Optimizing Roulette’s Pricing Strategy
Roulette is one of the most prominent and recognizable table games in a casino. As one of the oldest casino games, it was first played in France over 300 years ago. However, its popularity varies around the world. Outside of the US, it is one of the most played table games, particularly in Australia. It’s not uncommon for a large casino to have up to 50 Roulette tables. Even for smaller operations in North America, a lot can be learned and applied to optimize Roulette.
Yielding Roulette & Challenges
Roulette has a number of nuances particularly when it comes to yielding:
- Table Pricing
- Player Behavior
- Slow Game Pace
When pricing for Roulette, what are we trying to accomplish as an operator? The main goal should be to change player behavior whether to optimize the number of players per table or perhaps to spread them out across several tables. When a Roulette table is priced-up, let’s say from $10 to $15, how confident can we be that we will determine a change in players’ behavior? What if all or a majority of players were already betting 1-3 stacks per spin?
In this case, the only change is in regard to the outside bets. While outside bets are sought-after, it is the inside propositions that matter more and where we want to influence the players to place higher wagers.
The above chart shows a fairly common scenario in North America. When prices are raised or lowered between the $5-$15 table minimum tiers, player behavior barely changes. Their placed wagers remain the same between these tiers. And if the purpose of changing prices is to yield the tables in order to achieve an ideal occupancy to enhance your revenue, that might not be accomplished if there is no change for the players.
Another challenge in Roulette is the game pace. The process of using color non-value cheques in Roulette can be quite slow, depending on occupancy levels and players' betting preferences. Busier games that have a lot of stacked chips, typically games with a $25+ table minimum, can also run slower for the dealer and have a higher chance for errors. It’s also the same experience for the customer, slow game and not as fun, which doesn’t help the house out from a revenue perspective.
Two Pricing Strategies for Roulette
There are two pricing strategies for Roulette: chip minimum or table minimum. The US predominantly uses the table minimum strategy, while Canada is split between the two. The rest of the world uses chip minimum for their pricing strategy.
So what’s the difference? The goal of increasing the table minimum should result in a change in player behavior, specifically, in placing a total higher wager. As mentioned above, this doesn’t happen in the lower Roulette tiers. Using chip minimum has had a more significant impact on player behavior.
If a player is betting on the outside, they need to wager at least the table minimum. If the table minimum is $5, then that is the minimum bet requirement for the outside. From an inside perspective, US table minimums are typically $5, $10, $15 and the player will receive a $1 non-value chip to place on their bets. If the table minimum is $5 then a player is required to make $5 worth of bets with their 5 non-value chips to cover the minimum, but can certainly go over.
On average, a Roulette player will place 20-30 chips on the table as their wager. When a table minimum is at $25, the non-value chip will increase from $1 each to $5 each and for $100 table minimums, the chip increases to $25 each.
However, in most countries, Roulette is priced based on the chip minimum. This means the value of one color non-value cheque is equal to the posted table minimum. A player can place as little as one cheque on any proposition, in order to meet the table minimum requirement.
As the example below shows, non-value chips are $1, $2.50, $5 and $10 each. Some casinos only require as little as 1 chip to place an outside bet or only allow on chip on outside wagers while some may require a chip minimum (e.g. 10 units required for outside bets).
Comparing Chip vs Table Minimum
What does it look like from a felt perspective? The ultimate goal for yielding for a table games manager is to change behavior to maximize profitability. Roulette players are creatures of habit and like to bet the same set of numbers. If you don’t believe it, ask any ETG managers how often the reset button is pressed on those games. It’s usually because the wrong selections were made and they want to play their specific numbers. Similar to lottery number selection.
Let’s imagine that we have a player willing to spend 15 color cheques each spin. This player is a novice player that is not chasing sections on the wheel, but instead believes the best strategy would be to cover as many numbers as possible with their 15 cheques.
The chart above shows the difference in average bets between table minimum vs chip minimum.
On the left side (table minimum), a player is able to keep covering the same amount of numbers on the layout, regardless of whether the table is priced at $5, $10 or $15. Only when the table is raised to $25 (due to the fact that the value of 1 cheque has to be nickel value now) if the same player wishes to cover exactly the same numbers as before, then they will have to spend $75 per spin.
On the right side (chip minimum), there is more of a gradual progression in increasing a player’s wager. When chip minimum is $1, the player can cover the same numbers with $15. Once the chip minimum is raised to $2.50, they will need to spend $37.50 if they want to cover the same amount of propositions on the layout. When the chip minimum is raised to the next tier (from $1 non-value chips to $5) the player has to spend $75 in order to be able to cover the layout the same as previously.
By using chip minimum, an operator can effectively yield a Roulette game and change a player behavior which is the goal. The increased wager happens sooner by using a chip minimum pricing strategy, with the first price increase. In the table minimum pricing strategy, the increased wager only happens after several price increases. The table minimum pricing strategy is not as effective and therefore, doesn’t maximize the profit potential.
Price increases in the table minimum example can also create player dissatisfaction. If the table minimum increases to the $25 table minimum, many players are now potentially priced out of a game they still wanted to play. Players who play $5-15 table minimums usually won’t play the higher table minimums ($25+), but there are many $1 chip players who will also play $2.50 chip minimum.
Why Offer $2.50 Chips?
The chip minimum pricing strategy is a bit of a foreign concept in the US, however, it has been very effective in other countries where Roulette is a leading table game. Offering a $2.50 chip is also a new concept but it has proven to be a great mid-level option. Although not generally offered in the US, it benefits both the player and casino. The jump from a $1 chip to $5 can turn off a lot of players, however, a $2.50 chip engages a lot of players who wouldn’t wager the $5.
Looking at the earlier example, a $1 chip minimum with 15 wagers costs a player $15. At a $2.50 chip, the same wager is $37.50. Some players might leave the table but for some, it is not much of a stretch. At a $5 chip minimum, the same wager is $75 which is quite a difference from the original $15 wager.
Why not $2 rather than $2.50? It is more of an in between wager between $1 and $5. It’s better than a $2 chip as dealers think in quarters. It’s similar to $25 minimums, but just 10x or moving one decimal place to the left. It’s easier for a dealer to count when cashing in larger amounts (e.g. $100 in $2 non-value chips is two and a half stacks rather than just two stacks). Conversions are also easier along with payouts.
Common Objections to Switching to Chip Minimum
There are a lot of benefits to utilizing chip minimum over the table minimum pricing strategy, so why isn’t it more popular in the US? There are a number of common objections by operators but in many instances, they’re unfounded.
Players Will Not Accept this Game
This objection basically states that the players won’t play Roulette as it’s a completely new and foreign way to bet. It’s not exactly the case as Roulette players often view their wagers in non-value chip increments anyway. Rather than the table minimum being $10, it is perceived as $1 bets per non-value chip, but having to place ten of those bets per spin.
May Jeopardize the Game Integrity
Payouts for $2.50 are the same as calculating for $25 games at a 10x reduced scale so there isn’t really a difference when introducing this chip. Dealers already calculate at a quarter level and it’s the same procedures in place for the table. It’s not much of a hurdle and really would be the only change from a dealer’s perspective.
It’s only one pricing tier and the remainder of the chip minimums are standard in US Roulette.
Players Will Only Bet 1 Unit
One of the most common objections to switching to chip minimum is the concern that players will only bet 1 chip per game. Although it’s possible, players come to the tables to gamble. To play only one unit, there is nothing fun about that. It would be a rare occurrence. An operator can always put in a 10 chip minimum if they’re concerned or if it is happening regularly. Roulette players are creatures of habit and like to play ‘their numbers’ so it’s not how they typically play. Don’t let this be the reason to stop you as this isn’t typically how Roulette players play, putting one chip on a corner for an extended period of time.
Consider reviewing ETG or chipper data and look at the average units per spin. Typically players place 20-30 wagers per spin. If you believe that and that is the case at your Roulette tables, then you would also have to agree that yielding these tables between $5, $10 and $15 as a minimum isn’t really changing much for these players as they’re already playing at that level and more.
- Table minimum is the norm for US Roulette however, the rest of the world utilizes chip minimum which actually can change player behavior, unlike table minimum.
- Switching to chip minimum provides a gradual increase for players whereas table minimum is quite stagnant until the $75 table minimum. At that minimum, there is a sharp increase for players which can generate dissatisfaction and backlash from players.
- Providing a $2.50 chip provides a middle ground between a $1 and $5 non-value chip. It also increases the average bet placed sooner and is easily adopted by the dealer.
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As SVP and Head of North America Business, Ari brings over 15 years of operations experience across multiple jurisdictions in North America including Las Vegas, Atlantic City, Florida, Pennsylvania, and Connecticut. Ari oversees Tangam’s global client base and helps operators adopt yield management best practices.
With nearly 20 years of casino experience, Victor has worked at various Canadian casinos where he trained staff and managed both table games and slots operations. At Tangam, he helps clients all over the world implement data-driven management of table games spreads and pricing on the gaming floor to achieve their revenue management objectives. Victor holds an MBA from University of Newcastle, a Postgraduate Diploma in Business Administration from the University of Melbourne, and a Bachelor Degree on History & Philosophy from the University of Bucharest.