Sands Casinos Lose Money, Wish You Weren't So Good At Blackjack

Las Vegas Sands Corp, the world’s largest casino by market value, lost a bunch of money because you people are really good at blackjack, says Bloomberg.

At the Las Vegas Venetian, earnings dropped 19 percent to $58.3 million. The casino’s winning percentage in baccarat, blackjack and other games was 14.7 percent, below its forecast range of 20 to 22 percent and last year’s winning percentage of 23.4 percent. Gamblers also won more than forecast at the Sands Macao.

The lower winning percentage accounted for a $33.5 million shortfall in earnings before taxes and other costs, said Lawrence Klatzkin, an analyst at Jefferies & Co. in New York.

Whoops. Gambling is risky, even for casinos.

Las Vegas Sands Posts Unexpected Loss as Gamblers Win (Update4) [Bloomberg]
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  1. INconsumer says:

    i love LV!

  2. INconsumer says:

    and those gondola rides are definatly worth it. but the pictures they want you buy of you on them is not.

  3. 44 in a Row says:

    This sounds like it’s probably a big baccarat loss. There are people who play baccarat at tens of thousands of dollars a hand (and more, even), and a lucky streak can impact the bottom line pretty significantly. It might be a couple bit blackjack losses, but the really huge-money players tend to stick to baccarat.

  4. roche says:

    How is not making as much money as you were hoping to make considered loosing money?

  5. Franklin Comes Alive! says:

    Well, since perfectly-played blackjack has a house edge in the neighborhood of 0.5-1%, I’d say a lot of people still need to get better.

  6. Franklin Comes Alive! says:

    Well, since perfectly played blackjack has a house edge in the neighborhood of 0.5-1%, I’d say there’s a lot of people out there who need to be better at blackjack.

  7. Franklin Comes Alive! says:

    Whoops, sorry about the double post. The comments system gave me something about blowing a cabbie for weed, so I think something’s a little messed up…

  8. INconsumer says:

    @Franklin Comes Alive!: wow man. or woman i hope. and if you are indeed a woman, i’d like to get to know you…….or just exchange goods.

  9. TechnoDestructo says:

    @44 in a Row:

    A lot more people play blackjack. Even a small change in the average skill level of the players will add up REALLY fast.

    @roche:

    They need to pay the dealers. They also have non-gambling expenses that they need to make up for. Not all their winnings are pure profit.

  10. iamme99 says:

    Ha! If you count on $$ coming in because they did before and you spend what you planned to make, not what you did make, then you are in the hole.

    Sort of like people who brought houses and borrowed on equity gains thinking real estate always went up. or people who buy stocks like GOOG thinking it can never go down.

  11. CumaeanSibyl says:

    I just love that people are playing baccarat outside of James Bond movies.

  12. 44 in a Row says:

    A lot more people play blackjack. Even a small change in the average skill level of the players will add up REALLY fast.

    It’s possible, but highly unlikely. Big shifts in quarterly wins/losses like this are almost always due to a few individuals playing very, very high stakes; there’s a reason that the quarterly reports of gaming companies often break baccarat out into its own section. If a guy playing $1 million a hand (which, believe me, those exist) goes on a streak, that hits the bottom line pretty hard. Either that, or the casino just had really bad luck this quarter, and the people playing there happened to have good luck. But I doubt that hundreds of thousands of average Americans, who last time I was in Vegas had nary a clue how to play most table games, suddenly all became basic strategy experts.

    But I’ll volunteer for a research trip if Gawker Media wants to pay.

  13. 44 in a Row says:

    Also, Sands is much more affected by volatility at individual casinos than the other gaming companies are. MGM Mirage and Harrah’s each own dozens of casinos, so a bad streak at any one is generally balanced out by the others. But the Sands only owns the Venetian in Vegas, and the Sands and Venetian in Macao, which means that a bad couple months at one casino affects the entire company.

  14. uricmu says:

    Casinos win in Blackjack not just because the odds are skewed (by just about half a percentage point) but because most people don’t bother to learn basic strategy or come with a card to the table, so they play based on intuition at 5 percentage point.

    The Venetian seems to attract an older, regular, and more sophisticated crowd (i.e., rich) than the popular strip resorts (e.g., Paris, Bally’s, MGM) and even places like the Bellagio which cater more to younger tourists. The younger tourists gamble drunk based on “intuition”. The older folks know their basic strategy.

  15. BigNutty says:

    Definitely Baccarat is the reason. I too have watched many $100,000 to $1,000,000 dollar players and that is the major reason for any unusual changes in the bottom line.

    Blackjack is responsible for minor changes. Of course employee theft (those eye in the sky camera’s are more for employee’s than customers) is a problem if undetected and can add up fast.

    My friend was a blackjack dealer at the Tropicana in Vegas (during my early gambling days) and would have all his friends come in during his shift and he would deal the cards his way, ignoring our hit or stay commands. The money was split up later. He was finally caught, blackballed and wound up working at a car wash. What an idiot. What an idiot I was too.

    This was before the days of the device that lights up telling the dealer if he has an Ace or Face Card.

  16. mac-phisto says:

    bah! no blackjack for me. i’m that guy that the anchorman screams at b/c i “don’t know how to play”. more like i’m the guy that always draws 14. say what you want about “the system” & “taking one for the table” – w/ me, it’s more like take them all for the table.

    i’ll stick to me dice. never had mr. big shot on a $5 table scream at me b/c of a crapshoot.

  17. KJones says:

    I remember a Mad Magazine item once saying that it’s stupid to play in a casino that just opened a new wing. Do you think they got that money from the winners?

  18. Jesse in Japan says:

    It’s actually legal to count cards (the casino can kick you out, though). The catch is, it IS illegal to use any kind of computer or mechanical device to help you count cards, that is to say, you have to do it in your head. Like in Rain Man.

  19. ThingvsThing says:

    I blame blackjack.

    I don’t know about baccarat, but a blackjack cardcounter can make a slow and steady profit (.5% to 1%) against the house. And someone playing basic strategy nearly breaks even. I think there may be more skilled blackjack players in the mix, and that is what is throwing the profits. The casino may have anticipated greater earnings from people who “go with their guts” and instead found that the growth of online gambling has lead to a population of nerds that has looked into the play statistics.

  20. INconsumer says:

    i’m with roche, how is not making as much as forcasted considered a profit loss? don’t you have to have the profit first, before you can lose it? i go to lv every year and usually win (not too much though). but i’m a roulette player, more exciting to me. plus its hard to find and empty seat playing black jack for $5-$10. believe it or not, the $.25 blackjack machine actually pays pretty good. i usually almost double my money on those things. (of course im only talking $10-$20 on machines. i save my wad for marble.

    on a side note, anyone ever play chuck a luck? that game is fun!

  21. Trai_Dep says:

    @BigNutty: “he would deal the cards his way, ignoring our hit or stay commands”

    i.e., he played smart. Sad to think that he had to get his friends to “cheat” merely by playing basic strategy. Just counting face cards in your head and having semi-hard figures where to do what helps improve your odds significantly.

  22. VTSquire says:

    counting card in blackjack is easy. 3q/A in roulette is just as easy. It’s kind of a wonder why more casino’s aren’t earning as much as they predict.

  23. Parapraxis says:

    oh boy, here come more 6:5 payouts on blackjack!

  24. JustAGuy2 says:

    @VTSquire:

    Counting cards isn’t that hard (although beyond the capabilities of most people). Doing it without getting caught is a lot harder.

    As for 3Q/A roulette, well, if Sands had more customers who believed that it worked, they wouldn’t have missed their profit #s.

  25. JustAGuy2 says:

    @trai_dep:

    What he was likely doing was, in hands where he needs to check the hole card (BigNutty mentioned that this was in the pre-prism or light days), checking his hole card, and then either hitting or staying people based on that knowledge. It really is cheating.

  26. Her Grace says:

    @Jesse in Japan: Not all autistic people are good with numbers, nor do they all possess a savant talent. The guy that the movie Rain Man was based on, though, is quite incredible.