Just 20 years ago, gambling was widely influenced by the Mob in the state of Nevada, while in the remaining 49 states, gambling amounted to the gang controlled, street corner numbers racket, the floating craps game or a trip to the horsetrack. Well, not anymore.
Corporations got together with the Nevada Gaming Commission and blew the Mob out of Las Vegas by 1984. Then with one stupendous casino after another, built upon the Mob controlled ruins of the Flamingo or the Stardust, the corporations turned Las Vegas into a gambling-is-fun-for-the-whole-family kind of place. (While walking down the Las Vegas Strip, please try not to notice the abandoned street urchins, kids maybe nine or ten years old begging for spare change or cigarettes, or selling themselves for a cup of coffee.) You see the CPA’s told the corporate presidents, "There’s a thing called the God Almighty Percentage; it’s mathematical. It’s infallible. And the more money wagered, the more money you earn. Simple as that. Build a thousand rooms. Bring them there. Keep them there. And the percentage will grind their money down.’
Casino gambling is dog eat dog, big business in the state of Nevada. And the corporations will spare no expense in building a better mouse trap. All the glitz, the glamour, the outrageous proportions of these mega casinos and the free, or low cost attractions are just the cheese. And once you’re inside the door, the object is to keep you and your money there for as long as possible.
“You know, Marge, I think I will go try my luck at the roulette table after all. Think I’ll bet your birthday.”
(Roulette: House percentage 5.26. That’s $5.26 of every $100 that’s kept of your winnings. Plus, of course, they keep all the money that you lose.) Roulette is a slow game, so the 5.26 percent doesn’t have as many opportunities to work on your money. Unless you like to make a lot of bets on each and every spin of the wheel.
The house percentage at roulette is the easiest one to explain. There are 36 numbers plus zero and double zero, so the payout on any one number should be 37 to one. Instead, it’s only 35 to one. Thirty-eight divided by two is the percentage withheld by the casino, or 5.26 percent.
And that is the beauty of the percentage. The casino derives its profit from the amount of money they withhold from your winnings, compared to what you should have made if paid out at true odds -- the mathematical chance of the event occurring. Granted, gamblers who wager recklessly and compulsively will increase the casino coffers. But no matter how lucky some roulette players may get, the percentage of their winnings withheld, when spread out over the thousands and millions and billions of events and wagers will eventually reach the mathematical equilibrium of $5.26 out of every $100. If you want to know what type of player the casinos hate the most, it’s the guy who walks in and bets the limit on one spin of the wheel or roll of the dice, then, win or lose, walks away.
Here in the state of Oregon, our government has also become aware of the fact: He who controls the games, controls the percentage, and the percentage will make you millions. And so, over the course of a few years, Oregon has been turned into one, giant casino. And gambling is as easy as a trip to your local bar or convenience store. Over one billion dollars was lifted from the pockets of people playing Oregon Lottery games in the fiscal year ending June, 1996, according to unaudited figures supplied by Marlene Meisnner at Oregon Lottery. (The Secretary of State must audit all the figures before it is official.) The Oregon Lottery is mandated by law to return a mere 50% of all money wagered. A casino trying to keep that much money in the state of Nevada would never get a license. But the Oregon Lottery has the best method of holding its players captive: the entire state and its geographical boundaries serve as the casino. Wow. What a concept. Don’t like the odds of winning here, you can’t just go to the next convenience store, you’ve got to go to another state, i.e., Nevada.
In spite of the fact that the Oregon Lottery, by law, need only return 50% of all money wagered, an overall percentage of 62% was returned on traditional games last year. The percentage return fluctuated from game to game. For example, scratch-offs returned 66% and Mega-bucks returned 65%– both slightly higher than the overall average. (Where they get this 66% on the scratch-offs, I’ll never know. I haven’t won more than two bucks on the damn things in the last three years.) On the other hand, Keno gave back 61% and Sports Action (my favorite, unfortunately) paid out a measly 51%.
In case you re wondering what the theoretical hold percentage is for Video poker, it’s running around 11%. That means 89 out of every $100 wagered is returned to the player. Of course, those winnings appear in the form of credits and the gambler may choose to play as opposed to cash in those winnings. And players love to bet those credits. Over 740 million dollars was inserted into the machines, but that generated 3.28 billion dollars of play. After all the fun was over and players peeled themselves off the machines, only 385 million walked out the door. That’s a tight 52% return of the 740 million gobbled up by the machines.
And speaking of video crack, the Oregon Legislature, not the Oregon Lottery, votes to authorize funds for gambling addiction. A miserly four million was allocated by the legislature for the latest bi-enium; that’s two million per year. By comparison, the annual advertising budget– all those commercials enticing poor folks like me into playing the games–was 8.4 million dollars last year. So the money spent encouraging you to gamble is four hundred forty percent greater than the money spent to treat your gambling addiction.
By law, administrative costs can be no more than 16% of the gross sales raked in each year. And six of that 16% goes to retail commissions. That still leaves an administrative budget ceiling that boggles the mind -- tens of millions of dollars worth of office space and equipment, salaries and benefits. Talk about job security, the more money the lottery pulls in, the more they can spend on administrative costs. (So why am I a starving writer buying scratch-offs and Sports Action tickets in vain hopes of paying the rent!?)
In case you re wondering about the integrity of the video poker machines, they are, according to Ms. Meisnner, virtually tamper proof. Each machine is electronically linked up with the Oregon Lottery computer terminal. Any tampering, even a door left ajar after cleaning out all that cash, would set off alarms at the main terminal. Sounds fantastic. But then, what retailer would want to slight the Oregon Lottery in the first place? They don’t need to send Guido to break the retailer’s arm. If a retailer lost their Video Poker machines (and the thirty-five percent they keep of the forty-eight percent the machine takes of your money) it would be just like losing their arms.
So now that the State of Oregon -- government, retailers and customers -- are all one big, co-dependent gambling family, you can be sure that the many headed hydra will never die. It will only grow into a multi-billion dollar behemoth.
But wait. There are other options to the Oregon Lottery games besides a trip to Nevada. There is tribal gaming and the social card rooms of Washington. I’ll cover those venues (and hopefully take a quick trip to Vegas) in this continuing saga. In the meantime, bite down hard on the bullet and try to resist the eight million dollars worth of Oregon Lottery commercials. And remember, entire civilizations have been undermined by gambling. According to some squirrely social historians, gambling (not prostitution or pornography) is the most insidious vice ever known to man, and the surest sign of social decay.