- Macau venue lost $10 million on baccarat tables
- CEO tells investors of ‘unique statistical anomaly’
It has been reported by Fortune that the Wynn Palace in Macau paid out more than $10 million last month on the baccarat tables, marking a significant swing from the potential $50 million profit it can bring the venue each month.
A series of wins by VIP players caused the losses, with the odds stacking against the casino. CEO Steve Wynn is said to have called these unexpected losses “the most unique statistical anomaly in my 50 years of doing this” during a call to analysts, reports Bloomberg.
Huge market for baccarat in Macau
Macau’s Wynn Palace is an important property for the Wynn Resorts brand. Macau’s VIP gaming sector accounts for around 57% of all money gambled.
Baccarat is a very popular game among these VIP gamblers because it offers a low house edge of around 1.2%, and allows for high-stakes bets that can net the player millions. While baccarat is often important for generating income among casinos, there is always the chance that the odds could fall in the player’s favor and the casino could end up out of pocket.
That is exactly what happened to Wynn Palace last month. A high volume of players still attended the tables and the volume of bets taken matched expected rates – but a series of big wins by individual VIPs over a short time has left the casino facing a $10 million profit hole.
Professor of risk, Robert Hannum called the situation “unusual” but notes that “anything can happen in the casino business.”
Junket contractor brings in VIP players
The VIP gaming market in Macau is largely based around the work of junket operators, who attract players to casinos and offer rolling chips or straight cash for the players – on a commission basis, of course.
The casino also pays a cut for the junket who fills their gaming rooms, and is liable for any wins as well as holding any winnings. This leads to fluctuations in the house hold rates and player win rates, but over time the house is expected to pull in a profit thanks to their house edge.
However, it would seem that from reports Wynn Resorts has felt the effects of a system that is prone to wild swings in probability, with a rare loss noted across a busy month of VIP gambling.
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