Roulette high-roller almost 86'ed

Saw this happen Sunday night at the Eldorado in Reno. Could also apply in BJ.

A roulette system player was betting the max "inside" - black chips. He had a partner playing the same system. He signed a $5000 marker and gave the 50 black chips to his partner who then also bet the max on the inside numbers. The PC came up and warned them they would both be 86'ed for playing from a common bankroll. He said, "We are not playing a common bankroll. Can't I make a loan to my friend?"
His partner then quit playing and he continued. The PC wondered aloud why his partner had not signed his own marker, since he had a similar credit line.

The PC did not like the fact the "partnership" was exceeding the table maximum of $100 on the inside by both betting $100 on the same numbers. I was surprised they would make this fine distinction to such a high roller who was losing big that night. I also saw them playing on Friday and Saturday night and believe they lost big then also. Obviously, six different players could each bet the $100 max on the same numbers, so the casino exposure limit is really $600 on the inside.

Was this a dumb business decision?

A casino could be hit for several million on an extremely lucky streak by the partners. No properly financed casino should be vulnerable to this, but there is also the question of the pit in question wiping out their profits for that quarter, if the casino is not too large.
There is even a mild possibility that these were, or more likely the casino believed they were, advantage players. Wheel predictors and bias players may be few and far between, but those who can do it would be a serious threat to the casino betting at those stakes. I'd back the casino every time though.

The casino has an advantage of 2/38 = 5% with odds of 35:1. The Kelly optimal bet is (2/38)/35 = .15% of bankroll. A $200 bet is optimal if the bankroll is $200/.0015 = $133,000, well within the casino budget. John May's comment about risking "millions" is wildly exaggerated; they can only lose $7,000 per spin! Since the gamblers only bought in for $5,000 they are hardly a threat.

The only reason I can think of to limit their bets is to get them to play longer. At $100 per spin their money will surely grind away. But at $200 they might actually win enough to quit.

The casino has an advantage of 2/38 = 5% with odds of 35:1. The Kelly optimal bet is (2/38)/35 = .15% of bankroll. A $200 bet is optimal if the bankroll is $200/.0015 = $133,000, well within the casino budget. John May's comment about risking "millions" is wildly exaggerated; they can only lose $7,000 per spin! Since the gamblers only bought in for $5,000 they are hardly a threat.

My understanding was that the poster was talking about six different bettors placing $100 bets ie $600 rather than $100. In addition, pure Kelly is far too aggressive for a casino. Virtually no blackjack professionals use it and they don't have to factor in the huge expenses of running a casino, which are also almost always insanely risk-averse. A 13.5% risk of ruin is far too high for a casino.
This may surprise you, but many sawdust joints I know of would hurt, if not actually fold, after weathering as little as a $400,000 loss (the required Kelly bankroll adjusting for $600 instead of $200). But, in any case, by mentioning an "extremely lucky streak" I was clearly not talking about an event which happens 13.5% of the time, but something more like a 4SD event+, ie one in tens of thousands. Then we are talking about potential liabilities of millions. Given the Benthamite utility business operate under, ie losing a fortune is far worse than losing it, the casino with poor capitlaization would have been wise to stick to its own rules.

In addition, your comment that they can lose only $7,000 a spin is a little off the mark. Numbers do repeat. I hit three consecutively in a roulette promotion a few weeks back. The day before I hit two consecutively to finish second in a roulette tournament. I was very lucky, but I just mention this to illustrate these things do happen and someone has to pay up.

Given the Benthamite utility business operate under, ie losing a fortune is far worse than losing it, the casino with poor capitlaization would have been wise to stick to its own rules.

This should read "ie losing a fortune is far worse than the possibility of doubling it compensates for".

"In addition, your comment that they can lose only $7,000 a spin is a little off the mark. Numbers do repeat."

Could you explain how a number can repeat within "a" spin, meaning a single spin?

Also please explain how a casino can lose more than $7k on a single spin by taking a $200 bet on that spin at 35-1 odds.

I think KL's point is that numbers can obviously repeat on multiple spins, but at $7k max risk per spin and the BR stated, the risk is low of the player hitting that many times in short order.

"In addition, your comment that they can lose only $7,000 a spin is a little off the mark. Numbers do repeat."

Could you explain how a number can repeat within "a" spin, meaning a single spin?

Explain to me how I implied this. I said it was "off the mark" which means not to the point. It does not imply it was factually incorrect.

I think this may have more to do with the El Dorado than anything. Although I don't really understand their logic in the roulette example, I know they watch players closely there. I'm speaking from personal experience, having been 'uninvited' to play any more BJ there.