Showing posts with label Wynn. Show all posts
Showing posts with label Wynn. Show all posts

November 22, 2016

Dancing Gorillas at the Poker Table

Bonus update (23 Nov 2016):  My good friend Poker Grump wrote a great article over at Poker News on the same issue of selective attention a few weeks back. His article is better because he has a Penn & Teller magic video. So go read that article then come back here for dancing gorilla videos.

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After several stressful months at the office, not to mention a mind-boggling Presidential election, a trip to Las Vegas came at just the right moment. A few days to unplug from the world were just what the doctor ordered. Poker. Good food. Cocktails. Friends. The Vegas Rock 'N Roll Half Marathon. Well, the last one was more the excuse for Vegas than the highlight, yet there is something awesome about being mere yards from a stage where Snoop Dogg is rapping about peace, love, and weed, before running for two hours in the neon glow of the Vegas Strip at night.

As has become the norm for my Vegas trips, I made my headquarters at Aria; still the best value for upscale hotel rooms, awesome poker room, and great mid-Strip location. But there may have been a donkalicious late night drinking session of 2-6 spread limit Hold Them at Monte Carlo. Allegedly. Unquestionably there was a side trip for a session of Pot Limit Gambooool at the new Wynn poker room (actually in Encore). This is a fantastic room, with restrooms and a sports book window conveniently located in the room, lots of space between tables, top shelf drinks, and a cool, upscale vibe. And, of course, no Vegas poker trip is complete without a late night session of Poker With The Drunks at Planet Hollywood, where I cashed out for nearly a grand in profit. P-Ho remains the gold standard for lucrative late night poker.

Monday morning rolled around, and I decided to squeeze in a last three hour poker session at Aria. My legs were a little sore from the race, but I was rested, caffeinated, and sober. I should have been ready to play my A-game. Instead, I ended up looking like a total idiot.

But, for a moment, let's digress. Take a quick look at this video.



You may well have already seen this video, which was the centerpiece of an exceptional bit of psychological experimentation. The point of the experiment was to test how people observed an overall situation when they were focused on one aspect of the situation. Here, where people were focused on the task of counting the number of passes made by the people in white t-shirts, half of the observers completely missed the gorilla walking through the scene. That's right. People who were intently focused on tracking one part of the scene were utterly oblivious to another part of the scene, even something as absurd as a gorilla.

The researchers called this psychological phenomenon selective attention. Essentially, when your brain is focused on one task, it mutes or outright ignores information unrelated to the task at hand. And it can manifest itself in a wide range of daily activities. Including poker. And in a game where observation is a key skill, overlooking important information can be a costly leak.

Back to my session at Aria. I got into a game where most of the players had been at the table together since early in the morning. And it was quickly obvious why. Most of the players were over $500 deep, with several having over $1,000 stacked behind. The table economy ran through a total maniac across the table who raised preflop more than two out of three hands. His standard play was to raise preflop by splashing a random handful of chips into the pot, usually $30-$80. Then, he would c-bet nearly every flop by jamming a big stack of $80-$150 into the middle. Of course, the maniac attracted multiple callers every hand, with players looking to catch a hand and take a bite out of the maniac's stack. For his part, the maniac, as maniacs are wont to do, caught improbable hand after improbable hand to vacuum up chips from tilty nits.

So how many times did I screw up in this session? The number of the counting shall be three ....

Hand #1:  Early in the session, I had roughly my $300 starting stack and was in the small blind. Maniac raised to $20, and I called with 75 soooted along with three other players. Flop was a gorgeous 7-7-5 with two hearts. Catamaran! We checked it around on the flop. Turn was another 5. Boo! I led out for $50, and got called by the big blind. Maniac and another guy folded, but the cutoff—a fairly standard older nit—raised to $150. Damn, pretty clear he has the other 7 and we're chopping the pot. So, I shoved, expecting the big blind to fold, the nit to call, and to run out the board.

Except the big blind didn't fold. Instead, he kept looking at his cards and thinking. He cut out chips for a call, and kept looking back at his cards and the board. Eventually, he sighed and mucked. I rolled my cards and said, "I flopped it, but guess now we'll chop it."

It was only then that I realized the old nit in the cutoff hadn't snap-called! That was ... awkward. And seconds ticked by as the nit stared at my hand, the board, and his hand. Finally, he reluctantly folded. Obviously he didn't have the last 7, so he might have had something like an overpair or possibly an open-ended straight flush draw. In any event, I likely cost myself his $100 or so call.

Hand #2:  Later in the session, I was on the button with the Spanish Inquisition6h3s. The table maniac raised to $30 and I called, along with three other players. The flop was interesting—9h5h4h—giving me an open-ended straight draw, but presenting the danger of drawing dead, I was prepared to fold to any bet, on the theory there is always a better place to get it in bad. But instead it checked around, and I gladly asked the dealer for a free card.

The turn was even more interesting—the 2s—giving me the straight. This time, the maniac threw out $50, basically 1/3 of the pot. Two players flat called, and I made the reluctant crying call.

The river was the 2h. Although I doubted there had been a slow-played set or two pair that boated, the fourth heart on the river was almost certainly the nail in the coffin for my straight. The other players took turns looking at their hole cards and checking. I checked and waited to see the inevitable showdown between big single hearts in the hole. As everyone stared at each other, I rolled my cards and dramatically announced, "I have a straight to the six!" hoping to prod the other players to show down and move things along.

Knowing my hand wasn't good, I looked over at the TV, waiting for the next hand. I heard the dealer announce "Flush wins." Well duh. But then, I saw the dealer pushing the pot to me. What the heck??

Oh yeah. I had a baby heart in my hand, so I had a flush, not a straight. Of course, I could only beat a naked 3h in the hole, but that was the only other heart held by anyone in the hand at showdown. Cha-ching! Feel like I missed a value bet there with that monster ....

Hand #3:  Once again, maniac opened in middle position for $35. Once again I called on the button with 8s7s. But to my surprise, the rest of the table folded. The flop was pretty good—Ah9s6c—giving me an open-ended straight draw. Maniac bet $50, I raised to $130, and the maniac auto-called. Hmm, he might have a hand this time. Turn was interesting—9c. Maniac checked, I bet $200, he called. At this point, if I didn't hit my straight, I was done with the hand. It was far too probable maniac had an Ace or 9.

River was not just a blank, it was a killer card—6h. Basically, if maniac has any Ace, 9, 6, or pocket pair, he wins. Maniac checked, and I checked. Maniac says, "You win," I respond, "I have eight high" and flashed my hand. Maniac goes, "Oh, I can beat that!" and tables QcJc. Ahhh, so he chased a flush draw, missed, and still has me beat. Sucks to be me.

I went to muck my loser hand when the guy next to me says, "Wait, you chop!" I paused, then realized that maniac and I were both playing the board because the Ace on board was the kicker for each of our hands. I tabled my cards, and we chopped the pot.

I ended up stacking maniac when I slow-played QhQd preflop, and we got it all-in on a flop of AsQcTc. Maniac showed Ac2c, which was stronger than I hoped. But the board ran out blanks and my set held up for a monster pot.

So back to selective attention. In each of these hands, I was so focused on one thing—a player's action or chasing my draw—that I missed other important developments. Of course, having it happen three times in a three hour session is not something I am terribly proud of. I'm certain that the circumstances—a last quick session, some residual fatigue, playing a maniac—contributed to the problem. But it's also a phenomenon that happens even to the best trained professionals; for example, a decent percentage of radiologists failed to detect a gorilla shape when reviewing CT scans for tumors. And for you smug folks who saw the gorilla in the first video and who are laughing at my stupidity, try this follow up test:



In any event, being aware of this psychological phenomenon will hopefully make it less likely to recur in my future poker sessions.

Or I'm just getting old.

May 09, 2010

MGM Slides Closer to the Abyss

This past week saw the release of official corporate financial statements for the 1st Quarter of 2010, including financial statements for MGM Mirage (or whatever they call themselves this year), Las Vegas Sands (owner of Venetian and Palazzo), and Wynn Resorts (owner of, well, Wynn and Encore). Since Harrah's Entertainment went private, financial reporting is still available, but the data is more limited.

I discussed the Aria financial picture a month ago, when MGM issued an advisory warning of projected poor first quarter financial results, primarily related to the City Center project. None of the final numbers reported last week are significantly different than the advisory numbers.  However, it appears that Aria's gambling revenues are fairly solid, at $75.9 million.  But the occupancy issue at Aria (a mere 63%) remains a serious issue going forward:

[MGM Mirage CEO Jim] Murren said CityCenter's non-gambling revenue—which he told Nevada gambling regulators last year could end up being four times greater than its casino revenue—will take longer to grow.

"That side takes longer to build unless you just want to give away the store and be highly promotional and lower the room rates," Murren said. "That would be, we believe, very damaging long term, and unnecessary.

"We fortunately have the luxury of time to allow Aria and CityCenter to build in a graceful, logical fashion," he said. "We're not in a crisis mode where we need a certain amount of money on a daily basis or a weekly basis because of some financial covenant."

....

Murren said Aria's bookings are improving for the rest of the year for conferences, which generate higher room rates than leisure travel. He expects that to help occupancy.

—Oskar Garcia (AP), in The Tacoma News Tribune (5/6/10) (emphasis added).
The problem with Murren's statement is that, at least to my eye, Aria's marketing blitz the past month or so has been directed to individual gamblers, via emails to MGM slot club members and internet ads targeted to gaming related websites.  This is hardly the higher-revenue conference-attending crowd that Murren claims is vital to Aria's survival.  More to the point, the email and online ads are for greatly reduced rates, usually around $109 for weekdays, $139 on weekends.  This is certain to undercut Aria's intended price point which is meant to compete with the $200+ average daily rates (ADR) of Bellagio, Wynn/Encore, and Venetian/Palazzo.

Also of note is that MGM failed to release a Revenue Per Available Room (REVPAR) figure for Aria, a standard metric for measuring revenue in the casino business.  MGM provided REVPAR data for all of its other properties.  As a reference point, Bellagio had an ADR of $199 and a REVPAR of $181 for the quarter, which appears a fairly standard ratio for the higher end Strip properties—the ADR/REVPAR figures for Venetian ($202/$180), Palazzo ($214/$201), and Wynn/Encore ($203/$181) are in the same general range as Bellagio.  Presumably, Aria's REVPAR is embarassingly low, or it would have been reported.

While digging through some older Las Vegas Sands financial statements, I discovered that the Palazzo, which opened in December 2007, had first quarter 2008 occupancy of 79.1%, ADR of $244, and REVPAR of $193.  I tried to find first quarter data for Encore following its opening in December 2008, but Wynn Resorts does not separate out the two Vegas properties in its financial reports.  However, the joint Wynn/Encore figures for that first quarter of 2009 reflect an occupancy rate of 89.5%, ADR of $222, and REVPAR of $199, almost identical to Palazzo's performance that same period, and slightly ahead of Venetian.  Given that Aria is running 16 points behind Palazzo's post-opening first quarter occupancy rate, and has a substantially lower ADR ($194), the REVPAR for Aria seems highly likely to fall below $150.  If so, those results have to be greatly disappointing for MGM.

While looking through the financial statements, I put together a few spreadsheets analyzing past year trends, as well as comparing trends from the peak market of 2007 through present (you can review the spreadsheets here).  I also put together some interesting charts from the financial data.  Unfortunately, the Harrah's Entertainment financial data I was able to locate was not particularly helpful, as it didn't break the data out in as detailed a fashion as the other major Strip players.  In fact, for Harrah's, occupancy rates, ADR, and REVPAR are not reported, nor are most categories of revenues and expenses (Harrah's reports casino revenue, and lumps all other revenue streams into an "other" category).  But, let's take a quick look at what the data show (you can click on any chart for an enlarged version).

These first two charts show the trend by revenue category for MGM Mirage's Strip properties, comparing first quarters from 2007-2010.  Essentially, MGM's net revenues are down 30%-48% in all categories (see the spreadsheets for detailed breakdown). 



The next chart compares ADR and REVPAR data for MGM Mirage Strip properties, Wynn/Encore (combined), and the Venetian (the Palazzo data is similar, and was omitted to make the chart clearer).  Harrah's does not report ADR and REVPAR figures, but their financial statements indicate that both statistics continued to decline; I suspect their figures would fall near or below the MGM Mirage line given their stable of "value" oriented resorts.  In fairness to MGM, the Bellagio's ADR/REVPAR stats would be quite close to the Venetian and Wynn numbers.  The problem is that MGM needs Aria to be another Bellagio (or better), while it seems more likely to perform as another Mandalay Bay or Mirage.

 


The final four charts compare four categories of revenues for MGM Mirage Strip properties, Las Vegas Sands, and Wynn Resorts.  Harrah's Entertainment has been added into the chart for casino revenue, the only category where reliable data could be found.  For the retail/entertainment category, the two categories were combined to enable apples to apples comparisons across the different reporting methods; however, the general ratio of retail to entertainment revenues is roughly 60/40.  Given MGM Mirage's stranglehold on the Cirque du Soleil shows, as well as any number of other shows, the poor performance in the entertainment revenue category is rather curious.

 


From the data, it looks like MGM is still struggling, with the revenue decreases flattening out, but still continuing to decline across all categories.  Harrah's is showing an uptick in casino revenues, but the financial statements indicate that revenues overall are down 4.4%; with non-casino revenues comprising about 2/3 of overall revenues, it's apparent that non-casino revenues declined at a greater rate than 4.4%.  For Sands Las Vegas and Wynn Resorts, however, it looks like they have hit bottom and are starting to climb back out of their recent financial hole, with Sands Las Vegas doing better than Wynn Resorts.  One interesting side note is that Sands Las Vegas got more bang for their buck with Palazzo (opening December 2007) than Wynn Resorts did with Encore (opening December 2008).

One interesting piece of information I came across in the Sands Las Vegas and Wynn Resorts financial statements was the slot "hold" rate.  Sands Las Vegas routinely reports a slots hold of 7.0%-7.8% (increased from 6% in 2008), while Wynn Resorts reports a lower hold of 4.5%-5.5%.  So, if you're looking for the best bang for your buck, at least at the ritzy casinos, you may want to make the walk over to Wynn or Encore instead of sticking around the Palazzo or Venetian.

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* UPDATE (10 May 2010):  Harrah's Entertainment released a quarterly report today (May 10, 2010), which provided additional financial data that has been incorporated into the Casino Net Revenue chart and accompanying discussion.