“For the game-starter theory to be [successfully] supported, the match-play variable would have to produce a significant and positive effect on cash drop, and it did not … Not only does this result suggest that the property is not recovering the coupon offer cost; it suggests the possibility of bankroll cannibalization.” —Principles of Casino Marketing (Kilby and Lucas, 2008)

Match play coupons are the widest-used promotion tool utilized in live table games by the casino. Match play has been used to attract customers to table games for approximately three decades; however, in the last several years, cost analysis conducted on the use of match play has raised some serious questions as to its degree of successfully increasing table game revenue. In many cases, it can be argued that the cost of match play coupons outweighs the monetary return from increased table play. A number of casino marketing regions are experiencing tremendous coupon cost due to the popularity of the coupon as the primary marketing tool. Washington state, for example, is presently fighting a recovery battle from a promotionally induced “death spiral.” Excessive use of match play coupons is due to management’s belief that the coupon cost is absorbed by the table game results, and carries no direct expense to the casino. This misunderstanding costs the casino industry an enormous amount of money every year. In order to diminish this expense, management needs to understand the cost, and what options are available to them if they wish to minimize the cost of their match play coupon strategy.

The Basic Cost of Match Play
There are several methods currently used to calculate the cost of the match play coupon. I prefer to use the method outlined in James Grosjean’s white paper on coupons, “Beyond Coupons.” In essence, the match play coupon provides the user with a double payment when the coupon wins, a single loss when the coupon loses and the ability to reuse the coupon on all tie or push situations. Table 1 indicates the cost of the match play coupon when wagered on various games and wagering options. It’s assumed that the match play coupon doubles the return of the live chip wager.

Table 1: Calculated Cost of Match Play Coupons
Table 1: Calculated Cost of Match Play Coupons
In order to calculate the cost of the coupon, multiply the listed game/wager coupon cost by the face value of the coupon. This will compute the cost of the total wager; both coupon and the live chip wager. For example, a $10 match play coupon wagered on a multi-deck, hit soft 17, blackjacks pay 3:2, blackjack game by an average player, the cost of the coupon would be $4.80 ($10 MP coupon X 0.480 = $4.80). As explained previously, there are several methods used to calculate the cost of match play. Although there is little variance between the different calculation methods, I’ve found that Grosjean’s recommended method produces the truer cost of the coupon, especially on coupons wagered on multiple payoff bets.

Use Match Play on Even-Money Wagers Only
By reviewing the different costs in Table 1, it should become apparent that the multiple payoff wagers increase the cost of the coupon. This holds true even when the mathematical house advantage stays the same with both even-money and multiple payoff bets, as it does in the game of roulette. The cost of the match play coupon on the even-money bets is 0.420; however, the 2:1 wager is subject to a cost of 0.580, while the 35:1 wager is subject to a cost of 0.870. The numbers make it easy to see that multiple payoff wagers are much more expensive than even-money wagers.

What about utilizing match play coupons on pass line and come bet odds? The object of enforcing most match play coupon restrictions is to keep the cost of the coupon under 0.500, or 50 percent of the coupon’s face value. Since odds are not subject to a mathematical house advantage and they are paid on a multiple rate, management should stay away from allowing coupons on the odds like the plague. Coupons wagered on the odds will cost the casino 0.667 on the 4/10, 1.200 on the 5/9, and 2.727 on the 6/8!

To immediately lower the cost and guarantee that the cost of the coupon will stay under 0.500, management needs to consider only accepting match play coupons on even-money wagers. There’s a simple alternative to consider; have all the match play coupons conditioned with the following statement:

“Winning coupons pay equal to the face value (exception: baccarat banker wager pays 19:20).”

By conditioning all the match play coupons in this manner, it doesn’t matter where the coupon is wagered; it will always pay a maximum of its face value. For example, if a $10 coupon is played along with $10 in live chips on a single straight-up number in roulette, if it were to win, the wager pays $350 for the live chip, and $10 for the coupon. This is a procedure that management should strongly consider.

Optimal Procedures for Match Play In Blackjack
What is your casino’s procedure for handling match play coupons in blackjack when the player receives a winning blackjack? Don’t know? Don’t feel bad. Most executives aren’t sure either. In many instances, management institutes the use of match play coupons without setting the basic rules for their use, or providing training for the pit personnel. Before instituting a match play program, you need to develop a game plan for handling different situations that arise, especially in the game of blackjack.

First consideration: On a player two-card blackjack, what multiple rate does the dealer pay out on the match play coupon? Some casinos have opted to pay even-money on the coupon. Why not? It’s a free offering anyway. The coupon offer where the coupon pays even-money helps diminish the cost. The average blackjack player on a multi-deck is subject to a coupon cost of 0.460 when receiving even-money, down from the previous cost for the same player and game of 0.482 where he receives 3:2 on both the coupon and live chip wager.

Table 2: Advantage of Taking Match Play Coupons on Tie Situations
Table 2: Advantage of Taking Match Play Coupons on Tie Situations
What about other situations such as double downs, split hands and also with insurable hands? Following is the recommended procedure for decreasing the coupon cost during critical hand decisions:

• When doubling down with a match play coupon, the customer should only be able to increase his live bet. For example, a player has a double down situation while wagering a $10 match play coupon along with $10 in live chips. The player should be allowed to only double for $10. The opportunity to double down is a player advantage. By allowing them to wager live chips to cover the coupon as well as the live bet is equivalent to allowing them to double-double down.
• Splitting is complicated since the player will split to both lose less money (example, 8-8 vs. T), and to make more money (example, 8-8 vs. 6). In order to diminish the cost of the coupon, anyone playing a coupon should not be allowed to split their hand. A less restrictive casino may opt to allow the player to split aces for the value on the live chips, but not allow re-splitting if that option is part of their standard rules of blackjack.
• The match play coupon causes a problem if the customer is allowed to take even money on their blackjack against a dealer’s up-card (3:2 games). This can become extremely costly if the casino pays 1:1 on the match play coupon during blackjacks. The simple solution is to require the player to wager on the insurance bet with live chips (up to half the combined value of the coupon/chips). If the dealer has a blackjack, the insurance is paid and the bet and coupon are lost. If the dealer doesn’t have a blackjack, the insurance money is lost, and the blackjack paid accordingly.
• What about surrender? If you offer surrender, what is the best procedure for handling match play? If the player wishes to surrender his hand, have the dealer take half the live chips and the coupon as well. You need to be careful when using match play coupons with surrender. If you were to take the coupon, but leave the player with all of the live chips, management opens the door to many more surrender hand options for the knowledgeable player. This could provide the knowledgeable player with a much greater return on his coupon…and you a much greater cost.

Match Play Coupons are lost On All Tie or Push Situations
If management is in a position where they have to offer match play coupons to be competitive, but wish to decrease the cost of the coupons as low as possible, management may consider the option to take coupons on tie or push situations. In Table 2, the basic strategy player on a multiple blackjack game (3:2, stand on all 17s) will cost the casino 0.516 of the face value of the match play coupon. However, if management decides to take any coupon played on a hand that results in a push, the cost drops considerably to 0.471. By taking the coupon on all push hands in blackjack, it truly becomes a “single-play” instrument.

This procedure would be perceived as a “negative” step by management, and should only be consider in extreme situations.

References
Kilby, J; & Lucas, A. F. (2005). Principles of Casino Marketing. Okie International: Norman. ISBN:
978-0-98173999-9-8.
Grosjean, J. (2010). Beyond Coupons. Las Vegas. Unpublished white paper.

Leave a Comment

Your email address will not be published. Required fields are marked *

Scroll to Top