Don’t bet on it: The hidden risk from portfolio counting
What is portfolio counting
As an advantage player (AP) why limit yourself to positive situations on one bet? As online operators have long known, an AP targeting multiple bets (portfolio counting) can triple her profit per shoe. For instance, an AP targeting one bet, in Macau, has a positive EV situation one to three times a shoe, but by leveraging portfolio counting an AP will make around seven bets per shoe.
Chart one: number of hand with positive player EV per shoe
Note: this analysis assumes a typical Macau gaming table
We asked the HexGaming GenAI bot to design an optimal wagering strategy which allocates wagers across bets to maximize profit while minimizing risk of ruin. The resultant mix of wagers is summarized in Chart Two
Chart two: Mix of wagers for a portfolio better in Macau
An AP using portfolio counting can amplify her profit per shoe by roughly three times or more versus flat-betting on one bet alone. For instance, an AP targeting Super Lucky Seven with flat betting can expect to earn .27 units per shoe on a total wager value of roughly seven units but if she adopts a portfolio counting strategy on the same seven units wagered where can expect a profit of 1.04 units!
Chart three: Units per shoe profit on 7 units wagered under different counting approaches
In the best case scenario when targeting one bet, there is less than 20% likelihood (typically around 8%) of a shoe yielding positive profit, but using a portfolio counting approach, an AP can lift the odds of a positive profit to close to one in three shoes!
Behind the mask
Online operators have long dealt with advantage bots but we first noticed a proliferation of advantage players targeting Baccarat side-bets at bricks and mortar properties in 2021. This proliferation paralleled the expansion of BA side-bet offerings especially lucky six. In Vegas this was largely blackjack advantage player migrating from game with tight supervision to a game where supervisors assumed there was little risk. In Asia things are more professional. Typically, teams include members who monitor the tables, a leader with the bankroll, an orchestration member located behind a computer screen offsite. COVID has made this process with the teams on the floor routinely wearing masks concealing microphones.
Interested readers should read the published accounts of the advantage play team prosecuted in Singapore in 2023.
The popularity of electronic table games (ETG) has further hastened this abuse. In fact, of the teams identified in Macau most were targeting ETG games. ETG games are a clear weakness for two reasons:
It is easier for an AP team to monitor multiple games simultaneously
Unlike tables where smart-table vendors like Walker Digital make accessing bet level transactions easy, ETG vendors do not make this bet level transactions easily available. Vendors like Acres Gaming are starting to fill this void with screen recording technology.
An online a market-place exists for AI powered Baccarat advantage play apps. For instance:
Exhibit one: Online Baccarat advantage play app
Example of AI driven Baccarat Counting App
At one client site, we estimated that advantage play bots reduced edge and thus revenues by double-digits. And this isn’t half of it. Volume based rebates further depresses net gaming revenues and operator know the risk and typically cap side-bet action later in the shoe. As a result side-bet GGR for online sites is roughly half of a bricks and m0rtor casino.
The difficulty of identifying portfolio counters
Traditionally casinos correlate a players wagering with known counting systems but portfolio counting is actually also camouflage counting where multiple signals can contradict; further obscuring rare events.
Unmasking advantage play teams
AI giveth and AI taketh away: just as AI is amplifying the risk from advantage play so is AI addressing the risks. The team at HexGaming using GenAI has developed a streaming approach to integrity to both monitor weaknesses on the floor but also identify APs proactively. We estimate there is mid-single-digit upside for Asian casino operators but double-digit upside at online operators from rethinking advantage play mitigation.
