Most people that patronize casinos have dreams of leaving with more money than which they arrived with, to be winners. A better perspective would be to view the casino visit  purely in terms of amusement, and thus think in terms lowering the cost of the entertainment, or more precisely, minimizing losses. While the cost of other forms of entertainment, such as playing a round of golf, are rather well defined, the cost of gambling as a form of entertainment is more difficult to grasp, due the variability of individual outcomes. This variability of outcomes is what makes gambling so exciting, and potentially problematic. To the savvy gambler this variability can be harnessed for advantage over the casino, as explained below.

First, let’s press a little harder on the gambling and golf analogy. Imagine your preferred golf course had greens fees of $100, and worth every penny of that fee. Now, let us suppose the golf course adopted a casino pricing model. You expect your round will cost you $100, but you really don’t know before the round what the cost is, since the Course Pro will come out at the end of the round and tell you how much the round cost. For instance, the Course Pro may have noticed all the sand traps you hit into, and charge you $300 for the round. On the other hand, he may say he really likes your smooth golf swing and only charge you $50. Or, to push the analogy even further he might congratulate you on your great round and say the round is free, not only that you can have a free room in our resort hotel, and dinner at Michael Mina’s new restaurant.

Sounds crazy? But that’s the way the seemingly impenetrable casino comp system seems to work at most casinos. Actually, a common comp experience is more like one of the two following scenarios.

The most common scenario is as follows:

You play a slot machine for a half hour or so, lose $40 or $50, maybe $100 walk up to the club desk ask for a comp to the buffet and are sternly told you have earned no comps, regardless that the value of the comp you are seeking is much less than the amount of your loss.

Another less common scenario is:

You play for three or four hours on a slot machine, win $50 or $100, walk up to the club booth and ask for a buffet comp, and are asked, “How many” Crazy, right?

How Casino Comps are Calculated

To understand what’s going on here, you have to understand how casinos calculate how they award comps to their patrons, and it really is all about Theo, and I’m not talking about Vincent’s brother. Theo is casino short hand for “Theoretical Loss”. Theoretical Loss is the calculation the casino uses to calculate your monetary value to the casino and subsequently how much in complementaries, or comps, they are going to offer you.  Every game in a Casino has a built in house advantage, which means, over the long run the Casino will always be a winner. Theoretical loss is a way for the casino to combine their knowledge of their advantage on their games with their knowledge of how much you are wagering.

Theoretical loss is calculated as follows:

Take the Casinos Advantage and multiply it by your total wager
(Casino Advantage)   X  (Total Wager)
Total Wager = (Average Bet) X (Number Of Bets)

Action More Important Than Win/Loss

Notice, whether you actually win or lose  is not in the above calculation. It is largely immaterial to how the casino will comp you. The saying is “the casino is rewarding you for your action” Your action is how much you are betting times the house advantage at the game you are playing. This explains why someone that bets the same amount at a game with a higher house advantage, will be comped more than a player that plays a game with a lower house advantage. For example roulette has a higher house advantage than  baccarat, hence roulette players will earn comps faster, assuming they are betting the same dollar amounts.    It should also make sense now, why the person that lost $50 or $100 in a short period of time earned zero comps and why the person that actually won money over the course of several hours earned  a basket of comps.

Theoretical Loss In Action

To put some numbers to the earlier scenarios, assume the players are playing a slot machine with a 10% house advantage, and are playing at a rate of 500 pulls an hour at an average bet of $1, all reasonable assumptions I might add. Plugging these numbers into the Theoretical loss equation above we arrive at the following results: twenty minutes  play = $17 Theo versus four hours = $200 Theo. Assuming the casino is willing to comp players at a rate of 40% of Theo, again, a reasonable assumption, the earned comps are: $7 and $80 respectively.

Use Theo To Your Own Advantage

The obvious question is, how do you use this information for your own advantage, and thereby reverse, or at least diminish the casino’s advantage. The answer is to play games of skill. Even though it may sound oxymoronic, there are indeed games of skill in a casino, the two most prevalent are Blackjack and Video Poker. These are games where the skill level of the player can have a dramatic effect on the outcome.

Maximize Comps by Playing Skill Games Well

The key to maximizing your comps, is to get the casino to believe that your theoretical loss is greater than it actually is. The most important way to do this is to play skill games, and to play them well. Skill games are games where decisions you make effect the outcome of the game. Most table card games are skill games, baccarat is not a skill game, since the player has no impact on the outcome of the game. Blackjack is the most widely known table game where the player’s skill level has a large impact on the house advantage. If the player is skilled enough to be able to successfully count cards, they can even turn reverse the house advantage, so that they have an advantage at the game. The other table card games, such as Caribbean Stud, also have elements of skill, however their house advantages are rather large, even with optimal play. Playing blackjack, using basic strategy, allows the player to lower the house advantage to less than 1%.

Importance of Games of Skill

So, how do you get the casino to believe your theoretical loss is greater than it actually is and why are skill games the key?  Let me answer the second question first. Skill games are of key importance because the only way the casino can assign a theoretical loss value to your play at skill games, is to assign the average player’s skill level to your play. In non-skill games, such as roulette, everyone plays at the same skill level, and hence is assigned the same theoretical loss level, for a given amount of action. In skill games, if play at an above average skill level, the casino will credit your play at a higher theoretical loss level than is true.

Video Poker is Great for Generating Comps

For example, let’s look at video poker. Video poker is a skill game because decisions the player makes effect the house advantage of the game, and hence the player’s theoretical loss.  Video poker is a key component of a players set of tools in gaining comps from casinos.

Video Poker Example

Let’s say you are playing $1 video poker, where you can bet one to five credits per hand. As will be explained in future posts on Video Poker,  you always want to bet five credits per hand, or in our example $5 per hand. Slots or machine games are played at a much faster rate than table games. While you would be lucky to play 50-60 hands in an hour at a table game, at video poker 500 hands per hour is considered a leisurely pace. So if we’re playing video poker at $5 per a hand, 500 hands an hour, that’s $2,500($5 x 500) an hour. If we play 4 hours in a gambling day, not a particularly large amount of hours in Las Vegas where sleep deprivation is the rule. That leads us to $10,000 bet per day. We then multiply this amount by the house advantage.  I’ll use the relatively common game of Jacks or Better, the full pay version known as 9/6 Jacks or Better, often abbreviated 9/6 JOB.

A future posting will be  “A Primer on Video Poker” . Until then, the 9 represents the payoff for a full-house and the 6 represents the payoff for a flush. These are the most common parts of the pay schedules that casinos play with to raise the house advantage)

9/6 JOB has a house advantage of 0.5%, when rounded to the third decimal place.  Hence, our expected loss on $10,000 bet is $50($10,000 x .005). Not too bad when you consider all the comps this level of play will likely garner for you.

In the example just cited, I calculated that you would expect to lose $50 and yet the casino would probably give you some very nice comps for that level of play. How can that be? First, the casino will calculate your theoretical loss based on their experience of all players that play the type of games you are playing. As I mentioned before, playing at a 2% disadvantage to optimal play is a conservative assumption. Using figures like 7% or even 10% would not be unheard of. In the example above, playing at a 2% disadvantage would generate an expected loss of $250 (.5% house advantage with optimal play plus 2% times $10,000 = .025×10,000 = $250) Using the 10% figure we get an expected loss of $1,050. Realize that casinos will generally comp players up to 40% of their theoretical loss, hence, a $1000 theoretical loss equates to $400 in comps. In our example, a savvy video poker player can play at an expected loss of $50, and conceivably get $400 in comps, that seems like more than a fair trade for a player. Even at the conservative 2% rate a comp value of $100 is above the true Theo of $50.

Learning how to maximize comps from casinos is a bit of a game in and of itself, a game within a game, and is often referred to as “The Comp Game” and can be as much fun as the games themselves, and certainly more profitable.

Two Great Yahoo Groups

I hope this essay proves helpful if you choose to patronize casinos. I recommend two Yahoo Groups “Casino Comps”  for more detailed and up to date information on Casino Comps and vpFREE for up to date information on Video Poker at various casinos around the country.

For Information on Las Vegas Casinos Please Visit:

For information on Casino Comps in Las Vegas Visit:

5 Responses to “It’s All About Theo”

  1. Show me a casino that has a theo of higher than 2-3% at 9/6 JB these days and i’ll be AMAZED. Most harrahs properties have the theo set at .5% (or Lower!), I have not direct knowledge of MGM rpops, but am told it similar. As far as the independant joints, it’s getting to be where they won’t comp VP players, require an obscene amount of play to earn a point, and exclude them from drawings and promos.
    But step right up and get those easy comps…….

  2. I agree with most of your post. However, there are some outlier situations, where the credited comps can be surprisingly high. I just had this situation happen to me earlier this year, it was a “Perfect Storm” type of scenario. It was at a MGM strip property that I had never played at before, these situations are ripe for good offers, too bad you can only be a virgin patron once!. Second, it was during the recent slow period where strip casinos are desperate for business. Third, the casino probably had mistakenly put some decent video poker on the floor, 8/5 bonus instead of the usual 6/5 bonus. My offer, with I believe less than $10k play on a previous trip, included: $300 free play; $100/day food/bev; large suite; Limo to/from airport; Pool Cabana.

  3. [...] recommend the following article for a complete explanation of theoretical loss: “It’s All About Theo” Previous post [...]

  4. [...] recommend the following essay on Theoretical Loss. Post Published: 17 March 2010 Author: admin Found in section: Casino Comps [...]

  5. [...] As a side note, comps are given generously by the Marketing Department at Excalibur and the only areas you can use the food and beverage comps are: at the pool; room service; the buffet; the Sherwood Forest Cafe and The Steakhouse at Camelot. Hence if you have a large dollar amount food comps, you are going to be eating at The Steakhouse at Camelot. For more information on earning comps at casinos read this Essay on Theoretical Loss and Casino Comps [...]

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