How Do Casino Hosts Make Money

INSIDE LOOK AT CASINO JUNKETS

1. How Do Casino Hosts Make Money Now
2. How Do Casino Hosts Make Money
3. How Do Casino Hosts Make Money Youtube
4. How Do Casino Hosts Make Money At Home
5. How Do Casino Hosts Make Money Without

Getting a VIP Host. The policy on VIP hosts changes from one casino to another. Some set a specific players club tier where a host becomes the reward. Others wait for a player to ask for it. Some casinos have hosts scour through data to determine if a player's action warrants special attention. Caesars Entertainment Casino Host salaries - 8 salaries reported: $42,217 / yrBoyd Gaming Casino Host salaries - 7 salaries reported: $35,606 / yrCaesars Entertainment Casino Table Games Supervisor salaries - 7 salaries reported: $54,459 / yrCaesars Entertainment Executive Casino Host salaries - 6 salaries reported: $53,868 / yr. The base salary for Executive Casino Host ranges from $44,554 to $88,630 with the average base salary of $57,764. The total cash compensation, which includes base, and annual incentives, can vary anywhere from $48,768 to $97,579 with the average total cash compensation of $63,494. Casino hosts are not generally allowed to accept cash tips for guests, though small amounts (less than $50) will probably not get anyone in trouble. Anything higher is a conflict of interest. The casinos pay a generous salary to hosts to make money for the casinos. Too many cash tips opens the door for hosts to give comps based on what the host would make on the side, not what the casino would. Casino profitability. One casino owner would often test his pit bosses by asking how a casino could make money on blackjack if the outcome is determined simply by whether the player or the dealer came closest to 21. The answer, typically, was because the casino maintained 'a house advantage.' This was fair enough, but many.

By Henry Tamburin

Casino Junkets began in the mid-50's as a way to entice players to Las Vegas to gamble. Junket programs in those days were pretty straightforward. Casino operators would hire junket reps to fill a plane with qualified gamblers. These players would get free airfare, free hotel accommodations, free meals, free shows (and just about anything else they wanted) in exchange for their commitment to gamble a specific number of hours per day at an explicit average bet size. The casinos of course were gambling that the players would lose more than their out of pocket expenses for bringing, housing and feeding them.

That was the past. To get a fresh look at how junkets operate in 2005 and what benefits they provide players, I interviewed junket rep Sandy Crammer, owner of S&S Casino Tours, and Jeffrey Hoss, Director of National Casino Marketing, for Harrah's. What I learned about junkets might surprise you (it did me).

So let's begin by defining what exactly does a Junket rep do?

Jeffrey Hoss: First off, in the Harrah's organization we refer to our third party reps as Independent Agents rather than Junket Reps. Independent Agents send us customers (i.e. players) and in return they get a commission based on a player's theoretical. We have about 185 Independent Agents representing 47 states and 5 international countries that have a specific territory that they can market and promote our properties to their customers. In total our Independent Agents have scheduled about 300,000 customer trips annually to Harrah's properties.

I'd like for you to explain 'theoretical' to our readers but before you do, let me ask Sandy how she got started in this business.

Sandy Crammer: Before I started my own company, I ran a junket office as in-house employee for many years and I decided it was something I liked and wanted to try on my own. So my husband, Scott, and I started our own business and thankfully, Harrah's decided to take a shot with us four years ago to represent them. We have three employees in our company and currently we are one of the top 5 Independent Agent producers for Harrah's.

What areas do you represent for Harrah's?

Sandy Crammer: I currently represent Harrah's in Boston, MA; Providence, RI; Detroit, MI; and I'm expanding to Grand Rapids, MI.

How many package trips do you typically offer your clients?

Sandy Crammer: On a monthly basis I usually schedule into Atlantic City 2 flights from Boston (except 3 to 4 flights in the summer months), one flight from Providence, RI, and one from Detroit, MI. These are flights on a 120 seat chartered plane. Also every month we contract commercial airfare to Harrah's properties in New Orleans, Las Vegas, Reno, and Lake Tahoe. We usually do about 20 seats per month from our markets to those areas. We also run about 6 charter flights a year (130 passenger planes) to Laughlin and Reno/Lake Tahoe. In an average month we probably have 800 or more customers flying somewhere to Harrah's properties.

What are the play and front money requirements for a junket?

Sandy Crammer: There are no front money requirements. The play requirements depends upon what our guest is looking for, e.g. do they want to go on a charter flight, do they want their airfare comped, or are they driving to their destination and only looking for a room comp. We offer different packages in which some are totally comped and others it's buy one get one free or we charge the customer a nominal fee for the air and accommodations.

What would be the play requirement to get free airfare and free accommodations?

Sandy Crammer: As a rule of thumb, to get free airfare and accommodations, a quarter machine player is expected to play 5-6 hours per day (less time if playing dollar or higher machines) and for table game players its 5-6 hours per day at an average bet of $75+. If a player historically meets those requirements he or she would qualify for comped airfare and accommodations on one of our packages.

What if a player doesn't quite meet those requirements?

Sandy Crammer: They would have to pay a nominal fee for the air and room. For example, we recently offered our Boston and Providence customers the following 3 day/2 night discounted Atlantic City package that included round trip airfare from Boston (or Providence) airports, room accommodations, and transfers to and from the hotel for only $179 per person.

So how do you go about scheduling the trip you just mentioned and getting the plane filled with qualified players?

Sandy Crammer: I work with the marketing folks at Harrah's Atlantic City casino that support junket programs. They send me a schedule usually months in advance of dates that are available for me to bring in my customers. I decide which dates I want and Harrah's then charters the plane for me.

Jeffrey Hoss: Outside of Atlantic City, we have an individual dedicated to scheduling the 6 rotations in service for our casinos in Laughlin and Reno/Lake Tahoe. The schedule is determined in advance of three to four months and we work collectively with independent agents on dates and how they will market to them.

So now you are responsible to fill the plane with 120 qualified players. How do you do that?

Sandy Crammer: I have an extensive list of 20,000 or so casino players in our computer database. For each player I know their past play history as far as how many trips they have taken, how long they play, what their average bet size is, how much they won or lost and their theoretical. I then mail out about 7,000 letters per month to those players that have in the past met the play requirements that Harrah's is looking for. The qualified players that respond to our mailings get a seat on the plane. If I can't fill the plane completely with qualified players then I invite players on the next tier that would have to pay the $179 fee for air and room.

Jeffrey Hoss: It is actually working so well with Sandy's customers and others that we have made a commitment to bring in a 150-seat MD-83. Sandy has done such a wonderful job in marketing to her customers, we are confident that there is demand for additional seats.

How do you get all that play information on your customers?

Sandy Crammer: Every player that I send to a Harrah's property gets coded to me. At the end of each of my packaged trips I get a report from Harrah's that summarizes for each of my customers their entire play history during their trip. This information for each player in put in our database and it's how we determine which customers qualify for different packages that we might offer.

How Do Casino Hosts Make Money Now

Do you have the power of the pen in a casino?

Sandy Crammer: No, I can't approve comps for my players nor do I have access to Harrah's computers to review player information. But what I will do is contact the marketing department and tell them so and so in my group wants a comp to a specific restaurant. They would look up the playing history of that player in their computer database to see how many comp dollars the player has in his account. In most cases our players have accrued more than enough comp dollars based on their play to cover the cost of meals.

Jeffrey Hoss: Our Total Rewards program allows the customers to decide when and where they want to spend their comps. This alleviates the Independent Agent from making those decisions.

What benefits can an Independent Agent provide their customers?

Sandy Crammer: Besides providing travel arrangements for them, we provide our customers with just about anything else they need such as making reservations for dinners, shows, casino events, golf, ground transportation, you name it. Our guests know that they can call us for all their bookings at all of Harrah's properties. Plus someone from my office will travel with the group to assist them in their needs.

Jeffrey Hoss: A player who wants to visit multiple Harrah's properties can benefit from the services of an Independent Agent. They not only can provide the customer with services for say our property in Laughlin, NV but also our properties in New Orleans, Atlantic City, or elsewhere.

Are there different types of Independent Agents and do they have to be licensed?

Sandy Crammer: Yes, some are responsible for full charter aircrafts (which I am) while others Agents might only send a property an individual reservation (they are known as splinter reps). Independent Agents have to be licensed in all jurisdictions that they represent. For example, in the Atlantic City market we have to be licensed every 4 years and it costs $3,000. We must go through a detailed licensing process to obtain and maintain our Enterprise License. Other gaming jurisdictions that we do business in have a similar,but not as expensive, licensing procedure.

Jeffrey you mentioned that Independent Agents get paid a commission based on theoretical. Can you explain what that means?

Jeffrey Hoss: Our Independent Agents get a commission based on each player's theoretical or their expected long-term value to the casino. The latter is dependent on the players average bet size, length of play, and the casinos mathematical advantage over the player in whatever game he or she is playing. We track these variables for each player either through the use of a player's card if the player is playing slots or video poker or in the case of table play, our floor supervisors will rate the player and input the above information in our data base. We can then compute the theoretical for each player or roll the numbers up to a theoretical for all the players coded to Sandy. An Independent Agents commission is based upon a percentage of the groups theoretical with a sliding scale depending upon the total group expenses so the more expenses incurred by the group, the lower will be the Independent Agents percent commission. This way our Independent Agents would get penalized if their players didn't play up to their expected playing levels or were over comped for their play.

Why would a casino player use the services of an Independent Agent rather than a casino host?

Sandy Crammer: We consider ourselves one-stop shopping for all our customer needs and we have the ability to get it all done at more than one property. Because we represent a company like Harrah's we can offer our customers many more options. For example a player doesn't have to have a casino host in Atlantic City, another in Las Vegas, New Orleans, Reno, etc. They just call us for all their travel needs regardless of the destination.

Jeffrey Hoss: Our Independent Agents can market more than one Harrah's property to their customers. People like to travel more and visit different parts of the country. Harrah's owns or manages casinos in 12 different states including Arizona, California, Illinois, Indiana, Iowa, Kansas, Louisiana, Mississippi, Missouri, Nevada, New Jersey, and North Carolina. Our casino hosts and their staff at each property also provide support to our Independent Agents. So using the services of an independent Agent makes sense if you like to travel and visit more than one property.

Sandy, is there a turf issue for players between an Independent Agent and a casino host?

Sandy Crammer: Let me put this way. Our customers are coded to us internally in each property and it is how we get paid. If one of our guests starts dealing with a casino host we could lose that code and our commission payment. We spend thousands of marketing dollars every month for mailings to our customers to keep them informed of our upcoming trips and special events that are not reimbursed by the casino.

Jeffrey Hoss: We view this relationship similar to that of a pitcher and catcher, using a sports analogy. A property host will treat an Independent Agent's customer just as they would treat one of their own. Harrah's Entertainment prides itself on customer service and once they visit a casino, whether it is an invitation by Sandy or by a property host, we will do everything in our power to make their stay an enjoyable experience.

Have you ever had an issue with a customer not playing up to his or her expectations?

Sandy Crammer: It's rare when this happens and when it does it's usually because the player wasn't feeling well. You've got to remember that the players who get invited on our packages have a history of playing at a certain level over a certain time period. They usually maintain that playing level from one trip to the next.

What if they don't? What do you do?

Sandy Crammer: The player is dropped from our qualified list of players and if we invite them on another package trip they would have to pay the nominal fee we charge for air and room.

Do you have to be a high roller to go on one of your junkets?'

Sandy Crammer: As I mentioned, there are specific play requirements if you want your air and accommodations comped. However, we offer Tour and Travel packages to different Harrah's properties that require a nominal charge for air and hotel. We find that a lot of customers start out through our Tour and Travel packages and then if their play warrants, get qualified for comped airfare and accommodations.

Can a qualified player bring his spouse on a junket?

Sandy Crammer: In most cases, yes. However, we would review the play history of the qualified player to be sure it's enough to cover the added expenses of his spouse.

Jeffrey, can you give some examples of some recent trips your Independent Agents have scheduled for their customers to different Harrah's properties and their cost?

As an example, Sandy has a trip that is going out of Detroit on June 23rd for five nights for $449 to Tahoe or $419 to Reno.

Here are a couple of other dates and costs:

6/2-6/7 Peoria, IL for $369 to Tahoe or $339 to Reno

6/4-6/8 Atlanta, GA for $379 to Laughlin

6/21-6/25 Columbia, SC for $399 to Laughlin

Jeffrey, how can a player contact a local Independent Agent?

Jeffrey Hoss: You can call our call center at 1-800-HARRAHS and ask for the name and phone number of the Independent Agent closest to where you live.

The word 'comp' is short for 'complimentary.' In the gambling industry, comps are free stuff you get from casinos and other gambling companies to incentivize you to gamble with them. Generally, you get more comps based on how much you're gambling.

When discussing comps, it helps to understand the expression 'action.' Being 'in action' just means that you have money riding on a bet of any kind.

But 'action' also refers to the amount of money you have wagered. It can refer to the amount of money you wager over a period of time, too.

For example, if you're playing slot machines and betting $1 every time you spin the reels, you're putting $1 into action every time you spin. If you make 600 spins per hour, then you've put $600/hour into action.

Based on the odds behind the game and the payout odds, casinos can estimate the long-term expected losses based on your hourly action. They can then calculate a percentage of that to return to you in the form of comps.

When you're dealing with traditional land casinos, if you bring much action to the casino at all, you'll be assigned a casino host. This is the person at the casino responsible for keeping you happy so that you don't take your action elsewhere. Comps are the main tool a host uses to keep you happy.

Of course, not everyone has a host. You can also get comps almost automatically by signing up for the players' club and inserting the card into the machines as you play. Pit bosses also have the authority to reward you with comps when you're playing table games. In fact, the simplest and most common type of comp is the free drink. As long as you look like you're playing a slot machine, a cocktail waitress will bring you free drinks all night. (She'll be more attentive if you tip her well, though.)

This post explains the different kinds of gambling comps and what they mean to you as a gambler.

The Different Kinds of Comps Available

Comps are awarded in a hierarchy based on your value to the casino. The most basic comp is the free drink. Casinos have multiple motivations for gving you free drinks.

How Do Casino Hosts Make Money

For one thing, a gambler who's inebriated has lower inhibitions. He's more likely to gamble more money longer. And the #1 factor affecting how much profit a casino makes from a gambler is the amount of time he spends playing.

That's because casino games have an innate mathematical edge. This edge doesn't have a huge effect in the short term, because in the short term, anything can happen. But the law of large numbers suggests that the more bets you make, the closer your actual results become to the theoretical results.

Here's an example:

The mathematical expectation at blackjack is for you to lose roughly 1% of each bet you make on average over time. (This assumes you're using basic strategy while you play.) That means the casino expects you to lose an average of $1 every time you place a $100 bet.

In the short run, that's impossible. If you place a single bet at blackjack—which is the ultimate example of the short term—it's impossible to lose $1 on a single $100 bet. You'll lose $100, win $100, or win $150 most of the time. If you double down or split, you might win more–$200, $300, or even $400 wins are possible. You might also face a 'push,' which is a tie. Your bet is returned, but you don't win any money… that's a loss or win of $0.

None of those outcomes come even close to a loss of $1.

That $1 loss is an average over time–over a huge number of bets. If you make 10,000 bets at $100 each, you're likely to lose close to $10,000. Even with that many bets, it's possible to deviate wildly from the mathematical expectation.

If you're the casino, you want to get into the large number range as soon and as often as possible. This ensures your profit. The way to do this is to get players to make lots of bets for lots of money.

And providing free alcohol helps with that. In fact, it's a small price to pay for the extra action they see.

You can expect more than just free drinks, though. Free food is a small step up from free drinks. At a casino of any respectable size, you'll find multiple restaurants on site. The 2^nd most common type of comp is free food at one of the on-site restaurants.

The free food comp is usually awarded in the form of a coupon. You might have to put more money into action than you think to be awarded free food, but it sometimes depends on the generosity of the pit boss. It can also depend on what kind of rapport you have with the casino staff.

I once got into a spirited conversation with the cardroom manager at Planet Hollywood Casino in Las Vegas. They had a hot dog joint there called Pinks—I guess it's popular on the West Coast. Anyway, I was trying to convince the cardroom manager that he should buy everyone at the table hot dogs.

Apparently, at the limits I play, you don't get free hot dogs.

If you qualify for free food and free drinks, you're not far from qualifying for free lodging, too. Most casinos are also hotels, but even casinos which don't have attached hotels will get you lodging nearby—if you're gambling enough.

You can also get upgraded to a nicer room by virtue of the action you bring the casino. (You might also be able to get upgraded to a suite or a nicer room by tipping the desk person $20 when you check in, but that's not really related to comps.)

In fact, these 3 comps—room, food, and beverage—are so common that they have an abbreviation for it. Bettors who qualify for all 3 are called 'RFB' customers.

Notice something about all these comps, too. You're getting comps that seem to have a certain value. A drink is probably $5 at the bar at a casino. A meal is usually $15 or $20. A room can vary wildly in price, but is often at least $50, $100, or more.

But those are the retail prices for these comps. The casino doesn't pay $5 when they mix you a drink. Their cost for that shot of Crown on the rocks is probably closer to $1. The meal at the buffet that the public pays $15 for probably only cost the restaurant $5 to make.

And a hotel room that's sitting empty generates no money for the casino at all, so they might as well give it away. In fact, the Winstar in Oklahoma has such low occupancy rates during the week that almost anybody can get a comped room. You don't have to bring them much action at all, really.

Those are just the standard comps for regular down-to-earth players like you and me. High rollers, or 'whales,' as the industry calls them, are eligible for all kinds of free stuff. Many of these comps are customized based on what the host knows about the gambler's interests.

It's not unusual for a casino to pay for airfare and transportation to and from the airport for a big player. In fact, that's expected for any high roller.

But entertainment is another popular comp. If you like golf, shows, or sporting events, you can usually get a 'free' ride from the casino to go to those outings, too.

Rebates are common, too, even if you're not a high roller. For low rollers, rebates are often awarded in the form of coupons or free play. High rollers can receive cash or a check as part of their rebate.

The comps program is part of the casino's marketing plan. Most casinos make heavy use of direct mail to entice gamblers to return to their casino and play. If you're a member of the players' club at the casino, you'll inevitably receive standard comps in the mail.

Based on your interests and betting tendencies, you'll also get free offers for other perks in the mail, too.

Even low rollers can get free transport to and from the casino. I see buses taking groups of gamblers to the Winstar all the time. Many of the people riding those buses pay nothing for the ride, although they lose enough money at the casino to more than make up for that cost.

But calling these comps 'free' is inaccurate. You pay for these comps in the form of gambling losses, even when you're winning.

How Gambling Companies Do the Math That Makes Their Comps Program Profitable

Other than the free drinks and occasional free coupons sent in the mail, most casinos award comps based on your actual time spent playing. They account for how many bets per hour you make and at what amount when deciding how much to award you and when.

But comps aren't based on how much you actually lose. Instead, casinos calculate your comps based on your theoretical expected loss. This is a function of the house edge for the games you're playing, the time you spend playing, and how many bets per hour you're making.

Over the long run—and casinos serve thousands of customers per day—the casino has an excellent idea of how much your play is worth. If you're on a winning streak, you still get comps based on your action. The calculations are based on your expected losses, not your actual losses.

Here's how the casino calculates this:

You play slots exclusively, but you bet $3 per spin. You're an average player, so you're making 600 spins per hour. That's $1800 per hour you're putting into action.

If the casino knows you like the machines with a 95% payback percentage, they figure that in the long run they're going to make 5% of your hourly action—or $90 per hour. (5% of $1800 is $90.)

If you spend an average of 4 hours a day playing slots, the casino assumes you're going to lose $360 a day while you're there.

They then award you comps based on a percentage of that $360 per day.

How Can You Best Take Advantage of the Casinos' Comps Programs?

If you've heard of the books The Frugal Gambler by Jean Scott or Comp City by Max Rubin, you probably already know a little bit about becoming a 'comp hustler' or 'comp wizard.' These are players who learn to maximize the amount of comps they receive in exchange for their action.

One way to maximize the comps you get for the money you lose is to play a game with a tiny house edge. If you can play blackjack with perfect basic strategy, you can get the edge in the game down to 0.5%. The average player loses about 4% at blackjack, because the average player doesn't know perfect basic strategy.

Casino Junkets began in the mid-50's as a way to entice players to Las Vegas to gamble. Junket programs in those days were pretty straightforward. Casino operators would hire junket reps to fill a plane with qualified gamblers. These players would get free airfare, free hotel accommodations, free meals, free shows (and just about anything else they wanted) in exchange for their commitment to gamble a specific number of hours per day at an explicit average bet size. The casinos of course were gambling that the players would lose more than their out of pocket expenses for bringing, housing and feeding them.

That was the past. To get a fresh look at how junkets operate in 2005 and what benefits they provide players, I interviewed junket rep Sandy Crammer, owner of S&S Casino Tours, and Jeffrey Hoss, Director of National Casino Marketing, for Harrah's. What I learned about junkets might surprise you (it did me).

So let's begin by defining what exactly does a Junket rep do?

Jeffrey Hoss: First off, in the Harrah's organization we refer to our third party reps as Independent Agents rather than Junket Reps. Independent Agents send us customers (i.e. players) and in return they get a commission based on a player's theoretical. We have about 185 Independent Agents representing 47 states and 5 international countries that have a specific territory that they can market and promote our properties to their customers. In total our Independent Agents have scheduled about 300,000 customer trips annually to Harrah's properties.

I'd like for you to explain 'theoretical' to our readers but before you do, let me ask Sandy how she got started in this business.

Sandy Crammer: Before I started my own company, I ran a junket office as in-house employee for many years and I decided it was something I liked and wanted to try on my own. So my husband, Scott, and I started our own business and thankfully, Harrah's decided to take a shot with us four years ago to represent them. We have three employees in our company and currently we are one of the top 5 Independent Agent producers for Harrah's.

What areas do you represent for Harrah's?

Sandy Crammer: I currently represent Harrah's in Boston, MA; Providence, RI; Detroit, MI; and I'm expanding to Grand Rapids, MI.

How many package trips do you typically offer your clients?

Sandy Crammer: On a monthly basis I usually schedule into Atlantic City 2 flights from Boston (except 3 to 4 flights in the summer months), one flight from Providence, RI, and one from Detroit, MI. These are flights on a 120 seat chartered plane. Also every month we contract commercial airfare to Harrah's properties in New Orleans, Las Vegas, Reno, and Lake Tahoe. We usually do about 20 seats per month from our markets to those areas. We also run about 6 charter flights a year (130 passenger planes) to Laughlin and Reno/Lake Tahoe. In an average month we probably have 800 or more customers flying somewhere to Harrah's properties.

What are the play and front money requirements for a junket?

Sandy Crammer: There are no front money requirements. The play requirements depends upon what our guest is looking for, e.g. do they want to go on a charter flight, do they want their airfare comped, or are they driving to their destination and only looking for a room comp. We offer different packages in which some are totally comped and others it's buy one get one free or we charge the customer a nominal fee for the air and accommodations.

What would be the play requirement to get free airfare and free accommodations?

Sandy Crammer: As a rule of thumb, to get free airfare and accommodations, a quarter machine player is expected to play 5-6 hours per day (less time if playing dollar or higher machines) and for table game players its 5-6 hours per day at an average bet of $75+. If a player historically meets those requirements he or she would qualify for comped airfare and accommodations on one of our packages.

What if a player doesn't quite meet those requirements?

Sandy Crammer: They would have to pay a nominal fee for the air and room. For example, we recently offered our Boston and Providence customers the following 3 day/2 night discounted Atlantic City package that included round trip airfare from Boston (or Providence) airports, room accommodations, and transfers to and from the hotel for only $179 per person.

So how do you go about scheduling the trip you just mentioned and getting the plane filled with qualified players?

Sandy Crammer: I work with the marketing folks at Harrah's Atlantic City casino that support junket programs. They send me a schedule usually months in advance of dates that are available for me to bring in my customers. I decide which dates I want and Harrah's then charters the plane for me.

Jeffrey Hoss: Outside of Atlantic City, we have an individual dedicated to scheduling the 6 rotations in service for our casinos in Laughlin and Reno/Lake Tahoe. The schedule is determined in advance of three to four months and we work collectively with independent agents on dates and how they will market to them.

So now you are responsible to fill the plane with 120 qualified players. How do you do that?

Sandy Crammer: I have an extensive list of 20,000 or so casino players in our computer database. For each player I know their past play history as far as how many trips they have taken, how long they play, what their average bet size is, how much they won or lost and their theoretical. I then mail out about 7,000 letters per month to those players that have in the past met the play requirements that Harrah's is looking for. The qualified players that respond to our mailings get a seat on the plane. If I can't fill the plane completely with qualified players then I invite players on the next tier that would have to pay the $179 fee for air and room.

Jeffrey Hoss: It is actually working so well with Sandy's customers and others that we have made a commitment to bring in a 150-seat MD-83. Sandy has done such a wonderful job in marketing to her customers, we are confident that there is demand for additional seats.

How do you get all that play information on your customers?

Sandy Crammer: Every player that I send to a Harrah's property gets coded to me. At the end of each of my packaged trips I get a report from Harrah's that summarizes for each of my customers their entire play history during their trip. This information for each player in put in our database and it's how we determine which customers qualify for different packages that we might offer.

How Do Casino Hosts Make Money Now

Do you have the power of the pen in a casino?

Sandy Crammer: No, I can't approve comps for my players nor do I have access to Harrah's computers to review player information. But what I will do is contact the marketing department and tell them so and so in my group wants a comp to a specific restaurant. They would look up the playing history of that player in their computer database to see how many comp dollars the player has in his account. In most cases our players have accrued more than enough comp dollars based on their play to cover the cost of meals.

Jeffrey Hoss: Our Total Rewards program allows the customers to decide when and where they want to spend their comps. This alleviates the Independent Agent from making those decisions.

What benefits can an Independent Agent provide their customers?

Sandy Crammer: Besides providing travel arrangements for them, we provide our customers with just about anything else they need such as making reservations for dinners, shows, casino events, golf, ground transportation, you name it. Our guests know that they can call us for all their bookings at all of Harrah's properties. Plus someone from my office will travel with the group to assist them in their needs.

Jeffrey Hoss: A player who wants to visit multiple Harrah's properties can benefit from the services of an Independent Agent. They not only can provide the customer with services for say our property in Laughlin, NV but also our properties in New Orleans, Atlantic City, or elsewhere.

Are there different types of Independent Agents and do they have to be licensed?

Sandy Crammer: Yes, some are responsible for full charter aircrafts (which I am) while others Agents might only send a property an individual reservation (they are known as splinter reps). Independent Agents have to be licensed in all jurisdictions that they represent. For example, in the Atlantic City market we have to be licensed every 4 years and it costs $3,000. We must go through a detailed licensing process to obtain and maintain our Enterprise License. Other gaming jurisdictions that we do business in have a similar,but not as expensive, licensing procedure.

Jeffrey you mentioned that Independent Agents get paid a commission based on theoretical. Can you explain what that means?

Jeffrey Hoss: Our Independent Agents get a commission based on each player's theoretical or their expected long-term value to the casino. The latter is dependent on the players average bet size, length of play, and the casinos mathematical advantage over the player in whatever game he or she is playing. We track these variables for each player either through the use of a player's card if the player is playing slots or video poker or in the case of table play, our floor supervisors will rate the player and input the above information in our data base. We can then compute the theoretical for each player or roll the numbers up to a theoretical for all the players coded to Sandy. An Independent Agents commission is based upon a percentage of the groups theoretical with a sliding scale depending upon the total group expenses so the more expenses incurred by the group, the lower will be the Independent Agents percent commission. This way our Independent Agents would get penalized if their players didn't play up to their expected playing levels or were over comped for their play.

Why would a casino player use the services of an Independent Agent rather than a casino host?

Sandy Crammer: We consider ourselves one-stop shopping for all our customer needs and we have the ability to get it all done at more than one property. Because we represent a company like Harrah's we can offer our customers many more options. For example a player doesn't have to have a casino host in Atlantic City, another in Las Vegas, New Orleans, Reno, etc. They just call us for all their travel needs regardless of the destination.

Jeffrey Hoss: Our Independent Agents can market more than one Harrah's property to their customers. People like to travel more and visit different parts of the country. Harrah's owns or manages casinos in 12 different states including Arizona, California, Illinois, Indiana, Iowa, Kansas, Louisiana, Mississippi, Missouri, Nevada, New Jersey, and North Carolina. Our casino hosts and their staff at each property also provide support to our Independent Agents. So using the services of an independent Agent makes sense if you like to travel and visit more than one property.

Sandy, is there a turf issue for players between an Independent Agent and a casino host?

Sandy Crammer: Let me put this way. Our customers are coded to us internally in each property and it is how we get paid. If one of our guests starts dealing with a casino host we could lose that code and our commission payment. We spend thousands of marketing dollars every month for mailings to our customers to keep them informed of our upcoming trips and special events that are not reimbursed by the casino.

Jeffrey Hoss: We view this relationship similar to that of a pitcher and catcher, using a sports analogy. A property host will treat an Independent Agent's customer just as they would treat one of their own. Harrah's Entertainment prides itself on customer service and once they visit a casino, whether it is an invitation by Sandy or by a property host, we will do everything in our power to make their stay an enjoyable experience.

Have you ever had an issue with a customer not playing up to his or her expectations?

Sandy Crammer: It's rare when this happens and when it does it's usually because the player wasn't feeling well. You've got to remember that the players who get invited on our packages have a history of playing at a certain level over a certain time period. They usually maintain that playing level from one trip to the next.

What if they don't? What do you do?

Sandy Crammer: The player is dropped from our qualified list of players and if we invite them on another package trip they would have to pay the nominal fee we charge for air and room.

Do you have to be a high roller to go on one of your junkets?'

Sandy Crammer: As I mentioned, there are specific play requirements if you want your air and accommodations comped. However, we offer Tour and Travel packages to different Harrah's properties that require a nominal charge for air and hotel. We find that a lot of customers start out through our Tour and Travel packages and then if their play warrants, get qualified for comped airfare and accommodations.

Can a qualified player bring his spouse on a junket?

Sandy Crammer: In most cases, yes. However, we would review the play history of the qualified player to be sure it's enough to cover the added expenses of his spouse.

Jeffrey, can you give some examples of some recent trips your Independent Agents have scheduled for their customers to different Harrah's properties and their cost?

As an example, Sandy has a trip that is going out of Detroit on June 23rd for five nights for $449 to Tahoe or $419 to Reno.

Here are a couple of other dates and costs:

6/2-6/7 Peoria, IL for $369 to Tahoe or $339 to Reno

6/4-6/8 Atlanta, GA for $379 to Laughlin

6/21-6/25 Columbia, SC for $399 to Laughlin

Jeffrey, how can a player contact a local Independent Agent?

Jeffrey Hoss: You can call our call center at 1-800-HARRAHS and ask for the name and phone number of the Independent Agent closest to where you live.

The word 'comp' is short for 'complimentary.' In the gambling industry, comps are free stuff you get from casinos and other gambling companies to incentivize you to gamble with them. Generally, you get more comps based on how much you're gambling.

When discussing comps, it helps to understand the expression 'action.' Being 'in action' just means that you have money riding on a bet of any kind.

But 'action' also refers to the amount of money you have wagered. It can refer to the amount of money you wager over a period of time, too.

For example, if you're playing slot machines and betting $1 every time you spin the reels, you're putting $1 into action every time you spin. If you make 600 spins per hour, then you've put $600/hour into action.

Based on the odds behind the game and the payout odds, casinos can estimate the long-term expected losses based on your hourly action. They can then calculate a percentage of that to return to you in the form of comps.

When you're dealing with traditional land casinos, if you bring much action to the casino at all, you'll be assigned a casino host. This is the person at the casino responsible for keeping you happy so that you don't take your action elsewhere. Comps are the main tool a host uses to keep you happy.

Of course, not everyone has a host. You can also get comps almost automatically by signing up for the players' club and inserting the card into the machines as you play. Pit bosses also have the authority to reward you with comps when you're playing table games. In fact, the simplest and most common type of comp is the free drink. As long as you look like you're playing a slot machine, a cocktail waitress will bring you free drinks all night. (She'll be more attentive if you tip her well, though.)

This post explains the different kinds of gambling comps and what they mean to you as a gambler.

The Different Kinds of Comps Available

Comps are awarded in a hierarchy based on your value to the casino. The most basic comp is the free drink. Casinos have multiple motivations for gving you free drinks.

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For one thing, a gambler who's inebriated has lower inhibitions. He's more likely to gamble more money longer. And the #1 factor affecting how much profit a casino makes from a gambler is the amount of time he spends playing.

That's because casino games have an innate mathematical edge. This edge doesn't have a huge effect in the short term, because in the short term, anything can happen. But the law of large numbers suggests that the more bets you make, the closer your actual results become to the theoretical results.

Here's an example:

The mathematical expectation at blackjack is for you to lose roughly 1% of each bet you make on average over time. (This assumes you're using basic strategy while you play.) That means the casino expects you to lose an average of $1 every time you place a $100 bet.

In the short run, that's impossible. If you place a single bet at blackjack—which is the ultimate example of the short term—it's impossible to lose $1 on a single $100 bet. You'll lose $100, win $100, or win $150 most of the time. If you double down or split, you might win more–$200, $300, or even $400 wins are possible. You might also face a 'push,' which is a tie. Your bet is returned, but you don't win any money… that's a loss or win of $0.

None of those outcomes come even close to a loss of $1.

That $1 loss is an average over time–over a huge number of bets. If you make 10,000 bets at $100 each, you're likely to lose close to $10,000. Even with that many bets, it's possible to deviate wildly from the mathematical expectation.

If you're the casino, you want to get into the large number range as soon and as often as possible. This ensures your profit. The way to do this is to get players to make lots of bets for lots of money.

And providing free alcohol helps with that. In fact, it's a small price to pay for the extra action they see.

You can expect more than just free drinks, though. Free food is a small step up from free drinks. At a casino of any respectable size, you'll find multiple restaurants on site. The 2^nd most common type of comp is free food at one of the on-site restaurants.

The free food comp is usually awarded in the form of a coupon. You might have to put more money into action than you think to be awarded free food, but it sometimes depends on the generosity of the pit boss. It can also depend on what kind of rapport you have with the casino staff.

I once got into a spirited conversation with the cardroom manager at Planet Hollywood Casino in Las Vegas. They had a hot dog joint there called Pinks—I guess it's popular on the West Coast. Anyway, I was trying to convince the cardroom manager that he should buy everyone at the table hot dogs.

Apparently, at the limits I play, you don't get free hot dogs.

If you qualify for free food and free drinks, you're not far from qualifying for free lodging, too. Most casinos are also hotels, but even casinos which don't have attached hotels will get you lodging nearby—if you're gambling enough.

You can also get upgraded to a nicer room by virtue of the action you bring the casino. (You might also be able to get upgraded to a suite or a nicer room by tipping the desk person $20 when you check in, but that's not really related to comps.)

In fact, these 3 comps—room, food, and beverage—are so common that they have an abbreviation for it. Bettors who qualify for all 3 are called 'RFB' customers.

Notice something about all these comps, too. You're getting comps that seem to have a certain value. A drink is probably $5 at the bar at a casino. A meal is usually $15 or $20. A room can vary wildly in price, but is often at least $50, $100, or more.

But those are the retail prices for these comps. The casino doesn't pay $5 when they mix you a drink. Their cost for that shot of Crown on the rocks is probably closer to $1. The meal at the buffet that the public pays $15 for probably only cost the restaurant $5 to make.

And a hotel room that's sitting empty generates no money for the casino at all, so they might as well give it away. In fact, the Winstar in Oklahoma has such low occupancy rates during the week that almost anybody can get a comped room. You don't have to bring them much action at all, really.

Those are just the standard comps for regular down-to-earth players like you and me. High rollers, or 'whales,' as the industry calls them, are eligible for all kinds of free stuff. Many of these comps are customized based on what the host knows about the gambler's interests.

It's not unusual for a casino to pay for airfare and transportation to and from the airport for a big player. In fact, that's expected for any high roller.

But entertainment is another popular comp. If you like golf, shows, or sporting events, you can usually get a 'free' ride from the casino to go to those outings, too.

Rebates are common, too, even if you're not a high roller. For low rollers, rebates are often awarded in the form of coupons or free play. High rollers can receive cash or a check as part of their rebate.

The comps program is part of the casino's marketing plan. Most casinos make heavy use of direct mail to entice gamblers to return to their casino and play. If you're a member of the players' club at the casino, you'll inevitably receive standard comps in the mail.

Based on your interests and betting tendencies, you'll also get free offers for other perks in the mail, too.

Even low rollers can get free transport to and from the casino. I see buses taking groups of gamblers to the Winstar all the time. Many of the people riding those buses pay nothing for the ride, although they lose enough money at the casino to more than make up for that cost.

But calling these comps 'free' is inaccurate. You pay for these comps in the form of gambling losses, even when you're winning.

How Gambling Companies Do the Math That Makes Their Comps Program Profitable

Other than the free drinks and occasional free coupons sent in the mail, most casinos award comps based on your actual time spent playing. They account for how many bets per hour you make and at what amount when deciding how much to award you and when.

But comps aren't based on how much you actually lose. Instead, casinos calculate your comps based on your theoretical expected loss. This is a function of the house edge for the games you're playing, the time you spend playing, and how many bets per hour you're making.

Over the long run—and casinos serve thousands of customers per day—the casino has an excellent idea of how much your play is worth. If you're on a winning streak, you still get comps based on your action. The calculations are based on your expected losses, not your actual losses.

Here's how the casino calculates this:

You play slots exclusively, but you bet $3 per spin. You're an average player, so you're making 600 spins per hour. That's $1800 per hour you're putting into action.

If the casino knows you like the machines with a 95% payback percentage, they figure that in the long run they're going to make 5% of your hourly action—or $90 per hour. (5% of $1800 is $90.)

If you spend an average of 4 hours a day playing slots, the casino assumes you're going to lose $360 a day while you're there.

They then award you comps based on a percentage of that $360 per day.

How Can You Best Take Advantage of the Casinos' Comps Programs?

If you've heard of the books The Frugal Gambler by Jean Scott or Comp City by Max Rubin, you probably already know a little bit about becoming a 'comp hustler' or 'comp wizard.' These are players who learn to maximize the amount of comps they receive in exchange for their action.

One way to maximize the comps you get for the money you lose is to play a game with a tiny house edge. If you can play blackjack with perfect basic strategy, you can get the edge in the game down to 0.5%. The average player loses about 4% at blackjack, because the average player doesn't know perfect basic strategy.

When the casinos calculate your expected loss at the blackjack table, they assume you're an average player losing 3% or 4%. Since you're only expected to lose 0.5%, you're getting comps based on a theoretical loss that's actually overstated by a factor of between 5 and 10.

Another way to maximize the comps you get is to bet big when you're being rated by the dealer and the pit boss. 'Rating' players is how they estimate your hourly action. Fooling the pit boss is harder than you think.

I was playing blackjack in Kansas City for between $10 and $100 per hand, depending on the count. They rated me as a $10/hand player, even though I was betting more than that on a lot of hands. I complained, but I'm sure they realized I was counting. The last thing they were going to do is rate me higher when they knew I was counting cards.

(I was also a little drunk, so I didn't notice immediately when they started shuffling the deck after every hand. Counting cards does you no good if the dealers shuffle after every hand.)

Taking lots of breaks can result in fewer hands per hour than the casino estimates, which reduces your expected hourly loss by a lot. If you're at a blackjack table dealing 60 hands per hour, you could realistically only play 45 hands per hour by taking frequent bathroom breaks.

What effect does that have on your expected hourly loss?

It reduces it by another 25% or so. Instead of losing $10/hour, you might only be losing $7.50/hour. The casino might be estimating that you'll be losing an average of $40/hour and base your comps on that.

Expert video poker play can also result in smaller expected losses per hour. In fact, with certain video poker games, the combinations of comps with the tiny house edge can result in an overall positive expected value for the player. That's an advantage gambling technique, but it's not one you can realistically make a living at. The edge is too small, and games with those pay tables are usually only available for small stakes. You'd be lucky to make minimum wage playing video poker for comps.

How much of your expected losses can you expect back in comps?

It varies, but the casino calculates that they can afford to give you back 40% of your expected loss in the form of comps. You'll more often see 20% through the players' program if you're a low roller, but you can even increase that amount by taking advantage of coupons and 'happy hour' type promotions where you get 2X or 3X your standard comp rate.

How Do Online Casino Bonuses Work? Isn't That Another Form of Comp?

Online casinos can't serve you drinks or free food. They can't really provide you with a free room for the night, either. And since you're playing from home, they're unlikely to offer you free show tickets, either.

Instead, online casinos offer you sign up bonuses and ongoing deposit bonuses. These amount to free amounts of money awarded to your account just for making a deposit—either as a new player or as an existing player.

Bonus hustlers used to take advantage of these offers to generate almost guaranteed profits. A friend of mine once bought a jukebox by taking advantage of casino bonuses at a dozen different casinos and cashing out his winnings.

Online casinos have responded to this by instituting wagering requirements that make it almost mathematically impossible to come out ahead when taking advantage of a bonus. They also watch player behavior closely, and if that behavior resembles that of known bonus hustlers, the casino might refuse to pay you based on 'bonus abuse.'

The concept of wagering requirement seems more complicated than it is. Here's how it works:

You sign up at a casino that offers you a 200% matching bonus on your first deposit of $1000. You deposit $1000, input your bonus code, and the casino adds $2000 to your balance.

You now have $3000 to play with.

But the casino requires you to wager this amount 35 times before cashing out. They also restrict your play to slot machines. You can play blackjack, too, but only 10% of your blackjack wagers count toward fulfilling your wagering requirements.

And you can't cash out before fulfilling these wagering requirements.

Let's assume you want to play the slots. A good ballpark estimate for the house edge on a slot machine game is 6%, but who knows? (The casino does, but you don't.)

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To wager $3000 35 times means you must put $105,000 into action.

The expected loss on that much action is 6% multiplied by $105,000, which is $6300.

Since you started with $3000, the mathematical expectation is for you to go broke before fulfilling your wagering requirements.

On the other hand, if you play blackjack, the house edge is only 0.5%. But since the casino only counts 10% of those wagers toward your wagering requirements, you need to make $1,050,000 in wagers before cashing out.

0.5% of $1,050,000 is still over $5000.

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Again, that's more than your starting bankroll, so it's unlikely that you'll have money left over after fulfilling your wagering requirement.

You can, of course, get lucky and win more than you're expected to. I claimed a bonus at an online casino once for $1000, and I hit a $6000 jackpot on my 5^th spin of the reels on a slot machine game.

I was able to fulfill my wagering requirements and still have $2000 in profits.

But that's because I got lucky—not because I took advantage of a mathematical edge given me by the bonus.

In fact, had I eschewed the signup bonus, I could have cashed out the entire $6000. I wouldn't have been required to finish fulfilling the wagering requirements.

Conclusion

Casino and gambling comps are really cool, but they're also a tool that casinos use to get you to lose more money than you'd otherwise lose. Understanding how those comps work is the first step in making sure you don't get taken advantage of.

Some people learn how to take advantage of the comps system in such a way that they gamble practically for free. It's even theoretically possible to come out ahead because of the comps program. That's too much work for most people, but it's nice to know that it's possible.

The bottom line about comps is that the casino doesn't have your best interest at heart. They want your money.

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