Part 4 - House Edge Tax and the REAL House Edge
Every casino game is designed to have a fixed house edge (tax) with optimal play. Let me repeat that, WITH OPTIMAL PLAY! When was the last time you saw any type of optimal play at a table game or video poker machine? In fact, there isn't a single person in any casino that can even tell you what the optimal play is on any game except the aforementioned, extremely rarely found Advantage Player. This house edge tax is the price that patrons pay for the opportunity to try their luck at beating the casino. Doesn't it make sense that if you, the casino, have a fixed house edge that you would want to collect your house edge tax as quickly as possible? If you have a 1% house edge and handle $1M in action, you WILL (in the long run) net $10,000. In fact, if you have a 1% house edge and handle $1M in action, you WILL (in the long run) net more than $10,000. Perhaps that amount in a more realistic light is $20,000 and if the patrons are uninformed (I'm trying to be polite) or perhaps, if drunk enough, that $1M handle with a 1% house edge WILL yield $100,000. Consider simple games like Video Poker, Blackjack, Ultimate Texas Hold'em and Three Card Poker. People who always go for the royal on Video Poker, stand on 14 vs 10 at Blackjack, raise 3x at Ultimate Texas Hold'em and play with J high at Three Card Poker abound and pay tax at an extra high rate for their ignorance.
I'll give you one simple example that most everyone that has spent time in a casino has witnessed. Several times I have seen the dealer accidentally and blatantly exposed her hole card to the entire table at blackjack. For this example I will tell you that the dealers two cards together total 20. The pit boss graciously asks each player to play their hands with this information in mind (knowing that he still holds the upper hand). As each player is asked what they would like to do, every one of them is afraid to hit their total of less than 20. Why? Hell, I don't know. Human nature? The book says so? I would rather buy all the hands at the table than go through the agony of watching people afraid to fall on their own sword knowing that the house slay them instead. I've even asked, "You know you have 19, right and that you will lose if you stand?". To which they reply, "Who hits 19? There are only two cards that will save me. I'll stand.". Well, I hate to tell you but you have approximately a 15% chance of at least breaking even if you hit and 0% chance if you stay. Would you rather play Russian Roulette with one bullet or no bullets?