June 2010

Video Poker: Spending A Penny, Waiting For Change by LInda Boyd

Not too long ago I did a podcast with American Casino Guide author Steve Bourie, www.americancasinoguide.com, entitled "The Changing Face of Video Poker." Many things in the world of gaming are different today, some to accommodate an economy stuck in a recession, while others are to spark new interest in the games. In fact, even the term "gambling" is now a more politically correct "gaming," although I use the two equally and interchangeably.

I got the idea of spending minimally and waiting for change (money) as well as change (differences) from Dewey, one of my forum members. (Boyd's Eye View, BEV, is a free video poker/gambling forum in partnership with Midwest Gaming & Travel, www.midwestgamingandtravel.com. Press the BEV icon to read the latest and get membership sign-up instructions.)

Dewey's definitely a low-roller, but knows an amazing number of angles to get the best odds for his dollars. Of course if you pay with a penny then it's ludicrous to expect change, or is it? For some, I'll call them the smart players, you can spend a small amount, say a penny, and expect both literal and figurative change. Why? Because marketing executives discovered that to attract volume they need some winning players and games. That doesn't mean they'll give away the ranch, or even a Ferrari for that matter, but they must provide people with reasons to come to their house.

Marketing experts learned that a few good games will draw a large number of players even though everybody in the crowd won't be able to get in on the play. That's because there will be a limited number of devices with good expected returns (ERs) and we all know true gamblers would rather lose the rent money than remain idle for any length of time. In fact, this characteristic accounts for the success of promotions that draw in the masses. If your favorite machines or table games are full then what's an action junkie to do? We all know being a spectator is not a serious option.

Spending A Penny, Waiting for Change: As far as casino policies go, low-rollers and whales live in two separate worlds. Honestly, things haven't changed too much for the big-bettors, except, of course, they are fewer in number. If you come ready to bet large, then you'll still get the red carpet treatment from casinos. Not only that, but you won't see major differences in games available. (There's a truly funny story, though, about a huge casino snafu when they rolled out a full pay deuces wild machine, the ER is 100.76%, for a high roller betting $300 per hand. He proceeded to take them to the cleaners.) Casinos can't go overboard with their theoretical edge if they want their high stakes players to return but they won't give them an advantage over the house, either.

Marketers can make a lot of advertising hay by offering a few good video poker pay schedules in low denominations without a big risk to the casino's bottom line. One reason is that they can honestly point to the expected return (ER) as being over 100% for games like 10/7 Double Bonus (10/7DB has an ER of 100.17%), but still not worry about losing money. In order to get the ER you have to play computer-perfect video poker and very few players can do that. This is especially true for low-denomination gamblers since pros stick to good plays on higher denominations. After all, who can live off the theoretical advantage of $1.70 per hour with perfect play? ($1.25 x 800= $1,000 coin in; $1000x .0017= $1.70) In reality the average Joe will only get around 98% ER on 10/7DB due to the game's complexities and the fact that he won't study correct play.

You can clearly see the most logical place for upgraded game-changes benefit the low-wagering recreational player. Be aware that if the game has a positive ER for players you won't find it on 10-play and 100-play devices even in low denominations like quarters. The last thing management teams want is to draw the pros, so plan on single-line games, mostly in quarters.

Literal Change (Cash): Any time the selected video poker game offers a positive theoretical return you can be sure technically perfect play and long term results are implicit. With this in mind, you'll have to take the time to be a smart player to have a true advantage over the house. Does this mean casino owners can be expected to hang out at Hollywood and Vine with a tin cup in hand? Not at all. Most patrons simply won't bother to read video poker books, bring pay schedule tables or strategy cards or even practice on the software. But for those few that do, they'll have a slight advantage over the house (you didn't expect a huge one, did you?) and over time will be ahead on their small investment.

Positive Expected Return: Believe it or not there are still video poker games with positive ERs if you take the time to find them. You will need to bring pay schedules with you or memorize them before leaving home. (You'll find free, removable pay schedules in my book, "The Video Poker Edge.") A few examples are 10/7 Double Bonus (10/7 DB), FPDW, progressives of all sorts once the royal reaches a specific amount and other games under certain conditions.

Table 1.1: Games with Positive Expected Returns

Full Pay Deuces Wild 100.76%
Full Pay All-American 100.72%
10/7 Double Bonus 100.17%
10/6 Double Double Bonus 100.07%

Sometimes Positive Expected Return: You don't need a math degree to add the cashback to the game's ER. Often casinos offer multiple points, especially during slow times, to further increase the ER. For example, if the game is 9/6 Jacks or Better (9/6JOB), the casino's cashback rate is 0.25 and they're having a triple points promotion, then it becomes a positive play. 99.54 (ER for 9/6 JOB) + 0.75 (0.25X 3) = 100.29%.

This is also true of progressive jackpots at some point (specifics are in my book), even though the volatility increases as the reliance on a long-shot royal is needed to achieve the expected return. I'm not even factoring in the value of comps and other perks offered by the casino to make these video poker plays positive. They make the game an even better choice though.

 Table 1.2: Games with Sometimes Positive Expected Returns *

Not-So-Ugly Deuces Wild (NSUD) 99.73%
Full Pay Pick'Em 99.95%
9/6 Jacks or Better (9/6 JOB) 99.54%
8/5 Bonus Poker (8/5 BP) 99.17%

*Note that the ER is close and becomes positive after adding the cashback/bounceback cash.

Tutorial Software: You may think that the average Joe simply can't learn the correct game strategy since there are so many possible dealt hand combinations as well as so many games. The truth is you can learn the basics for a few core games and you'll be able to find some or all in casinos offering video poker games. You will have to invest around $30 for practice software and play at home before going to a casino. My favorite tutorial software is WinPoker by Dean Zamzow, www.videopokerpractice.com.

Just learning to play frequently dealt hands correctly will dramatically improve your skills and give you more chances to "get lucky." With Zamzow's software you'll be able to play 100% computer correct if that's your goal or less than perfect if you don't have a lot of time to practice.

Combining Promos, Cash and Free Play: Sometimes the base game has an ER slightly less than 100%, like 9/6 JOB (99.54%) or Not-So-Ugly Deuces (99.73%) and it is not even available in a progressive version. You can still come out ahead when the slot club cash, bounceback cash or multiple points promos added to the ER come to over 100%. This happens frequently when the games in Table 1.2 and others close to 100% ER are included in the promos. Make sure you have a pay schedule with you so you know you've found the right game.

The Value of Comps/Gifts: Personally, I don't add the value of most gifts to the ER since rarely would I go out and buy most of their "presents." For example, you won't find me dining in logoed t-shirts or wearing a fanny pack emblazoned with the name of my local casino. However, gift certificates, especially for stores where I shop or gas cards are most welcome. You should be honest with yourself by making sure the gift, food comp, or any other perk has value to you. Be careful to not overvalue your equity in a promotion.

For example, I have seen people spend hundreds of dollars to earn enough points for a free apple pie or that milkshake-maker that you simply can't live without. In short, you must be reasonable and honest with yourself when you're trying to earn extra contest entries or enough points for the "free" gift.

Video Poker Versus Slots: I know a lot of players like slots and I can't blame them with some of the fun bonus rounds on the newer games. I can't think of a single instance where they were excluded from promos or slot club cash. The problem is, unlike video poker, it's always mystery meat. You can have side-by-side devices and they can appear to be identical games, but the ER may be different. You have no way to be certain of the return for the game since the chip is not visible. You can be sure of the ER for video poker games because it's based solely on the pay schedule. (There are a few exceptions in states like New York because they are video lottery terminals, VLT's, and the jurisdiction in which they're found does not require random number generators.)

Also, lately I've noticed some new slot devices on the casino floor that are loads of fun and labeled penny machines. What could be bad about that play? If the cost per pull is $2-$4 or even more, then don't delude yourself into believing it's just a penny machine. Personally, I think management and game developers are making a mistake when they encourage slot play on devices with a dizzying number of lines, given today's economy. People end up with empty pockets in short order and then complain about having no fun at all or feeling cheated. This is especially true when they have to remain three or four hours for a drawing and are mere observers most of the time. I've listened to them complain loudly in the parking lot on the way to the car when this happens. Next thing you know the casino is empty when a promo is not in progress. Figurative Change (Differences): As I've said in my podcasts, there are a lot of changes coming down the pike, especially for low-rollers. Now you have to be aware of new devices on the casino floor and possibly some hidden fees. We're returning to the days of the 99 cent shrimp cocktail, free used playing cards (you can tell by the holes punched after blackjack and other table game usage) and free spins on "special" machines. They've even come up with a few new things, like resort fees, that would make Bob Stupak (founder of iconic and long-gone Vegas World) proud. You can still find plenty of good deals, but you'll have to understand the changes and not get taken in by a seemingly great deal.

Denomination Deceptions: Expect to see some double speak in denominations played by low-rollers. For example, the candle (light identifying denomination) may denote nickels, but if it's a 10-play device then the per game cost is $2.50. ($.05x 5= $.25x10= $2.50) That's the same amount as a single-line 50¢ machine. Nothing wrong with that as long as you understand you must be bankrolled for 50¢ video poker or you may quickly run out of money.

This deception won't work in high denominations since casinos can't expect a person already betting $300 per hand (three-play max bet on a hundred dollar machine, rather than a five-coin hundred dollar device that would cost $500 per hand) to suddenly be interested in a five-coin 10-play device. Let's see, the 10-play five-coin bet would cost $5,000 per hand, or $4,000,000 coin-in per hour (assuming 800 hands per hour.)

Resort Fees: Vegas World is still alive and well and living on the Strip as well as downtown Vegas. Its spirit may even start traveling around this country and elsewhere. First, here's the low-down on "resort fees." The casino tacks on an additional daily fee to your hotel bill ostensibly for available services you may or may not use. Sometimes this amount is clearly visible while at others it's in very small print. Interestingly, the expense varies from as little as $1 to as much as a whopping $27 per day. Make sure you ask about cost per night including resort fees before booking a room, even if the room is comped.

Promotional Drawings/Prizes: Most casinos are moving away from one grand prize to several lesser awards. I consider this a really good thing because you have a significantly better chance of winning one of say 40 prizes instead of a single huge gift. Make sure you've read all of the rules and maximize the number of tickets you have accordingly.

For example, most promotions use virtual tickets so that you don't have to waste time filling out forms. Often you get extra entries just by swiping your card every time you visit the casino. This practice benefits the low-roller since everybody gets the same number of extra tickets. Sometimes casinos require that you check in at a casino kiosk to be eligible for the drawing, so be sure to ask at the slot club. What if you're new to a casino or just dropping by as you travel through the Midwest? I suggest that you still get a slot club card and check any promotions going on during your visit. Most have flyers describing the promo along with the rules. Slow down and take the time to read all of the information and ask questions. Nowadays I always take my cash and try to use my comps before leaving.

Mailers: You will find an increase in the number of mailers coming to your house, but the value will be less than in the past. This policy benefits low-rollers since giving small perks applies to all customers rather than just the big spenders. Read offers carefully, and then time your visits to coincide with the ones you like best.

New Member Sign Up Bonuses: I never sign up for a player's club card unless there's something in it for me. All casinos are trying to increase their player base so you should shop around and make sure you receive something in return for your business and personal information. My favorite is cash or free play. (By now you must know that t-shirts are anathema to me.)

Discretionary Comps: These are at the discretion of the host on duty and usually based on your recent playing history. Low rollers benefit from the ease of getting a comped room when there are vacancies and the fact that the buffet is the same for all players.

Often high rollers prefer a quick buffet rather than spending a lot of time dining at a steak house.

Many players are unaware of discretionary comps and therefore never ask for them. If you've played for a long time then you should go to the slot club and inquire. You should know that offers are based on coin-in and theo (the casinos theoretical advantage on the game you played) rather than whether you won or lost on a given session. For this reason you should never take it personally if a comp is denied, even though you may have lost a bundle that day.

Final Thoughts: Casinos are learning fast that in a poor economy volume is a necessity to make a profit. They are doing everything they can think of and even coming up with creative innovations to get you through their doors. This means the little guy's business is valued and casinos are willing to spend money on incentives to get your business.

For smart players on a penny-pinching gambling budget you can expect some change. That's jingle in your jeans and new conditions that make for screaming good times.

- Linda Boyd, a long-time table game player before turning to video poker, writes for many gaming publications. Her book, The Video Poker Edge, includes free removable pay schedules and her free strategy cards for the most popular games. Available at amazon.com, bookstores or www.squareonepublishers.com.