Wednesday, August 31, 2011

With Respect to Gambling in Casinos There Are Two Groups

The Dismal Political Economist is One Group and Everyone Else is in the Other

Mainland Chinese tourists are bused into Macau’s casinos
Mainland Chinese tourists are bused into
Macau’s casinos Dominic Nahr/Polaris

Even with a recession and stagnation gripping the western world there is still one industry that is thriving, casino gambling.  And nowhere as Business Week reports is it thriving more than on the island of Macau.

Macau’s gambling revenue is now four times larger than that of Las Vegas, and the gap should keep growing as more casinos open. MGM China Holdings, which operates one casino in downtown Macau and plans another on the Cotai Strip. . . . First-half profits rose 380 percent, to $236.6 million, the company reported on Aug. 19, with sales doubling.

And it is a pretty nice place and getting nicer.

Macau at night - ever wonder where the money
came from to build this?

Everything about the new Galaxy Macau casino and hotel is big. The $2 billion complex, which opened in May, has three hotels with a total of 2,200 rooms. The gaming floor is 39,000 square meters, with 600 tables and 1,500 slot machines. A rooftop beach features 350 tons of white sand and a 4,000-square-meter wave pool

And it is doing wonders for the city of Macau

Many non-gaming companies are struggling to find and keep employees. “It’s hard to run a business,” says Jiji Tu, managing director of MSS Recruitment, a local employment agency. . .
The labor shortage is holding back Ronald Cheung, who oversees Midland’s six offices in Macau. The property agency opened a new branch in early June, and with demand for real estate so strong, Cheung says he would like to open more if only he could find the people.

Leaving The Dismal Political Economist to ask the question, Why?  Casino gambling is not gambling.  The guaranteed winners are the casinos, the guaranteed losers are the players.  Yes, not everyone loses, but the winners are so few that the losers easily finance the elaborate playgrounds in which they sustain their losses.

The entertainment value of gambling is the potential winnings.  But once a person understands basic probability theory, the joy goes away.  Winning is pure luck, and the luck is not on the player’s side.

The Dismal Political Economist has taught statistics and probability during his university teaching days.  Here is his ideal final exam for Probability Theory 101.

How The DIsmal Political Economist
Sees Casino Gambling

"Each student is given $100.00 and a bus ride to the local casino.  Once inside the student’s behavior is observed.  Any student that plays any game with the $100.00 automatically fails the course."

This exam cannot be given, of course because no student would ever pass the course and the world would be deprived of statisticians who can design casino games that guarantee winnings for the house.

[As a public service do not forward this Post to any persons starving in the sub-Sahara region.  They might not understand world priorities the way we do.]


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