Casinos and Luck

Every time I’m in a casino, I need to remind myself that some gaming stocks have been extraordinary performers over the long haul. There’s a reason why they’re so profitable. Thanks to the laws of probability, a game that’s even slightly in the house’s favor can be very lucrative. Still, I was shocked to run across this:

Casino Blames Income Drop On Gamblers’ Luck
UNCASVILLE, Conn. — Mohegan Sun officials said the casino’s net income in the third quarter dropped 89 percent compared with the same period last year, and they’re placing some of the blame on gamblers’ extraordinary luck.
The Mohegan Tribal Gaming Authority reported net income of $5 million Thursday for the three months ending June 30.
Mitchell Etess, Mohegan Sun’s president and chief executive officer, said the casino had an extremely long streak of bad luck.
Gamblers played about $611 million at table games during the quarter, a 6.4 percent increase. The casino kept about 11.6 percent of that gambling money, nearly 5 percent less than it did during last year’s quarter.
Table game revenues dropped more than 25 percent to $75.3 million in the third quarter from the year-ago period.

Unless there’s more to this story, I don’t see how it’s possible that a casino can have a run of bad luck. The only explanation I can think of is that there have been several very large bets that have gone the wrong way. Outside that, with a sample size that large, the house should barely see any fluctuation in its take. If I were the casino, I’d be keeping a closer eye on its dealers.

Posted by on August 4th, 2008 at 9:47 am


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