…issued a press release:
(LAS VEGAS, Nev.)-Cynthia Jay was smiling ear to ear as she walked into the news conference at The Desert Inn Resort in Las Vegas today, and well she should. Last night, the 37-year-old cocktail waitress won the world’s largest slot jackpot-$34, 959, 458-on a Megabucks machine. She said she had played $27 in the machine when the jackpot hit. Nevada Megabucks has produced 49 major winner in its 14-year history. The top jackpot builds from a base amount of $7 million and can be won with a 3-coin ($3) bet.
a) How can the Desert Inn afford to give away millions of dollars on a $3 bet?
b) Why did the company issue a press release? Wouldn’t most businesses want to keep such a huge loss quiet?
How can they afford such a big payout ?
With the money the 34,000,000 other people lost, $3 at a time.
They take in money by the boatload (well maybe only half a boatload these days, but you get the idea).
Their air conditioning bill is probably bigger than that.
Second, they buy insurance on these jackpots, so the insurance company picks up the tab. (The insurance companies offload the risk to other insurance companies in a practice called re-insurance. The pain is well spread around.)
They publicize this so that more suckers will show up figuring "If this woman can do it, so can I." That leads to many, many small wins.
Don’t worry about the "losses" of the Las Vegas casinos.
They are doing ok.
January 28th, 2010 at 9:31 am
How can they afford such a big payout ?
With the money the 34,000,000 other people lost, $3 at a time.
They take in money by the boatload (well maybe only half a boatload these days, but you get the idea).
Their air conditioning bill is probably bigger than that.
Second, they buy insurance on these jackpots, so the insurance company picks up the tab. (The insurance companies offload the risk to other insurance companies in a practice called re-insurance. The pain is well spread around.)
They publicize this so that more suckers will show up figuring "If this woman can do it, so can I." That leads to many, many small wins.
Don’t worry about the "losses" of the Las Vegas casinos.
They are doing ok.
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