LAS VEGAS — In the days before the Chinese New Year celebration began this week, six high rollers sat down at the private baccarat tables one day at the MGM Grand in Las Vegas and began throwing down wagers of $100,000 to $200,000 a hand. It was a scene hardly out of place these days in Sin City.
Big-time gamblers, primarily from Asia, are flocking to Las Vegas to play baccarat and providing a big lift to the overall bottom line of the city's casinos.
Baccarat has easily surpassed blackjack in terms of casino revenue in Las Vegas and now represents nearly 60 percent of the MGM Grand's table games revenue over the past year. It's especially popular this week with tens of thousands of tourists from Asia in town to celebrate the Chinese New Year.
"For us to make money in gaming today without baccarat is almost impossible," said Debra Nutton, senior vice president of casino operations at the MGM Grand hotel-casino. "We need the big whales to make money."
In Las Vegas parlance, a "whale" is a big-time gambler who easily wagers more in one night at the tables than most American families make in a year. Casinos cater to them with plush, secluded gambling salons inside the top casinos – with baccarat games that often start out at a minimum $10,000 per hand.
The whales typically favor baccarat – a game romanticized in James Bond flicks and highly popular in Macau and Singapore.
The game is built on a simple premise: Who will end up with a better hand, the player or the banker? Gamblers are dealt two cards and predict whether they will beat the banker, typically a position that rotates among the players at the table. Smaller tables, known as midi-baccarat, start at $100 limits and look more like large blackjack tables, skipping the rotating banker and leaving that role to the dealer. Even smaller-limit tables are called mini-baccarat.
Nevada figures show that during the 12 months ending Nov. 30, casinos statewide won $1.27 billion from baccarat players, with the game offered at 258 total tables in 24 casinos. Blackjack, meanwhile, pulled in just $1.03 billion – even though it was offered across 2,810 tables in 151 casinos.
While casinos hope to pocket 12 percent of the money wagered on baccarat, the large amounts played in fewer bets mean big swings in revenue quarter to quarter, depending on how lucky the gamblers are.
Slots are still the most popular and lucrative form of gambling in Nevada, with nearly 165,000 machines over 330 locations including supermarket, gas stations and airports.
Baccarat has been the most lucrative table game since 2009, and has been increasing its share since then, according to an analysis of gambling revenues by Dave Schwartz, director of the Center for Gaming Research at the University of Nevada, Las Vegas.
That's even though the game isn't widely offered, he said.
"The real high-end play is happening in maybe six or seven casinos," Schwartz said.
As Americans struggled during the Great Recession, Las Vegas casinos have worked harder to increase tourism from wealthy international visitors, especially Asians. Their game of choice, casinos say, is baccarat.
The MGM Grand is among those Strip casinos counting on their highest of high rollers coming to town this weekend for the Chinese New Year. Nutton said her casino could double the number of baccarat tables during the Chinese New Year and still be busy.
In addition to private flights and luxury accommodations, Nutton said casinos around Las Vegas attract baccarat play year-round by offering high-roller tournaments with million-dollar prize pools.
One three-day tournament held at the MGM Grand's mansion casino in early October cost $5,000 to enter and offered the winner $750,000, seven others at least $10,000 each, all participants a brand new tablet computer and a drawing among finalists for a 2012 BMW convertible.
Similar tournaments run several times a year around Sin City, Nutton said, in hopes that entrants will also play on their own and come back to each particular casino again.
Wynn Resorts Ltd. and Las Vegas Sands Corp., which run two casinos each on the Las Vegas Strip, derive the majority of their revenue from Asia, where baccarat is the undisputed king of games.
Caesars Entertainment Corp., which owns or manages 52 casinos in 12 U.S. states and seven countries, reported $6.66 billion in revenue from baccarat during the first 9 months of 2011. Over the same time, Sands – with four casino-resorts in baccarat-heavy Asia and three in the United States – beat that with $6.87 billion.
The casinos are fiercely competing for a relatively small number of players who can afford five- or six-figure bets, Nutton said.
"There's only that select universe," she said.
Schwartz said that if casinos become more dependent on baccarat's bottom line, they're in for less predictable results. From 2004 to 2010, baccarat showed to have the biggest variance among casino games in its hold percentage, the amount of money casinos keep from the amount wagered.
Hold is generally governed by complex math, designed so gamblers slowly lose money and the house always wins overall.
Between 2004 and 2010, the average hold for baccarat was 11.7 percent, but casinos statewide saw monthly hold for the game as high as 19.5 percent or as low as 3.6 percent.
If a player gets lucky one day and quickly wins several million dollars, casinos are reminded of it when they report their quarterly results, Schwartz said.
"A lot of the more business-oriented folks don't like this kind of volatility in the company," he said. "It's lucrative, but it's also risky."
Steve Rosen, chief marketing officer at Santo Gaming , which runs the Plaza Las Vegas casino in downtown Las Vegas, said he still expects baccarat to become more popular as more people learn to play, casinos add more tables designed for smaller limits and companies keep pushing to attract Asian customers.
"I think a lot of casinos are trying to, they just don't understand how yet. You're going to see more and more baccarat and you're going to see baccarat become more mainstream," Rosen said. "You can't have 91 percent of revenues across the world coming from one game and not have people here paying attention to it."
Tim Fong, co-director of the UCLA Gambling Studies Program, said several cultural factors among Asians combine to encourage gambling, especially during the holiday.
Generations of Chinese citizens, for example, accept gambling in society and also strongly value notions of luck and predetermined destiny, Fong said. Many lived as farmers or peasants before China liberalized its economy, and looked forward to the new year in part because it was the only time they could take a genuine break from work.
"It's much more driven by (the idea that) things are predetermined. It's kind of, well, this is our opportunity to almost test the fates, test our luck as to what's in store for us for the next coming year," Fong said. "There's a lot of value placed on if you do and win really well ... then you're going to have a great year.
"It's kind of like a little litmus test, if you will," he said.