One Atlantic City casino’s high-stakes table games strategy defies the old gambling adage that “the house always wins.”
The payoffs at Tropicana Casino and Resort have been huge — for the gamblers. Blackjack whiz Don Johnson became an international celebrity by beating Tropicana out of $5.8 million during a 12-hour gambling spree in April 2011. He returned to win $2 million the following October and another $2 million in February 2012.
Despite the risks, Tropicana has no plans to abandon big-stakes gambling as the centerpiece of its table games operations, the casino’s CEO stressed.
“I think it’s exciting for us to say to the general public, ‘You can get on a roll and make a big score here.’ I think that’s a very exciting thing that we can offer,” said Tony Rodio, who also serves as CEO of the casino’s Tropicana Entertainment Inc. parent company.
Tropicana allows its top gamblers to wager as much as $100,000 per hand. Johnson bet that much during his incredible winning streak, but even he questions the logic of Tropicana’s strategy.
“I don’t know what they’re trying to prove,” he said. “Nobody else offers those limits in the world. One hundred thousand a hand on blackjack? That’s strong.”
With Johnson and other big bettors winning multimillion-dollar jackpots, Tropicana’s table games revenue has swung wildly from month to month during the past 2½ years.
Most recently, the strategy worked in Tropicana’s favor. In February, it earned $3.4 million from its table games, compared with a $1 million loss the same month in 2012. In February 2012, Tropicana’s table games revenue plunged a staggering 118 percent because of Johnson’s $2 million haul and a $4 million win by another blackjack player whose name was not disclosed.
“Sometimes you’re the bug and sometimes you’re the windshield when you employ this strategy,” Rodio said, laughing.
Jim Wortman, a former Atlantic City casino executive and internationally recognized gambling expert, said Tropicana’s strategy is reminiscent of the high-stakes play of yesteryear.
“It’s the old-fashioned, Las Vegas-style gambling. It’s what happened in Atlantic City early on, when people were out there looking for big gambling,” said Wortman, director of the Office of Gaming Education and Research for the Conrad Hilton College of Hotel and Restaurant Management at the University of Houston.
Throughout the years, ultra-high-stakes gambling has faded in the United States because of the fragile economy and the rise of Macau — a special administrative region of China — as the world’s casino hub, Wortman said. However, he characterized Tropicana’s high-limit wagering as a “retro concept” that could create a lucrative niche market — as long as the casino can absorb the occasional losses.
“If one place can be known for high-end, high-stakes gambling, then they’re going to attract that crowd,” Wortman said. “They’re going to bring a lot of excitement and good players to the property.”
Tropicana turned to high-stakes wagering in fall 2010, just months after billionaire investor Carl Icahn bought the casino for $200 million. Rodio said Icahn leaves Tropicana’s day-to-day operations to casino management but emphasized there would be no high-stakes gambling without the owner’s consent.
“He certainly is a proponent of it,” Rodio said. “Given the potential swings you get with that strategy, it certainly doesn’t frighten him.”
Those swings are reflected in Tropicana’s revenue totals.
Last year, Tropicana grossed $59.6 million from its table games, down 30 percent compared to 2011. December’s results showed just how volatile table games play can be. For December, Tropicana’s table games revenue plummeted 82 percent, largely as the result of a $2 million loss in its blackjack operations.
Rodio doesn’t mind when Tropicana’s losses are publicized. He said that when they are, it underscores the chances of someone winning a big jackpot.
“You can’t calculate the publicity, the sexiness and the aura at this place when the customers come in and win millions of dollars,” he said. “I think it creates an exciting atmosphere here. It creates a buzz around the property. ... It’s even more exciting when customers are winning.”
Under the high-limit policy, anyone can wager as much as $50,000 at any Tropicana table, Rodio said. There’s even a gold-colored $25,000 gambling chip at Tropicana, an emblem of the high-stakes strategy.
While significant high rollers such as Johnson grab the headlines with multimillion-dollar wins, the mid-level gamblers who start at $5,000 to $10,000 can build up their jackpots to $100,000, Rodio said.
Members of Tropicana’s exclusive group of premium players can bet as much as $100,000 per hand. When Johnson was up in the $100,000-per-hand stratosphere, Tropicana gave him an additional incentive by discounting 20 percent of his losses. Johnson said Tropicana is no longer willing to offer him those discounts, so he has stopped gambling there.
Although Johnson hasn’t been at Tropicana in recent months, other big bettors have been hitting the tables. In June 2011, one of them came close to matching Johnson’s highly publicized $5.8 million win, Rodio said. The ultra-high rollers include business people and sports personalities, but no movie stars or entertainers, Rodio said.
Unlike with Johnson, the identities of those big gamblers remain a secret. Casinos closely guard the names of their top players to shield them from the public and also to prevent competing casinos from luring such players.
Holding on to top players has become even more important during Atlantic City’s six-year revenue slump. Rodio said the weak economy has reduced the number of truly high-stakes gamblers.
“It’s not as prevalent as it used to be,” he said. “I don’t think it’s just at Tropicana, but across the entire city.”
Still, Rodio insists that Tropicana’s high-stakes play is key to drawing additional business.
“We get a lot of people who come here because of it,” Rodio said.
Johnson, however, is not so sure.
“I don’t think anybody is waking up in Macau, Hong Kong or Singapore and saying, ‘I’m going to Tropicana because I can play $100,000 a hand,’” Johnson said.
When they do come, the mega-gamblers often expect nothing less than private jet service, posh suites, sumptuous meals and other lavish perks from the casinos, Wortman said.
Wortman, who worked at Tropicana in the 1980s, recalled one unusual demand from a now-deceased Florida lawyer who would bet millions at the blackjack and baccarat tables.
“His big thing was raspberries,” Wortman said. “One time, we brought fresh raspberries in for him on the Concorde.”
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