# Increasing Blackjack Revenue Through Blackjack Side Bets – Part 1 – GGB News

As a proactive table games manager, you realize the importance of implementing a side bet on your main blackjack games. What you need to decide is which type of side bet would best suit your casino operation and the customers who frequent the table games. You need to have a grasp of the rules, objectives, and procedures so you can provide an enjoyable and profitable gambling alternative. An understanding of the side bet’s mathematical edge is important to determine how much additional revenue the investment in training time, promotional expense and proprietary cost will produce. In addition, the wise executive needs to establish a guideline for determining the performance of the side bet, and an understanding of the side bets profitable life cycle so that you can gauge when it’s time to shop for a new alternative.

##### Understanding the Profitability of Side Bets in Blackjack

Side bets have become popular primarily because customers have grown bored with the basic game of blackjack, as well as becoming attracted to alternative table games. Players are looking for a better entertainment experience. They want more “gamble” than is presently provided by blackjack alone. One question the casino executive should be asking himself is, “how much revenue can I realistically expect a side bet to produce?” This answer is based on several factors.

• How much side bet utilization can I expect on each table?
• What is the mathematical house advantage of the side bet?
• What will the amount of the average bet be per side bet wager?

The executive needs to establish a benchmark for side bet utilization by the average blackjack customer. Utilization represents the percentage of players who wager on the main blackjack game, but also are attracted to placing a wager on the side bet. For example, if you have twenty blackjack customers wagering on the main game, and five of those players are also wagering on the side bet, you have a utilization percentage of 25 percent. The percentage number I use as the minimum utilization percentage is around 15 percent. A successful side bet utilization percentage would be about 50 percent or greater.

The mathematical house advantage of the side bet is also important. You want a side bet with a higher house advantage than the main blackjack game since the side bet average wager will usually be less than the main bet, however you do not want a mathematical edge that is so high that the players do not feel they are getting a worthwhile “bang for their buck”. If the mathematical advantage is too low, you will not receive profitable revenue return, and if the percentage is too high, your side bet will not build a loyal customer base.

The average amount wagered on the side bet is another element to be considered. Some side bets will perform well with a lower average wager due to the nature of the payoff schedule and the degree of risk which with upper management will feel comfortable. For example, you do not want a 1000:1 payoff, even if the hit probability is extremely low, and allow for a maximum side bet wager of \$100. Other payoff schedules involve lower pay multiples over a wider array of payout possibilities. If the maximum payoff multiple is 10:1, a maximum wager of \$100 might be acceptable.

##### Developing a Revenue Projection for Your Blackjack Side Bet

For this example, I will use a popular blackjack side bet, “21+3”. This side bet is supported by several pay schedules, so I will choose the most common schedule with multiples of 9:1 on combinations of three card flush plus a pair or higher. The mathematical house advantage of this side bet is 3.24 percent. Let us establish that the casino in this example is in a location that caters to primary localized blackjack customers and is naturally subject to a higher utilization percentage. In this example we will project a conservative utilization percentage of 25 percent. In addition, we will estimate that the average side bet wager will be about \$8 based on the minimum wager of \$5 with a maximum limit of \$50.

If your casino normally services an average of 100 blackjack customers per day who will stay and wager on your blackjack table for an average of 2.5 hours (approximately 175 hands), the casino can expect to earn approximately \$1,100 a day in theoretical win (T-win) from this side bet. The calculations are:

17,500 hands/wagers on the main blackjack game [175 X 100= 17,500]

4,375 wagers on the 21+3 side bet [17,500 X 25% (utilization%) = 4,375 side bet wagers]

[4,375 side bet wagers X \$8.00 (avg wager) X 3.24% (side bet H/A%)] = \$1,134 side bet T-win

The side bet estimated T-win amount can be used to justify the use of specific side bets and their proprietary monthly costs. Utilization percentages can be used to determine the success of the side bet once the option has been implemented on the table.

Going forward I intend to publish several articles regarding the strategies and tools that the table game executive can use to increase revenue of their casino’s blackjack games. For now, I will focus on maximizing the casino’s profit potential with blackjack side bets.