat the corporations as a consumer in Delaware courts under Delaware law. Offering generous legal protection to the corporations costs Delaware little, but benefits them greatly because they have more corporate citizens, who pay taxes. The burden is borne by the public, who suffers from unaccountable corporations.

Here's where the Race to the Bottom comes to Las Vegas. Card counters will target the casinos with the most generous conditions. Like the states vying to offer the most corporate-friendly conditions, the casinos will vie to offer counter-UNfriendly conditions. The loser is stuck with all the counters. That casino will then tighten up its rules, and the next casino on the list bears the burden. In the end, all the casinos "race" to make their conditions no better for counters than their peers. The result is horrible conditions everywhere. Since the ploppies don't pay attention to conditions much, worsening the rules is a "public good." The casinos gain a lot from making their tables worse for everyone. The public loses (counters especially).

The solution for the Race to the Bottom and the Public Good problem in traditional economics is for the government to step in and regulate. For casinos, the only way to fix the problem is for the Gaming Board to step in and do something.

Which is where the 6:5 game comes in. If the Gaming Board acts here, the casinos will offer more, better blackjack. The public good problem will be somewhat aleviated. If they don't act, the table games will continue to deteriorate until they are finally simply carnival games on which the tourists can toss away money. Maybe, the Gaming Board can mandate that no casino offering BJ can provide worse than a 0.5% advantage game for the BS player. But now I'm dreaming.

RC
 
D

Double21

New Member
Re: Race to the Bottom: An econ. student's view

Nice post. In addition to your obvious knowledge of economics you are a very good writer.

I think the points you make about "racing to the bottom" make alot of sense. My only issue with your posts is at the end where you reference government involvement to correct this mess. I, for one, think we have too much "big government" now and I sure as hell don't want more. I shudder to think what would happen to blackjack if politicans and bureaucrats took over.

The solution is for enough customers to not play these carvival games and other bad offerings. Consumer education would greatly help. When enough of the typical casino customers vote with their wallets you can safely bet better games will quickly appear. But not before!

How do we make that happen?
 
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Rutager

Member
Re: Race to the Bottom: An econ. student's view

I disagree.

Your solution is very liberal is assuming that big government needs to regulate everything in order for casinos to survive. The amount of government control and regulation in business is still a very large and very open question. This very question has long been the center of political and economic debate. I don't believe it can be simply answered with your "race to the bottom" argument.

What if casinos continued to "race" to come up with the worse games, BUT they clearly identify the odds of the games and do not give any games deceiving names? It's possible that the ploppies would ignore the 'bj pays 1:5' sign on the 'Super-Rip-Off 21' table and keep playing these games. Do you think in this case the government should step in and regulate to stop this?

I am upset by game deterioration as much as anyone else on this board. But as a capitalist, I do not believe that the government should force the casinos to have to offer me the games I want (provided there was nothing shadey going on like price fixing or deception).

However, I do agree that false advertising should be prevented by the government. Casinos are intentionally marketing 6:5 bj as 'single deck bj' because they know consumers will think that they are playing a game with really good odds when they are not. This is clearly intentional deception. Of course, the success of Al Roger's letter probably hinges on what the official definition of "blackjack" is.

But still, you said some intering stuff, Running Count. I look forward to reading your future posts and you sharing your econ know-how.

Btw, although this has probably already been said, I think everyone on this board should try to spread the word about 6:5 bj to the ploppy community. When I sit down at a bj table at a place that offers 6:5, I sometime tell the people at the table how much money I lost at the 6:5 table. I go on to say how I thought the table was supposed to have good odds, but later found out it was a sucker bet. I don't care if the pb hears me saying this because it makes me sound like a ploppy when I pretend to have played the game.

-Rutager
 
R

Running Count

Well-Known Member
Big Gov't: a Rejoinder

No fan of Big Government, I! I learned what I know about economics from the classic market-based school, which distrusts regulation as presumptively inefficient.

On the other hand, even corporations themselves agree that they need regulation in some instances to prevent market "externalities" (e.g., the Race to the Bottom). While I think governments generally botch attempts to mettle in markets like the gambling industry (see California's lottery as an example), sometimes it is appropriate.

Two examples of GOOD results of Nevada regulating gambling: full-pay video poker, incentives to stop dealers from cheating you. I would like to add "supression of the deceptive 6:5 blackjack game" to this list. That's all I was suggesting as the role of government here.

I think the most important thing about the 6:5 game, as Rutager pointed out, is that it plays on the correct presumption by ploppies that they are better off w/ single deck. I knew this as a ploppie, myself. My post was more to get at the general issue with the degradation of the overall game over time.

Cheers,

RC

p.s. Its tough to be a fiscal conservative and a social liberal in a country that doesn't see those as compatible. Harumph.
 
R

Rutager

Member
Re: Big Gov't: a Rejoinder

Interesting.

I'd be interested in hearing any other stories about gambling laws in california and nevada.

-Rutager

ps- fiscal conservative and social liberal? You might want to check out the libertarian party. (www.lp.org)
 
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