The Future of Table Games? Part 1

While in Las Vegas several years ago, I noticed something that I had never seen before - what I like to call a "virtual dealer".  What looked like a multiplayer arcade style video game from my childhood was actually a Blackjack table.  The table was one large flat-laying screen on which all of the (digital) cards were dealt, players had buttons in front of them that were used to make their decisions on the hand, and a vertical screen was dedicated for the virtual dealer.  Could this be the future of table games?

Before then, the only completely automated table game I had seen was Roulette.  The first Roulette machine I had seen looked very similar to a slot machine - it was for a single player, and there was no real gaming equipment like chips or a wheel.  I never played it, but since they were right next to a bank of normal slot machines, I thought that the casino was able to pre-program the return (money paid back) like they do on other machines.  Looking back, this probably wasn't the case, but let's face it - unless you really believe in dealer signature, visual ballistics or things like that, Roulette isn't the greatest game to try and win at anyway.

Then there was the next step up - same concept, only with a real Roulette wheel.  Right now, I do not recall if a dealer was required to spin the ball because the game was closed.  This had more closely resembled the type of Roulette I was used to seeing, as multiple people could bet on a single common outcome.  There was no actual table with a layout, but several touch-screens had been setup around the wheel where people placed their wagers.  At the time I thought, "hey, that's pretty cool... I wonder what they'll think of next."

The next thing was the virtual dealer.  That's where they crossed the line.  I'm a real big fan of technology advances, but I believe that this was an example of poor application.  On the surface, it doesn't take much thought to see why virtual dealers may be a good idea.  Dealer errors are eliminated - no more miscounting hands or taking bets that push or win, et cetera.  Additionally, the game is faster - the pace only determined by the players.  But by far the biggest plus for the casino must be the savings on the employees they don't have to pay to run the games.  Virtual dealers don't need breaks, get sick, need benefits paid to them, or require floor supervisors nearby.  Faster games and lower operational costs lead to increased profits, right?

Wrong... well... let me rephrase that... not always.  All else being equal, faster games do lead to an increase of expected profits for the casino.  Operational costs are a bit trickier.  With a fixed number of customers, it may be advantageous for the casino to have more tables open (and therefore increased operational costs) than necessary to accommodate these players.  For example, one player on each of six tables can be better than those same six players on one table (this concerns yield management, which might be a topic for a future article).

Where was I?  Oh yes, virtual dealers.  The problem with virtual dealers is that they are replacing real people.  People are a very important part of many service based industries... just ask any marketer.  Have a question about the game?  Good luck asking the virtual dealer.  Want to have a conversation?  It might be a bit one-sided.  Okay, I'll be the first to admit that sometimes you don't get the friendliest real dealer, and this is something that casinos need to pay particular attention to.  Variability in service delivery is just something that comes with the territory.  It should be carefully controlled, but it's a relatively small price to pay for having real people involved.  What about the price players don't pay?  Players don't tip virtual dealers... but assuming the same monetary outcome, I'd rather be entertained by a good dealer and tip them rather than save a few (more than a few?) bucks and interact with a machine.  What does this mean? 

It means that in my opinion, fewer people will be willing to play on these electronic tables when faced with an equal choice of a real live game... and that means lower profits from these tables.  Remember when those continuous shufflers started appearing on lower limit Blackjack tables?  Same kind of effect.  The casino was able to increase the potential hands per hour (and perhaps deter card-counters) by eliminating hand shuffling, but many people were reluctant to play on those tables if they could find a "normal" one.  Did the gain in number of hands offset the alienation of some players because of the shuffler?  Honestly, I don't know - I don't have the data on that.  I also don't know for sure if these electronic tables are giving casino managers what they expected.

Some may argue that the lower operational costs of electronic tables can translate into lower table limits for players.  That's a valid point.  My counter-argument is this: Internet casinos.

Click here for Part 2...

Do you have a topic or question related to casino gaming that you'd like to see discussed on this blog?  Send me an email at FogOfGambling@gmail.com and let me know!