An idea for calculating the worth of a good Surveillance Operator to a casino.
What is a Surveillance Operator Worth?
Over the years Surveillance management has struggled with metrics that measure the worth of their staff. What makes a Surveillance Operator valuable to the organization? How do they contribute to the organization in a way that is measurable, in a way that actually affects the bottom line?
Although annual performance reviews are seen as a way for organizations to set standards, objectives and give employees feedback most are standardized for all departments and don’t tend to be designed for the uniqueness of Surveillance. Surveillance is asked to perform so many tasks now that sometimes it’s difficult to keep the main thing the main thing. To me, the main thing is game protection.
Most people can perform the regular and reactive tasks surveillance staff are asked to perform with little training required. These tasks are important, however, I believe the real value to a casino organization comes from aligning priorities with the business goals of the casino operation. The real value comes from the unique training and expertise in recognizing threats to casino operations.
I have an idea…
What if we measured the worth of Surveillance staff by their “contribution to win (CTW)?” In simple terms, calculate how much money was added to the casino bottom line through the achievements of each individual. What if we recognize the proactive hunters by using metrics that encourage results that can be measured by monetary value? In other words - show me the money gained.
The PACER Performance System
Here’s what I propose. 5 key metrics are introduced to measure performance of Surveillance staff. The 5 are based on personal detection, analysis and investigation of undesirable activity on casino games. I call the metrics the PACER system.
1 - Payout Overpayments
2 - Advantage Play
3 - Cheating
4 - Employee Theft
5 - Recommendations
The key to the PACER system is calculating how much money the casino gained by an individual’s effort and achievements over a calendar year. Measuring monetary gain to the casino is done by using a combination of what was confirmed on video and estimated losses if the activity was allowed to continue undetected for a year.
Not only does PACER acknowledge detecting the catch it also adds an estimate of the actual cost to the casino if it was allowed to go on without detection. Measuring this gain can be an extremely powerful tool to help frame the achievements and CTW to senior executives.
What PACER doesn’t acknowledge are surveillance operators who may be asked to look at something. It’s only for those who use their initiative, go hunting and find it.
Let’s break down the 5 PACER metrics:
1. Payout Overpayments
This one’s easy. When a table games dealer is observed live by Surveillance making an overpayment to a player and the subsequent actions result in the money being retrieved, the retrieval amount is credited to the observer’s CTW.
2. Advantage Play
When a player or team is observed using an advantage play technique that moves the edge in their favor, the observer’s CTW is credited with the estimated theoretical annual loss to the casino if allowed to continue for one year.
To get this number, the theoretical edge gained (%) is multiplied by the player’s turnover (volume). Go into the player rating system and find the player’s total hours played and average bet. If the player is not in the system estimate turnover by reviewing the last hour of play.
After the turnover has been calculated, multiply this number by the percentage gained by the player. Take that number and multiply it by estimated hours a week the person plays. Multiply that number by 52 weeks and that is the estimated loss incurred by the casino if the activity went undetected for a year.
Example:
A card counter has been playing in your casino for a week and has 40 hours in the system. After analysis is conducted by the observer he is deemed a threat to the casino and has an estimated long term edge over the house of 1%*. The player rating system has calculated that his average bet is $200 and he plays an average of 100 hands per hour. The players turnover for the week is 4000 hands X $200 = $800,000. $800,000 X 1% = $8,000 a week. Estimated losses incurred per year = $8,000 a week X 52 = $416,000.
CTW = $416,000
It is universally accepted that good card counters gain an estimated 1% edge over the house
Other common advantage plays i.e. hole-carding and side bet counting, would use the same formula for determining estimated potential losses and CTW. The only variable is determining what the edge gained by the player would be. I suggest you visit Dr. Eliot Jacobson’s site www.advancedadvantageplay.com. Eliot has compiled many calculations on possible gained edges on casino card games and side bets.
3. Cheating
Calculating the CTW on cheating is determined by actual observation on recorded play. The observer’s total CTW is also credited with the assumption that if the scam was allowed to continue for one year it would incur constant losses at the rate of what has already been observed.
On the rare occasion that the cheating incident is observed on the first try, only that amount is credited to an observer’s CTW. It’s easy to determine whether a move is a one-off. A collusion check, part of the standard procedure for detecting a cheating incident, would be done by reviewing video of the dealer’s previous activity with the player.
If the investigation establishes multiple incidents during the surveillance video retention period, then the CTW calculation formula is similar to the advantage player formula but the potential losses do not use player skill scenarios for determining a theoretical mathematical edge. It assumes the loss incurred in the past will be repeated in the future.
Example:
A baccarat dealer is in collusion with 7 players. He’s revealing a sequence of cards to a player who is recording the cards before they’re entered into the shoe to be dealt. Using the inside information, the players bet the table maximum of $10,000 each when the known sequence is dealt. Review of video shows that in the last week they pulled the move 10 times. The total loss incurred by the casino was $1,000,000. The estimated loss incurred by the casino if allowed to continue for one year = $52 million.
CTW = $52 million
4. Employee Theft
Calculating the CTW on employee theft uses the same formula used for cheating. CTW = observed on recorded play X assumption the theft continued at the same rate for a year. On the rare occasion that the theft is observed on the first try, only that amount is credited to an observers CTW.
Example:
A roulette supervisor is observed stealing $100 cash chips from the salad. The observer reviews back the last week and confirms that she was stealing $1,000 a day during the surveillance video retention period. The roulette Supervisor works full-time (5 days a week) and gets 2 weeks off a year. The potential losses incurred by the casino is 50 weeks X $5,000 = $250,000
CTW = $250,000
5. Recommendations
This is where we change it up, literally. If an observer comes up with an idea to increase gaming revenues, does the analysis and presents a proposal to senior management that is introduced to the floor with measurable success, a CTW calculation is made based on the increased casino win.
Example:
An observer notices the win per table is down on the roulette tables. A 30-day investigation reveals that the average spin rate for roulette across the floor is 40 spins per hour. She thinks that seems slow considering the volume isn’t that great. She comes up with the idea to introduce a spin timer. The spin timer sets a voice alarm from 30 seconds from the place your bets call to the no more bets call. It uses multiple celebrity voice narrations that guide players and add hype to make the countdown exciting and fun. Think Snoop Dog or a boxing announcer calling “let’s get ready to rumble!” The idea is presented to senior gaming management through a written proposal and slide presentation. The idea is introduced. The win per table increases 20%. You do the math.
CTW = Varied, but significant long term impact
The Benefits of Calculating Contribution to Win
Contribution to Win is a different way of looking at Surveillance’s value to a casino organization. It aligns Surveillance goals with business goals of the gaming operation. Although mandated tasks are important, as they are with every department, the core function of Surveillance is catching stuff.
To some, the examples I’ve given may seem a little “out there” but I can tell you when it comes to casinos all these things are actually out there.
By introducing a recognition system that speaks to accountants and all major stakeholders, the value of Surveillance (or anyone for that matter) can better answer the ROI question on employees. Not all employees. Great employees. The ones that love their job and have the organization’s back.
Recognizing high performers means you have to have high performers. To start with employees need quality training and access to pertinent information and knowledge. Otherwise they’re just the Jamaican bobsled team without John Candy. Quality training costs money but it pales in comparison to the contribution to win benefits. Arguably, it is the best return on investment most accountants will ever see!
For high performers (or employees who would like to be) CTW could be used to motivate. Tied to a compensation package i.e. bonuses, it could give Surveillance employees more financial opportunities in a department that currently has a limited career path. It could help with recruitment and retention. And it could help with the way other departments and the entire organization view Surveillance and their worth.
Stay sharp
Willy Allison
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