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Developing a Table Games Analytics Strategy

Apr 28, 2017

Data is all around us. In fact, the amount of data being produced is doubling every 3 years per a recent IBM report. This explosion in data created a need to analyze it and a growing field – analytics.

Analytics is the discovery, interpretation, and communication of meaningful patterns in data. Although the definition is precise, the word as it is used can mean different things to different people. This article attempts to outline a useful framework to think about analytics and how that can be applied to table games.

What Do We Mean by Analytics?

Analytics can be categorized into following four groups, each of which is more valuable and more complex than the previous category to produce:

Descriptive Analytics: Analytics of this type typically answer the question “What happened?” Eg. What happened to my win this month vs the same month last year?

Diagnostic Analytics: These types of analytics typically address the question “Why did it happen?” Eg. Why was my win lower by 5% vs last year?

Predictive Analytics: These types of analytics predict/forecast future outcomes eg. “What will happen?”. The prediction usually uses historical data patterns to estimate future outcomes and then the business may be tasked with identifying actions to influence that outcome favorably. Eg. Given that my win is lower this month by 5% vs last year, what will it be next month?

Prescriptive Analytics: These types of analytics are action-oriented and address “How can we make something happen?”. This is the most valuable kind of analysis that identifies actions to be taken in order to achieve certain outcomes. Eg. How can I grow my win by 5% YoY for the remaining 6 months of the year?

Although every analysis is trying to answer the question “How can performance be improved?”, reality is that the further we are from prescriptive analytics, the more assumptions we must make and hence accept a lower probability of achieving desired outcomes. Let’s look at applying the framework for table game analytics.

Applying Analytics Framework to Table Games

As an illustration of a typical scenario for table games analytics, let’s assume the performance of Q1 for the current year is being reviewed:

Descriptive analysis will answer the question, what happened to my win vs last year and the answer could be win was lower by 5% vs Q1 prior year. While that is useful to know, it neither improves understanding nor aids in how to change this for the remainder of the year. This is an example of descriptive analytics and is prevalent in most organizations in the form of reporting.

Diagnostic analytics would dig deeper and ask the question, why was my win lower by 5% vs last year? The answer to that question could be that we saw a weakness in Baccarat segment. While this aids understanding of the cause of the soft performance, it provides only a vague guideline to improve performance i.e. let’s focus on Baccarat. It is also important to note that this category of analytics does not distinguish between controllable (and hence actionable) vs uncontrollable factors when it comes to causes.

Then there is the approach of predictive analytics which attempt to forecast what might happen in the reasonable future. Here we take current trends and project what the next month or quarter might look like. Since historical trends are being extrapolated, the same weakness for Baccarat will extend into the coming months leading to a similar conclusion as with the diagnostic analytics i.e. focus on improving Baccarat performance. Once again, there is not much specific actionable insight to improve performance that can be immediately acted upon.

Contrast the previous three approaches with the prescriptive approach to analytics. The question would not be what happened or why it happened, rather it would focus on how can we close the 5% gap between current trend and last year’s trend. This could then identify that we have been pricing Baccarat lower during high demand periods, resulting in missed yielding opportunities. Or maybe a new operating procedure resulted in a lower game pace which resulted in a lower win. Notice that this type of analytics focuses on actions that can be taken to specifically improve performance. They also allow us to go back and see if those actions were performed and measure the effects and compare them vs our expectations.

Conclusion

All of us would like to have prescriptive analytics. However, as the graphic below illustrates, the increased value in prescriptive analytics comes at the cost of increased complexity. So in order to get the most out of it, there has to be an iterative analytical process set up to leverage the output.

Building such a process allows us to cross the chasm from simplistic analytics that reveal superficial symptoms, to analytics that identify the deep-rooted causes with specific actions to fix them and improve performance – something we can all agree is the sole purpose of having analytics!

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Author(s)

Varun Nayak

Varun has over 15 years of experience in technology, finance, and casino analytics. Previously, he oversaw gaming optimization and established analytical processes to measure and improve profitability at Sands China in Macau and Caesars Entertainment in Las Vegas. Varun is a computer scientist by training and received his MBA from UCLA Anderson in Finance and Strategy.

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The Star - Sydney

“Due to our ongoing success with Tangam at Sydney, we’re able to deliver the right product at the right time, leading to improvements in efficiency, transparency, decision-making and our bottom line.”

David Croft

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General Manager Product & Strategy

View Press Release

Mohegan Sun

“We’d like to thank the exceptional team at Tangam Systems for what has been a very successful implementation that we undertook together. We immediately saw positive returns and an improved guest experience. Our team is very much looking forward to continue leveraging Tangam and all it has to offer from a floor optimization standpoint.”

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What Clients Say About Us

Caesars Entertainment

“[Tangam’s] real-time data gives us a deeper insight that allows us to quickly adjust to customer needs, while also establishing new business goals and tracking the success of our strategy.”

Melissa Price

,

SVP of Corporate Gaming

View Press Release

Mohegan Sun

“Reporting alone doesn't provide answers. We chose SODA for its highly differentiated offering that provides a clear set of actionable recommendations, which maximize gaming performance and the guest experience.”

Jeff Hamilton

,

President and General Manager

View Press Release

Sycuan Casino Resort

“During our initial trial, it was amazing to see how quickly we were able to get to the answers in our data through the lens of SODA. This truly made analytics available to anyone - with intelligent recommendations, intuitive visualizations and seamless drill-downs. We are equally excited about the product roadmap over the coming months.”

Sierra Weyer

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Director of Enterprise Analytics

View Press Release

Mohegan Sun

"Extending our partnership with Tangam to our full gaming operation, including tables and slots, was a no-brainer given Tangam's proven track record of business support."

Jeff Hamilton

,

President and General Manager at Mohegan Sun

View Press Release

Sycuan Casino Resort

"Sycuan is dedicated to providing an enhanced gaming experience for our patrons. By deploying powerful prescriptive analytics tools such as TYM and SODA, our operations and analytics teams are able to get data-driven insights at the right times to drive value to our business."

Douglas Vogelei

,

Senior Vice President of Casino Operations

View Press Release

The Star - Sydney

“Due to our ongoing success with Tangam at Sydney, we’re able to deliver the right product at the right time, leading to improvements in efficiency, transparency, decision-making and our bottom line.”

David Croft

,

General Manager Product & Strategy

View Press Release

Mohegan Sun

“We’d like to thank the exceptional team at Tangam Systems for what has been a very successful implementation that we undertook together. We immediately saw positive returns and an improved guest experience. Our team is very much looking forward to continue leveraging Tangam and all it has to offer from a floor optimization standpoint.”

Kevin Lowry

,

Vice President and CFO

View Press Release
Read All Testimonials