PLAYING IT SMART by ALAN KRIGMAN

Are casinos bringing "caveat emptor" back?

Many solid citizens have been around enough to remember when there was no such thing as consumer protection. "Caveat emptor" (let the buyer beware) was a fact of life. That's been largely reversed. Today, the general populace can have confidence in the integrity of most businesses with whom they trade, and legal recourse exists against vendors who violate implicit as well as explicit public trust. Laymen need not be experts in the details of the products or services they buy to get what they pay for.

For instance, pretend you celebrate a special occasion at an outrageously expensive restaurant noted for Kobe beef. Maybe when you enter, the maitre'd guesses from your polyester suit that you're a yokel who wouldn't know a Kobe steak from shoe leather buried in meat tenderizer. You'll still get the Kobe beef.

Likewise, make believe you're shopping for a diamond ring. A connoisseur might know at a glance that the rock is diamond, not paste, and of the stated weight and grade. You have to take it on faith, but can reasonably assume it's the genuine article.

What about casinos? In the main, regulations are stringent and well-enforced. Patrons can accordingly be that confident the games are honest. Dice aren't loaded, cards come from decks that are full and unmarked, roulette wheels are balanced and don't have mechanisms that let dealers choose where the ball will land, and so forth. More, in most jurisdictions, the law strongly discourages the joints from allowing players to gamble if they're soused, let alone inducing them to get that way. It similarly deters the bosses them from trying to persuade anyone to gamble.

Once upon a time, some regulatory agencies also prohibited games with house edge so high that players making repeated bets had little chance of finishing with any money -- barring an extremely rare jackpot or hot streak. In principle, recreational gamblers, out for some fun and excitement, didn't have to spend weeks studying games and bets to learn which had reasonable edges. They couldn't be protected from a lack of common sense. But they could ostensibly go to a casino with a plausible expectation of a decent shot at making a few bucks regardless of what they tried.

Some bets were always worse than others, of course. The slots were the traditional culprits. Alternate machines might have widely-disparate edges, say 14 percent (86 percent return) on one and 1 percent (99 percent return) on another. Experienced slot buffs knew that, in general, the lower the denomination of the game the worse the edge. Neophytes were typically unaware of this. So they fed the nickel slots thinking they were just like their dollar or hundred dollar cousins except in terms of scale.

At a nickel a pull, a $20 bankroll can buy lots of action despite the edge. You might be doomed to wipe out, but a $20 loss isn't excessive for most casino-goers. A contemporary nickel machine might have 10 lines taking 10 coins each, however. That's $5 per pull when played at full bore, which isn't uncommon. But edge is still based on five-cent standards. Gambling like this can chew up $2,000 as easily as a nickel a round can consume $20.Side bets at table games offer another example. They're tempting because small bets can return big bucks, albeit infrequently. The archetype of the side bet is at Caribbean Stud. Depending on the value of the progressive jackpot, $1 can win $50,000, $100,000, or more. Edge depends on the value of the jackpot, but averages over 26 percent -- $0.26 per round. Much worse, effectively, for the vast majority of players who don't hit the jackpot. A few hours, several hundred rounds, can badly erode a bankroll by the steady loss of what's supposed to look like chump change. Worse, are the casinos seducing the suckers by the flashing numbers showing huge payoffs for small bets, whose chances of hitting are far lower than most people can even conceive.

Do these examples indicate a betrayal of public trust by casinos? Or do their patrons get what they deserve if they don't have gambling expertise? As the beloved bard, Sumner A Ingmark, said:

Don't think that from knowledge of edge you're exempt, or
The bosses will teach you 'bout caveat emptor.

(c) 2008, ICON/Information Concepts Inc

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