Another Free Cruise from Norwegian Cruise Lines Casinos at Sea – how much did it cost me?

We have recently returned from a cruise on the Norwegian Breakaway from NYC to Bermuda for 7 days. Just like our previous two cruises with them, on the Norwegian Jade in Europe and on the Norwegian Epic from Miami for New Years Eve, the cruise was comped by Casinos at Sea.  I have to say I really had a blast, and I know that cruising isn’t for everyone, but it is fast becoming an annual event for us, especially at these prices…

Whenever I write about ‘smart decisions’ and Casinos I grimace a little.  Lets be clear here, Casino gambling is one of the dumbest thing that you can do with your money, as every single game in the Casino is set up so that the Casino wins.  However, if you are degenerate like myself, who enjoys the occasional punt,  then it is worth noting that the Casinos at Sea loyalty program is the very best one you could hope for in terms of comps.

Here is a good primer on the program, and how it overlaps with their regular cruise rewards program the Latitude’s Rewards Program Norwegian Cruise Lines – Stacking Casinos at Sea and Latitudes Loyalty Programs

This post is valuable because it is the first time that I have been able to accurately calculate the cost of a free cruise from the program.  And whilst there might be a degree of ‘carry over credit’ from my previous cruises, I think that the amount I gambled is a surprisingly low amount.  So much so that we figured they wouldn’t comp us again, and we decided not to purchase their onboard future cruise deposits.

It’s a bit of a long one, so here’s the abridged answer to the question, read on if you want to learn more about how comps really work in the Casino business:

Expected Loss= $2,000-$2,400

• Value of Comp $848
• Value of Free Chase Ultimate Rewards = $100-$1000 (depending on how you value them)
• Value of Free Booze = Priceless

Net Theoretical Cost to Cruise for Free (Range) Positive $100 to Negative $1400 vs buying a cruise outright.

Conclusion – Not a good option if you don’t gamble, but if you do, don’t, but if you won’t stop then cruising with NCL is a really great deal.

Free Cruise Alert

That is an email that either goes straight to spam, or, if I see its from Norwegian gets me very excited, somehow, despite me thinking I didn’t play enough, they want me back, and they offered us the following deal:

The negative here is that they offered only an Inside Cabin, but I have found in the past when I call up I can sometimes get a free Oceanview or Balcony, which I then make a paid, guaranteed upgrade on.  If you have read the primer post you will know that ‘FREE’ means a daily rate of $25 per person, plus Taxes and Port fees – which works out to be $350 for a week for two people, and another $250 for taxes and fees.  Add on $200 more and an Inside Cabin becomes a balcony.

How much do you need to gamble to get a Free Cruise with NCL?

Previously I was unable to accurately answer this question because I was exclusively a Table Games player.  Table players are comped using a different scoring system than slots, it has a similar structure but has more room for ‘wiggle’. However, in an effort to clean up my act I quit playing Tables, and on my 7 Day cruise to Bermuda I played slots for a little bit, since we got free drinks when playing I would sit down at a machine, order a couple of Old Fashioned’s and head off to a show.

Slot play comp is calculated as follows:

In slot play there are three terms to be aware of:

• Coin In – Number Of Spins of the Reels X Value Per Spin
• Coin Drop – Amount Of Money Inserted into Machine
• Win/Loss – You get that one I hope…

Most novice players make the mistake of thinking Win/Loss is the most important factor when looking for comps, but it is in fact Coin In.  And Coin Drop is the least meaningful, but people still think they can game the system with it by putting money in and cashing it out again endlessly (it doesn’t work…)

Now, when you hit certain Coin in Thresholds you receive ‘Status’ with Casinos at Sea.  Additionally to this status, you get comped cruises.  The number of Coin In Points from my last cruise, that triggered the new invite for me was 3100 Reward Points.

Knowing this firm number for the first time, we can figure out (within a range of probability)  not only how to get a free cruise, but how much the next ‘free cruise costs me’ by using the following formula:

Reverse Engineering the Rewards to Coin In: 3100 points x 5 = $15,500 Coin In

Remember that is not Win/Loss OR Coin Drop.  You can achieve $15,500 Coin In by putting in $20 and spinning away, each win adds to your balance, each spin reduces it but raises the Coin In number.

THEO – The Magic Number in Comps

Theo is shortened from Theoretical House Win.  The Theo depends on the type of game played, in Table Games the Theo of Blackjack changes based upon the rules (dealer hitting soft 17 raises the Theo because it is a house advantage) In slots Theo varies most by Denomination, with the Penny Slots typically having the highest Theo, and the High Roller slots having the lowest.  Gaming Boards of Control oversea the minimum amount that a slot can payback.

However, regardless of Theo, you earn the same Coin In>Reward points so actually matters less for slots than tables, it just means that over time a Penny Slot player will lose more than a High Roller, by percentage, but I digress.

Theo can be calculated many ways, the standard way for tables is Game Type x Bet x Time.  For slots they had to remove Time from the equation because a Table dealer forces game pace, but a player on a slot could sit there all day and only hit ‘Spin’ one time.  For that reason they calculate Theo on slots by Game Type x Coin In.

If we use Vegas (strip) odds for Penny Machines we would have a Theo as follows: 88.39% Payback = 11.61% House Hold

$15,500*11.61%= $1799.55 Expected House Win

However, what you can see from the Vegas odds image above is that there is a variable number between Strip Casinos and the others, it is clear to see that the less attractive a Casino is the more they incentivize players by offering better odds – you will often hear ‘the best odds in Vegas’, but never when talking about one of the sexy Las Vegas Strip megaliths.

The obvious question should be: Would a Cruise ship need to encourage players to play by offering the best odds on the ship?  It’s pretty clear that you have a captive audience, and most cruises depart from places without Casinos so there are lots of eager customers.  As such they are likely to increase the house hold to the Maximum allowed.

The next question is, what is the Maximum hold allowed, and who overseas it?  In Vegas the Nevada State Gambling Commission does this, and demands that minimum payback to the player is 75%, but we aren’t in Nevada anymore, we are at sea, with International Law at play.  Luckily for us, the Slot Machine software itself has limits on where it can be set for payouts, and the job of the Casino Manager onboard is to set it as low as possible as soon as a new machine joins the Casino.

The actual amounts are closely guarded industry secrets, which I have seen.  I can tell you that each machine type is different but generally the cruise ship Slots will be set at 80% for Pennies if possible, though some will start within a lowest setting in the mid 80s and go up slightly from there .  Since I have never set up machines for NCL (only Carnival and Holland America) I will use a range from the minimum that Nevada demands (75%) through to 88% as I doubt it would be higher than that.

Comp is paid out from Theo – if the house expects to win $1000 and they comp at a rate of 30% then you would earn $300 in comp. From the chart, we are now playing a guessing game, in order to narrow that down to a figure lets see what they are actually offering me as a comp, and work backwards.

Reality Check- how much is that ‘free cruise’ really worth?

So, we have a variable range of value from the comp, the exact amount is not know, but we can move on from here to the next stage in the equation, and in doing so we need to keep a close eye on reality.  Just like when booking flights in Business Class using points, the actual value of the points should be the lowest cost option to get the job done.  I say this because my last 2 award flights at checkout have given me the option to redeem 100,000 United Miles or pay $16,000 in cash instead.  I would be a fool to think based on this that my points are getting a value of 100,000/$16.000 or 16 cents each (but many a fool we have amongst us).

Therefore, in order to really compare value I cannot just take whatever number NCL spews out as their price for the cruise, I must find the cheapest available option, and work from there.  If you want to learn more about how to book the cheapest cruise, check out this post – Beginners Guide to Booking a Cruise

For the purpose of this experiment though, I will be using VacationsToGo.com pricing, as I think they are a solid place to find a good price – if I was really trying to get to the lowest possible price I would use CruiseCompete.com, but that would involve engaging real travel agents and I don’t want to waste their time on a theory (again…) out of the list of options above I would likely go from NYC since I like the ability to walk up and sail away therefore, a random date:

Norwegian Gem 12/4/13 Inside Cabin

• Casinos at Sea Price $25 per person per day plus Tax and Fees = $450+ T/F for two.
• VacationsToGo.com  $479 per person plus T/F = $958 + T/F (cruise perk of $100 onboard credit)
• NCL Website (for perspective) $479 per person plus T/F = $958 + T/F

So, our ‘free’ cruise here is approximately half price, however, as I mentioned previously I wouldn’t sail in an Inside Cabin, so I called in quickly to ask about the price for a Balcony upgrade.  That was an additional $300 per person.

Norwegian Gem 12/4/13 Balcony Cabin

• Casinos at Sea Price $25 per person per day plus $600 upgrade plus Tax and Fees = $1050+ T/F for two
• VacationsToGo.com  $949 per person plus T/F = $1,898 + T/F (cruise perk of $100 onboard credit)
• NCL Website (for perspective) $949 per person plus T/F = $1,898+ T/F

In this example, the upgrade garners less value (as a percentage) over the intrinsic cost, but does create more dollar for dollar saving from the comp aspect:

So from this, we could estimate that they are likely holding something between 11%-16% for the House Theo, and from that comping something in the 20%-25% based upon Theo.  Not too bad really.  However, the big skew in this example is the large upgrade cost.  In the past I have been offered upgrades to a Balcony from $120 per person, and once was offered a Balcony right off the bat – making the comps that much more valuable, lets hope for another one of those offers!

Free Credit Card Points – Yes Please!

Last considerations for calculation purposes (that may interest points orientated cruisers) I was able to charge $1,000 at a time to my cabin from the Machine. this can be cashed out without play, and you don’t even need to see a cashier since there is another machine that takes the voucher and spits out $100 bills.  My previous experience allowed me to take up to $2000 per day PER CARD from the tables, but that came with a 3% service fee.  I imagine that I could also take $2000 per day PER CARD from the Slots for no fee.  If you just used one card you could generate $7,000 minimum spend, $14,000 if the real daily amount is $2,000 like the tables, and multiples of $14,000 if you change cards (involves heading to the pursers desk and changing the card on your account)  just be aware that you are being tracked and they might want to know what is happening.

Also, I do not have status required to waive the fee, as a lowly Casinos at Sea ‘Lucky’ level player, but I might get preferential treatment on the fee due to the prior table games relationship – therefore, if you plan to do this I recommend you draw say $20 on the account first, cash it out.  Head to the Pursers desk and ask for a statement – if it says $20 you are good to go, if it says $20.60 you are paying a 3% fee and it is a losing strategy.

If it works for you like it did me, I suggest the Chase Sapphire Preferred, for 2x on Travel as the best card or the BarclayCard Arrival for 2x on everything (redeemed at 2.22% for Travel as a good back up.  This could be a great way to wrack up 14,000 Ultimate Rewards, or 28,000 if you can get $2K a day, or 56,000 if you get two cards going… which makes quite the offset.

Oh, and in case you were thinking that my $15,500 was a lot, it worked out to about 51 minutes play over 7 days, and due to a hurricane, 4 of those were at sea, all of them involved me sitting down for 5 minutes in order to get 2 free cocktails (maybe more than once a day!)

Trip Report – NCL Breakaway from New York to Bermuda 2013