What is “Business Intelligence” Gambling Exactly and Do Online Casinos Actually Use It?

The term “business intelligence,” or BI, has grown in popularity in recent years and continues to do so today. Microsoft jumped on the bandwagon with SQL 2005, which included features like SQL Server Reporting Services and SQL Server Analysis Services (SSRS and SSAS). They doubled down with SQL Server 2008 R2, which primarily improves these BI components while making a few improvements to the database engine itself. They did this to double down. As a database administrator, I’m disappointed by Microsoft’s decision to prioritize business intelligence in SQL Server. It makes little sense to group reporting and analysis products with SQL Server simply because these products use data stored in a database. Furthermore, DBAs are now expected to become experts in these new products, even though the majority of these new products have nothing to do with database administration. 

I’m not particularly interested in learning about business intelligence tools, but I’m intrigued by the information they have the potential to reveal. If you know how to extract and manipulate data from databases, you could have access to a veritable treasure trove of information. Almost every situation provides an opportunity for business intelligence. When I think of BI, one of the first places that come to mind is Las Vegas. 

I recently returned from one of our annual trips to Las Vegas. Every summer, my wife and I take a short trip out there for a couple of days with her sister and brother-in-law to enjoy the weather and spend some quality time together. We prefer to stay at the Wynn, where we are also members of the player’s club. For those who are unfamiliar, casinos usually allow gamblers to sign up for a player’s club and receive a card that functions similarly to a credit card. When playing machine-based games like video poker or slot machines, you must insert the card into the machine for it to keep track of how much money you have wagered. When playing table games such as blackjack or roulette, you will typically hand the card to the dealer, who will then give it to the pit boss, who will also keep track of how much money you have wagered. 

Your bets are not recorded when you play a game of chance. Most of the time, the pit boss will take note of the size of your bet every 15 minutes. (Some people try to game the system by placing large wagers when the pit boss is checking bets but placing smaller wagers when he is not.) The casino will give you comps (free items), special room rates, or both depending on how much money you wager, how long you gamble, and what games you play. Unfortunately, casinos rarely reveal the number of comp points required for a specific perk, with the possible exception of the number of points required for a free meal at the buffet, which appears to be the perk that the majority of people want. We are frequently extended offers for free meals, free casino credit, and free rooms. You will receive one point for every nine dollars wagered at the Wynn. The cards can also be used to keep track of how long you play and which slot machines you use. 

We spend the majority of our time playing video poker, and because I’m a total nerd, I’ve spent an excessive amount of time watching the display that shows your player’s club points. I’ve also been thinking about the network and database that manage all of this information, as well as how long it takes for the display to update. When my wife and I play, we use the same card number, which is permitted by some casinos. We frequently take turns sitting next to one another when we play. Surprisingly, points are not updated at the time they are earned or lost. This is something I’ve noticed. There is always a difference between the points that are displayed on my machine and the points that are displayed on my wife’s machine. It appears that you can force an update to take effect by removing and then reinserting your card. As I previously stated, my inner nerd is aware of these things. 

As a result, casinos maintain a massive database containing information about their customers’ betting patterns. According to what I’ve seen and read, the only data that casinos appear to use is the amount of money played through their machines, the amount of money wagered at the tables, and the amount of time spent playing. They can personalize the freebies and deals they send your way by using this information. Bigger gamblers get better comps and deals. 

In that case, the application of business intelligence is relatively simple. However, I believe that with a little extra effort, they could surpass that achievement. 

When you look closely at the machines, you’ll notice that the player card reader is housed in what appears to be a small box attached to the top of the video poker machine. This is understandable given that not all casinos will require the player’s club functionality. This also implies that, even though the card reader is an optional component, some form of communication between the video poker machine and the reader is required. More specifically, the machine must notify the reader of the total amount wagered by the player. (Although it is not necessary for my proposal, communication can also occur in the opposite direction, from the card reader to the video poker machine.) When you receive free casino credit, it is usually added to your player’s club card. After each hand, the credit on your card will be deducted and re-added to the machine. 

The decisive moment has arrived. 

Each variation of the game and payout table has a “correct” or “optimal” way to play each hand when playing video poker. This ensures that the gambler receives the best return possible from the machine. (A comprehensive list of effective strategies can be found here.) A sophisticated machine could determine whether or not the gambler had correctly played the hand. This information could be entered into the player’s club’s database and used to make decisions about the various bonuses and promotions available to gamblers. If a gambler wins 97 percent of the time, the casino is most likely not making a lot of money off of him. He’ll get pretty close to the maximum return that the machine can provide (which still makes money for the casino). However, if a player only plays the hands correctly 85 percent of the time, the casino loses a significant amount of money. Because you want that specific customer to return frequently, make additional or improved offers to them so that they feel compelled to do so. 

This would necessitate some software changes to the video games as well as the backend of the player’s club database, but I believe these are all fairly simple changes to make. This strategy would only work for games with an optimal strategy, such as video poker and video blackjack. It would not work for slot machines or games entirely based on chance, such as craps or roulette. 

I asked a few people with connections in the casino and gambling video game manufacturing industries if any casinos are currently using this practice, and the consensus was that none are. This, in my opinion, is an excellent example of the use of business intelligence, as well as a fantastic opportunity for a machine manufacturer to add a feature that distinguishes their machines from those of their competitors. 

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