Everybody knows that in the gambling business, the house always wins. That's how it's supposed to go, anyway. But casino billionaire Steve Wynn recently revealed that the month of April, 2017 was an exception to prove the rule, in a conference call reported on by Bloomberg. During this call, Wynn said that the thing that's supposed to be impossible in the high-stakes gambling business actually happened:
"We had probably the most unique statistical anomaly in my 50 years of doing this. And that is with enormous volume, one of our leading outlets lost money for the entire month."
According to Wynn, his Wynn Palace casino in Macau reported a $10 million loss for April, surprising even before you find out that monthly profits for the casinos can reach as high as $50 million. It happened in part thanks to the standard practice of hiring "junket operators" to bring potentially lucrative high-rollers into the casino and provide them with front money as well as private rooms and other amenities. The casino pays the operator a commission calculated by how much these high-rollers bet, while the casino itself is on the hook for the gamblers' winnings, should they occur. Suncity Group was the junket operator in question, and according to Wynn all the baccarat players had extraordinarily good luck in that particular month, unfortunately for the casino: "The bottom fell out and all of the players won millions of dollars."
Baccarat is known as offering some of the best odds available to gamblers, and for this reason attracts the highest-stakes bettors in the industry. Still, as Robert Hannum, professor of risk and gaming at the University of Denver, put it, there's a reason something like this is an extreme rarity:
"The odds are astronomically high. Of course, black swans do occur and some might say that anything can happen in the casino business."
The house advantage in baccarat is a relatively measly 1.2 percent, which put another way means that a gambler can expect to lose an average $1.20 for every $100 bet over time. To put that in perspective, some slot machines can be trusted to drain as much as $12 in that scenario, but Wynn's recent baccarat misadventure proves that the house can lose every once in a while – even if it ultimately only serves to keep people coming back for more.