Gambling With Business Intelligence

Business Intelligence (BI) is currently and has been for some time, the industry buzzword du jour. Microsoft hopped on that bandwagon with SQL 2005, which is why it included stuff like SQL Server Reporting Services and SQL Server Analysis Services (SSRS and SSAS). They doubled down with SQL Server 2008 R2, which basically provides enhancements to these BI pieces and very few enhancements to the actual database engine itself. As a DBA, I’m not too happy with Microsoft’s focus on BI within SQL Server. Lumping reporting and analysis products in with SQL Server just because they use data stored in a database doesn’t really make sense. Additionally, now DBAs are supposed to become experts in these new products when in fact, they have very little to do with database administration.

While I don’t have much desire to learn BI tools, I am fascinated by the potential information they can uncover. Databases can contain treasure troves of information, if you know how to pull it out and manipulate it. I see potential uses for BI almost everywhere. And when I think of BI, one place I always think of is Las Vegas.

I just got back from one of our annual trips to Las Vegas. My wife and I take a little vacation with her sister and brother-in-law and head out there for a couple of days each summer. We usually stay at the Wynn and we are members of their player’s club. For those not familiar, casinos typically feature a player’s club, where gamblers can sign up and then are given a credit-card like card. When you play machine-based games like video poker or slot machines, you insert the card into the machine and it tracks how much you bet. If you play table games, such as blackjack or roulette, you hand the card to the dealer, who typically passes it to the pit boss, who also tracks how much you bet. When playing tale games, your every bet is not tracked. Typically, the pit boss will note your bet size every 15 minutes or so. (Some people try to game the system by betting big when the pit boss is checking bets and betting small other times.) Based on how much you bet, how long you play, and what games you play, the casino then either gives you comps (free items), special room rates, or both. Unfortunately, the casinos typically don’t tell you how many points you need to get a particular comp, other than maybe the points needed for a free meal at the buffet, which seems to be the comp most people want. We usually get offers for free rooms, free casino credit, and free meals. At the Wynn, you earn 1 point for every $9 you bet. I would be willing to bet the cards are also used to track how long you play and what types of machines you play.

We play mostly video poker and, being the geek I am, I’ve spent an inordinate amount of time watching the display that shows you your player’s club points, noticing how long it takes to update, and generally thinking about the network and database that is handling all this information. My wife and I play using the same card number, which some casinos allow. We also typically sit next to each other when we play. I’ve noticed that, surprisingly, the points are not updated in real time. There is always a discrepancy between the points my machine displays and the points my wife’s machine displays. It seems you can force an update by removing your card and reinserting it though. As I said, my inner geek notices these things.

So the casinos have this huge database of information about the gambling habits of their customers. From what I can tell and what I have read, pretty much the only information the casinos use is how much money you cycle through their machines or how much you bet at the tables, and how long you play. Using this information, they tailor the comps and special offers they send to you. Big gamblers get better comps and better deals.

That’s a pretty cut and dried application of  business intelligence. But I think, with a little amount of work, they could go one better.

If you look at the machines, the player’s card reader looks like a box that is added on to the video poker machine and sits on top of it. This makes sense because not every casino will need the player’s club functionality. This also means that, although the card reader is an optional module, there must be some communication between the video poker machine and the reader – the machine needs to tell the reader how much the gambler has bet. (Although not necessary for my proposal, the communication also goes the other way – from the card reader to the video poker machine. When given free casino credit, it typically shows up on your player’s club card and, after you play a hand, the credit is deducted from the card and put back in to the machine.)

Now comes the magic.

With video poker, each game variation and payout table has a correct or optimum way to play each hand so that the gambler gets the maximum return from the machine. (A good list of correct strategies can be found here.) A smart machine could track whether the gambler played the hand correctly or not. That information could be fed back into the player’s club database and used in the determination for what special offers to present to the gambler. If a gambler plays correctly 97% of the time, then he’s probably not making the casino a whole lot of money. He’s going to get close to the optimum return from the machine (which still makes money for the casino). However, if you have a player that only played the hands correctly 85% of the time, THAT gambler is making the casino lots of money. You’d want to have that person coming back often, so you should send them more or better offers to entice them back.

This would require some software changes to the video games and the player’s club database backend, but I think they are all relatively easy changes. This method also would only work for games where there is an optimum strategy to follow – video poker, video blackjack, etc – and not slot machines or purely random games such as craps or roulette.

I’ve asked some people who know people in the gambling video game manufacturing industry and the casino industry if any casino is doing this and the consensus seems to be no. I think this is a prime opportunity for a manufacturer to add a distinguishing feature to their machines and a wonderful example of leveraging business intelligence.

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