VP Machines Playing Themselves

            This past week, I received an e-mail from a reader who told me about some video poker machines at the Soboba Indian Casino in Banning, California that sort of played themselves.  After being dealt the initial five cards, the machine would mark the cards that should be held (presumably according to some form of 'perfect' strategy).   If you wanted to hold a different set of cards, you had to 'uncheck' the hold buttons on those cards and hold the ones you wanted.  My reader wanted to know if this is the direction that video poker is heading.

            A little over a year ago, I received an e-mail from a company called Incredible Technologies that asked my opinion on a video poker game that they were offering at Red Rock Station.  It allowed the player to 'earn' strategy tips through winning hands.  This is not quite the same as the first situation as this only provides the Player with tips that he still has to listen to as opposed to going out of his way to ignore the strategy.   Is this the direction that video poker is heading?

            I tend to doubt it, and quite frankly a significant part of me certainly hopes not.   Just to be clear, my reasons for hoping this is not the new wave of video poker machines is NOT any fear of being made less relevant to video poker strategy or fear of losing some revenue.   While most of my columns for Gaming Today deal with video poker, most of my income is derived from table games.  In the 10+ years that I've been analyzing games, I think I've left my mark in that arena and don't have to worry about being the video poker guru that my father was.

            No, my reasons for hoping that this is not a new trend is that I think it is bad for Players.  Well, bad for good Players.  I supposed it might be good for bad Players.  The problem with this is that it tends to move video poker machines a few steps closer to slot machines.  There will still be significant differences.  The biggest being that we will still be able to know the payback of a video poker machine by looking at the paytable.  However, if all Players begin to play very close to the theoretical payback because the casinos hand the Player the strategy, then there will be NO way that they will be able to continue to offer 99%+ paybacks.  Casinos can offer games with high paybacks because they know that such a small number of Players utilize these strategies.  They can rely on human error to drive profits while still (truthfully) claiming paybacks near 100%.  It is the best of both worlds for them. 

            That brings me to the reasons why I doubt this is going to be a new hot trend that will overwhelm the video poker market.  Why would the casinos want to mess with what already is such a great situation.  They get to advertise machines with paybacks at near or over 100%.  Yet, they know that the games are almost never played anywhere near this amount.  Just like blackjack with a 99.5% payback but holds 9-15%, video poker machines do about the same.   Given the speed that video poker can be played, the profits that can be gotten from even quarter machines can easily outpace blackjack. 

            Most casinos are well aware that people such as me exist.  We write articles trying to get people to play the proper strategy.  We sell books and software to make Players, well, better Players.  At the same time, casinos know that despite this wealth of knowledge that is out there, most Players either don't bother with it at all or make some half-hearted attempt to use it or use it and then abandon it when they don't break the bank.  I've often surmised that I could hand out free copies of Expert Strategy for Three Card Poker at the entrance of a casino and STILL 75% of the Players who would sit down at a Three Card Poker table would not bother to follow the strategy in the least.   So, on the whole, casinos are not very afraid of Players bearing strategy because they are such a minority.

            However, handing the Player the strategy and then daring them to pick a different one may be far more than casinos are willing to do where strategy is concerned.  It is one thing to question when a Player wants to stand on a soft 16 in blackjack.  It is something all together different when a big flashing light comes on to say STICK when a Player has a 16 vs. a Dealer 2, and then only way the Dealer can hit is if he is willing to turn off the stick sign and go out of his way to hit.  In the case of video poker, if a Player really wants to not use the house strategy, then he is likely to find a different machine altogether.  After all, who wants to have to turn off the machine's decisions before entering his own on every hand?  So, there is a good chance that the actual payback of the video poker machine is going to quickly approach whatever the theoretical payback is.  Since the casinos will never allow games to be offered at 99% in this case, there only choice would be to greatly reduce the payback of video poker, which in turn will scare off all the good Players while at the same time, probably increasing the payback of many of the bad Players, as their errors will no longer be a factor.

            So, the only way I can see casinos adopting this concept is if they have some crazy reason to scare off some of their most loyal Players and want to reduce profits.  Nope, I don't see this as a big trend.  At best, perhaps some casinos will use them as a great marketing ploy, but that is it.

            

Beware the Ides of March

            I have to be honest, I had to look up the historical significance and meaning of the "Ides of March."  I knew it occurred on March 15th, but I had no idea what it meant.  It turns out that Julius Caesar was assassinated on March 15th, more than 2000 years ago.  Not a good day for Rome.  2000 years later, it would be not a good day for Frome either.  It was 15 years ago, on March 15, 1998 that my father, Lenny Frome, passed away.  I say this somewhat tongue in cheek, but it is poosible that Las Vegas has changed more since my parents moved here in 1985 than Rome changed since Julius Caesar began his rule.

            In 1985, there was no Bellagio, no Treasure Island, no Excalibur, no New York New York, no Luxor, no Stratosphere and no Venetian.  The hotels that still stand looked quite different than they do today.  Today they reach right out to the Strip. Then, many were set back hundreds of feet.  I believe Caesars was the first to attempt to build a 'people mover' (a moving walkway) to bring people from the street 'all the way' to their front door.  It didn't take long to realize that the walkway only worked in one direction.  There was no assistance in leaving the building.  The overhead walkways that now exist at Flamingo and Tropicana didn't exist either.  Of course, those streets weren't quite as wide as they are now.  If I recall correctly, there were about 500,000 people living in Las Vegas back then as compared to over 2 MILLION today.

            When I tell my friends who live in Vegas that my parents lived on the East side, they want to know why not the 'newer' West side.  Well, the west side was mostly desert when they moved to Las Vegas.  Where I now live was only built in the early 1990's, several years after they moved here.  Some things have stayed the same.  There's still Harrie's Bagelmania (albeit without Harrie, who passed away a few years ago).  Ethel M is still here, although, I think their building got a bit larger in all these years.  The chocolate is still just as good!  Of course, the Hoover Dam is still here, but now it has an incredible concrete suspension bridge which overshadows it a bit.

            Truth be told, my father had little to do with these changes.  But that doesn't mean he didn't leave an incredible impact on Las Vegas.  What he changed was the INSIDE of the casino.  In 1985, if you walked through a Strip casino, you'd hear the clinking of coins from slot machines.  As you meandered through, you'd see almost exclusively Craps, Blackjack and Roulette tables, with an occasional Big Wheel or maybe Pai Gow Tiles game.  Somedays I wonder how the casinos thrived on such meager offerings. 

            Today, you don't hear the clink of any coins because the slots take in cash and give back paper tickets.  If you pay attention, you'll note that many of those 'slots' aren't even slots, they are video poker machines.  Slots got an upgrade and the Player got a fighting chance.  Instead of 92-93% slot machines that require no thinking or skill, a significant amount of the casino floor has become video poker machines, where strategy rules and paybacks can go up over 100%.  Nothing is hidden from the Player and Player's can make informed choices.

            On the table game side of things, the casinos went from effectively 3 choices to literally dozens.  It is a potpourri of games - Three Card Poker, Four Card Poker, Spanish 21, Blackjack Switch, Caribbean Stud Poker, Let It Ride, Crazy 4 Poker, Ultimate Texas Hold'em, Mississippi Stud Poker, etc....  If you are reading Gaming Today right now while still in a casino, please go down to the casino floor and take not of how many of the table games are NOT blackjack, roulette and craps.  Then think about how much more fun the casino is with all of these new games.   Back in the 90's, my father helped to develop Three Card Poker, Let It Ride, Caribbean Stud and Spanish 21.  These games opened the floodgates for all those that followed.

            His impact to the casino was absolutely immeasurable.  About 15 months ago, I nominated my father to the American Gaming Association's Hall of Fame.  Much to my disappointment, they did not pick him.  Two years ago, they elected Blue Man Group to the Hall of Fame.   I recently saw their show at the Monte Carlo.  It was quite entertaining.  But, has Blue Man Group really changed the make up of Las Vegas or casinos in general the way Lenny Frome has?  If not for my father, it is highly likely that Video Poker would never have become nearly as popular as it is today.  Games like Three Card Poker and Let It Ride might not have succeeded, and all the games that followed may never have been given an opportunity to succeed if not for the impact one 'retired' electrical engineer had on the industry.

            Many of you have written to me over the past decade telling me how much you enjoyed reading my father's column in Gaming Today way back when.  If you're one of those people who recognize the impact Lenny Frome had on the casino, then I'm asking you to send an e-mail to Brian Lehman at the American Gaming Association (blehman@americangaming.org) and let him know that you think it's time to induct my father into the Gaming Hall of Fame!

House Money Strategy

            A few weeks ago, I discussed a new game that was about to be released called House Money.  Just before the article went to print, I found out that due to a technical snafu, the game did NOT go live in the casino I mentioned in that article.  But, in the ensuing weeks, it has gone live in four casinos (Cannery in LV, Drift on Inn and Great American Casino in Washington and Pala Casino in California) for a total of eight tables.

            As a quick refresher, House Money is a sidebet for blackjack.  On the surface it seems very simplistic.  You make the optional sidebet wager before the hand is dealt.  If you are dealt a 2-Card Straight Flush, a Straight or a Pair, you win.  What makes House Money stand out is what happens next.  You can either just take you winnings and play your blackjack game as normal OR you can take all those winnings and add them to your base blackjack wager.  It then becomes a part of your wager just as if you made it before the hand was dealt.  If you double, you must match the entire wager (unless the casino allows doubling for less).  If you split the hand, you must match the entire wager and be prepared for additional splits and/or doubling.

            Some decisions are rather easy.  If you're dealt a suited K-A (or even an off-suit K-A), there is not much to think about.  You take your winnings and cap your base bet.  If the Dealer has blackjack, no big deal, it all pushes and it is as if you took your winnings in the first place.  If the Dealer DOESN'T have blackjack, then you'll win 3 to 2 for the ENTIRE wager!

            Other decisions will be almost as easy.  If you're dealt a Pair of 10's or Face Cards, you'll always cap your base blackjack bet.  The Dealer will check for blackjack first, so you don't have to worry about losing your sidebet winnings that way.   Sometimes, the decision NOT to cap your wager will be rather easy too.  If you're dealt a 6-7 looking into a 10, you'll gladly take your winnings and know that whatever happens in the base game, the hand can't be an overall loser.

            There are two strategy problems that you are going to come across.  The first are the hands in which the strategy is less obvious.  For example, it may be no surprise that we cap the wager with a 9-10 against a 2 through 8.  But, we also do it against a 9 through Ace.  Yes, you're going to lose some of the hands against a 10 with a 19 but the odds are still in your favor.  It may also be difficult for you to cap your base blackjack wager when you have a 4-5 against an 8.  Yes, you are likely to draw a 10, but there will be times you draw a 6 and are stuck with a 15 against that 8.  You'll have to have the courage to risk busting the hand even with a wager that might be 3-10 times larger than your normal wager!

            The second strategy issue is going to be the double down and even more so, the potential split hands.   If you are dealt a 5-6, you must be ready to cap your base wager and then double the entire amount in order to maximize the payback of the sidebet.   So, if you are a $5 player and you put $5 on the sidebet and are dealt a suited 5-6, you'll win $20 on the sidebet and have $25 to add to your base wager.  You're now a $30 blackjack Player and you have to be ready to put down another $30 in these cases.

            In similar fashion, if you are dealt a Pair of 8's, you cap your base wager against a 2 through 7, which is probably no surprise.  With the Pair of 8's, you'll win $15 on the sidebet and have $20 to add to the base wager, making you a $25 Player.  Now, you have to split those 8's and be ready for the possibility of being dealt a 2, 3 or 8 leaving you with $25 double downs or splits.  You can quickly have $100 on the table.

            But, as the guy who did the math for Shuffle Master for this game, I can tell you that if you want to have a shot at earning the 98.3% payback from the sidebet, you're going to have not only cap your bet at the right times, but once you do, you must play blackjack using standard strategy.  One of the incredible features of House Money is that while it has its own strategy, it does not change basic Blackjack Strategy one bit!

            If you are interested in learning the complete strategy for House Money, I have created a simple 8 1/2" x 11" tipsheet that shows you when to cap your wager and when to take the money.  It is valid for all shoe sizes.  Eventually, I hope to shrink it down to a pocket-sized strategy card that you can bring with you to the casino, but for now, this will have to do.  If you are interested in ordering it, please send a check or money order to Gambatria, P.O. Box 36474, Las Vegas, NV 89134.

Playing with House Money

            Over the years, there have been numerous successful sidebets to blackjack.  Many people have wondered why blackjack Players would bother with a sidebet.  A good blackjack Player can play the game at 99.5%, so why would they want to play a sidebet that might pay anywhere from 75%-90%.  That would seem to defeat the purpose of playing a game with such a narrow house edge. 

            I think the success of blackjack sidebets lie in the volatility of them.  Blackjack is essentially a game of coin tosses.  You win one, you lose one.  You win two, you lose three, you win two more.   It is hard to make a real killing (or get killed) on anyone hand unless you have one of those cases where you split 8's, draw another 8 and then a bunch of 2's and 3's for Double Down situation.   The average wager at a blackjack table is a mere 1.15 (roughly) units.

            The sidebet on the other hand will frequently afford the Player the opportunity to win big on a single hand.  The more frequent payoffs might pay 4 to 1 or even 10 to 1.  The more rare winning hands might pay 100 to 1 or 1000 to 1.  A $5 wager can quickly (so to speak) become $500 or $5000.    The tradeoff for this opportunity is generally the lower paybacks associated with no strategy sidebets.  The casinos can't offer 97-98% paybacks for games with no strategy because they can't rely on human error to help drive the casino edge.

            A couple of months ago, Roger Snow, Chief Product Officer at Shuffle Master brought a game idea to me to analyze.  As is frequently the case when we work together, the game went through multiple iterations before we arrived at the final product.  After we 'ran the numbers', I think Roger liked it but didn't love it.  I, on the other hand, told him I thought we had just come up with a nearly perfect sidebet for blackjack.  It was given the name House Money for reasons which will soon become clear.

            As far as I know, it is the first and only blackjack sidebet that has strategy, yet somehow does not affect base blackjack strategy at all.  As a result, if a Player chooses not to play the sidebet, he gives up nothing to the house by sitting at a table that offers it. Also, the casinos are able to offer a sidebet with a payback in the 95+% range because there is the possibility of human error in the strategy.  With all this, the concept of the sidebet is quite simple.

The Player makes a wager before being dealt his blackjack hand.  The Dealer deals the cards as per normal blackjack rules.  If the Player is dealt a Pair, a Straight or a Straight Flush, he wins.  As always, there may be multiple paytables over time, but for now, this is the most common one for a 2, 6 or 8-deck game:

Hand	Pays (TO 1)*
Suited A-K	9
2-Card Straight Flush	4
Pair	3
2-Card Straight	1

            Those payouts may not look all that spectacular.  In all honesty, they are not.  If the game ended right here, the payback would only be about 75% and this would just be another 'nothing special' blackjack sidebet.  But, the game does not end here.  The Player now has two options:

·         Take his winnings and play out his blackjack end per usual

·         Add any/all of his winnings to his base blackjack wager and then play out his hand per usual

            There are NO restrictions on these rules.  If the Player is dealt a Suited A-K, he will be paid 9 to 1 for his sidebet and then can add the entire 10 units to his base Blackjack wager which has ZERO chance of losing.  And YES, the casino will pay 3 to 2 for this additional wagered amount if the Dealer does not also have a Blackjack.

            If the Player is dealt a Pair of Jacks, he will be paid 3 to 1 for the sidebet.  If the Dealer has a 6 up, he can add all 4 units to the blackjack wager.  If the Dealer has a 10 up, he can choose to do so too, but here's where the strategy part comes in.  Is this the right move?  In reality, it is the correct move.  I should add that if the Dealer has Blackjack, the Player NEVER risks his winnings from the sidebet.

            The real fun begins when the Player is dealt a 5-6 (or 5-6 suited) and wins even money (or 4 to 1) and has to decide whether to risk his winnings on his base blackjack wager.  If the Player chooses to do so, it becomes a part of his wager in every sense of the word.  If he decides to double down, he MUST match the ENTIRE wager.  The same applies if he is dealt a Pair and chooses to split.

            Imagine starting with a $5 wager on both the base wager and the sidebet and being dealt a Pair of 8's.  The Dealer pays you 3 to 1 on your sidebet and you now have to decide if you want to add the $20 to your base blackjack wager, making it a total of $25.  Assuming you do and you go ahead and follow standard strategy, you will now split those 8's and you'll have to put up an additional $25 of your own.  Now, you are dealt another 8 and you put up another $25.  Then you're dealt a '3' and you double down and play ANOTHER $25.  You started as a $5 Player and now you have $100 down on the table on essentially one hand!

            For the record, you would only let your sidebet winnings ride if the Dealer has a 2 through 7 as an upcard.  However, whether you cap your bet or take your winnings, you still follow basic blackjack strategy and split those 8's.  You double down on all 11's.

            So far, House Money has been very well received by the casinos that it has been demonstrated in.  It is expected to go live in the next couple of weeks in Reno at the Grand Siena Reno.  It should go live in other casinos shortly thereafter as regulatory approvals are granted.  In a few weeks, after the game has gone live, I'll review the complete strategy for the game.

           

Is the Search for Perfection Overrated?

            

            One of the traits I inherited from my father, Lenny Frome, is that I am a perfectionist.  This is not to say that I am perfect (far from it).  The joke in our family was always that one of my sister's brought home a '99' on a test and my father, not missing a beat said "why not a 100?"  Fortunately, for me, by the time I came along, he learned to temper his ways a bit.  I try to focus most of my perfectionism inward.  Nobody takes it harder when I find a mistake in my work more than I do.

            At the same time, I try very hard to be practical about things too, where strategy is concerned.  Us mere mortals do have limitations to our ability to memorize dozens of video poker game strategies.  It is why I strongly recommend that you learn one or two different games and do your very best to 'perfect' the strategies to those games.  But, what are you to do if the games whose strategy you memorized are not available when you go to the casino or if you're just in the mood to try something different?

            In these cases, you just have to use some common sense.  If you try to bring your Jacks or Better strategy over to Joker Poker, you may find yourself in deep trouble.  But, what happens if you use your basic full-pay Jacks or Better strategy on a full-pay Bonus Poker machine?  What will this really cost you in theory?  Calculating this - with the help of some of my video poker analysis programs - is relatively easy.

            We simply run the numbers on a full-pay jacks or better machine using Expert Strategy for jacks or better.  From this program, we extract the frequencies of all of our winning hands.  We then use these frequencies against the Bonus Poker paytable to get a theoretical payback of Bonus Poker using jacks or better strategy.  We then run the numbers on Bonus Poker using Expert Strategy for Bonus Poker and compare the results.

            The theoretical payback for Bonus Poker using Expert Strategy for Bonus Poker is 99.16%.  The theoretical payback for Bonus Poker using Expert Strategy for jacks or better is 99.15%.  If you were to play all 2,598,960 possible 5-card deals using jacks or better strategy you would find that you cost yourself about 200 coins.

            In other words, while it is still preferable to learn the right strategy for Bonus Poker, if you use your jacks or better strategy, your bankroll will not take a big hit.  However, this should not give you free license to play jacks or better strategy on any game you want.  If you were take your jacks or better strategy to a DOUBLE Bonus Poker game, you would find that it will play at about 99.6%.  This might sound good (after all jacks or better itself plays at a bit less than this), but you have to remember that Double Bonus Poker is one of the few positive games out there.  If you play it using the proper strategy, it can afford you a 100.1% payback.

            So, what's the point?  Good question.  Nobody should expect perfection when they head to the casino.  The simple mathematical fact is that every deviation from perfection, however, will cost you.  It might be peanuts as in the case of playing Bonus Poker using jacks or better strategy.  If you play a hundred hours a year as a $1 max-coin Player, you'll cost yourself $30 per year.  We'd all rather have that $30, but we're not talking a significant amount of money.  Do the same on our Double Bonus scenario and we're talking about $1500 per year, which I dare say is QUITE significant.

            So, while we shouldn't shy away from video poker because we might make a few mistakes, we should still be prepared to learn the right strategy for each game and to do our very best to utilize it every time we play.  This is the very essence of Expert Strategy - Know which games to play, know what strategy to use and know what to expect.

            For those of you who want to learn the subtle differences between jacks or better strategy and Bonus Poker strategy, both strategies can be found in Expert Video Poker for Las Vegas and Winning Strategies for VideoPoker.

Deja Vu All Over Again!

            How many times does a person move from northern New Jersey to Las Vegas in a lifetime?

            It was the summer of 1985 and the plans had been in the works for months.  My parents called me in my dorm one night to tell me that they’ve decided they were retiring to Las Vegas that summer.  At the time, they thought that I might transfer to UNLV or one of the UC schools.  But, having made many friends and in the middle of pursuing my degree, transferring just didn’t seem prudent.  I decided that I would stay at SUNY@Albany. 

            When I got home for summer break, I found much of our house already packed up.  Because they were moving across country, I convinced my parents to allow me to live off campus for my final two years, figuring I would need a place to stay at times when the dorms were closed.  In June, we took a trip up to Albany to set up my new room with much of my furniture from my room at home.  In early August, we began the 10-day drive across country.  We went thru Wilkes-Barre, Toledo, Chicago, St. Louis, Tulsa, Amarillo, Albuquerque, Flagstaff and Kingman before arriving in Las Vegas. 

            Once we arrived, I spent an additional two to three weeks in Las Vegas before flying back to New York to get ready for school.  For the next two years, Las Vegas was essentially my home.  For the following ten years or so, I would visit 2-3 times a year.  My parents had an incredible ‘retirement’ in Las Vegas.  Well, maybe retirement isn’t the right word.  My father would go on to become the ‘godfather’ of video poker and change the casino floor forever with his work on games like Three Card Poker, Let It Ride, Caribbean Stud and Spanish 21.

            It is now the summer of 2011, 26 years later.  To quote Yogi Berra – it’s déjà vu all over again.  My wife and I have spent the last 6 months staging our house and packing up our stuff in anticipation of our move to Las Vegas.  We promised that once my eldest son was in college that we would head out of the New York area.  After researching countless cities, we decided that Las Vegas had the most to offer us.  Most of our friends think we’re going because of my profession.  There are benefits there as well.  The ability to see games in person will certainly help me write about games and develop new games.  But, the primary reasons dealt with the quality of life that Las Vegas affords us.

            As I write this column, we are 2-3 days away from the ‘hurricane of the century’ hitting us almost directly.  Of course, it is expected to come in as a Category 1 hurricane, so what we will endure will be seem like a light rain compared to what those in New Orleans dealt with a few years ago.  I’m likely to see more rain this weekend than I will the next 2-3 years in the Las Vegas valley.  If this wasn’t bad enough, we actually had an earthquake here too this past week.  I personally didn’t feel a thing, but about an hour before it hit, we were at the top of the Empire State Building, where I am told it WAS felt.  I can’t really say that I won’t deal with the same in Las Vegas.  I was there in 1992 when a significant earthquake hit between Los Angeles and Las Vegas and felt my parent’s apartment get shaken up quite a bit.

            Several months ago, I announced that I was changing the name of Compu-Flyers to Gambatria.  I knew then, that that was the beginning of a good deal of change in our lives.  In about 2-3 weeks when we arrive in Las Vegas, the end phase of that change will begin.  Compu-Flyers, now known as Gambatria will return to Las Vegas after a 13-year hiatus.  From a base of operations in Las Vegas, I hope to be able to  write about more up and coming games and to write in more detail about what I see going on in the casinos.

            I hope that Las Vegas will be as good to my family as it was to my parents.  I hope that I can be as good for Las Vegas as my father was. 

Taking the Mystery Out of the Machine!

            I get a daily e-newsletter from the American Gaming Association.  This past week, while leafing through it, a column about debunking the myths of the slot machine caught my attention.  I clicked on the full story and wound up at this PDF:

http://www.americangaming.org/files/aga/uploads/docs/taking_the_mystery_out_of_the_machine_brochure_final.pdf

            My father and I have desperately tried to get people to break the slot habit for more than 2 decades, so I was quite interested to see what myths they were referring to.  Obviously, you don’t put together a flyer like this unless you are hoping to attract people to playing slots.

           

            Ironically, while I doubt it was what was intended, I could not have put together a better flyer myself.  I agree with virtually everything on it, and I think it does a wonderful job of telling people why you should NEVER PLAY SLOTS!

Here are some points on the flyer:

Players can determine a machine’s odds by counting the symbols on each reel.

False.  Because multiple numbers generated by the RNG can correspond to the same symbol on

a reel, there are many more number combinations possible than are visible to the eye. Even though there may be only 15 symbols on a reel, there can be thousands of virtual stops.

            I couldn’t possibly add to the above statement.  What you see is NOT what you get with slots.  With Video Poker, what you see is EXACTLY what you get.

88-98: The overall percentage that a machine will return to players in the long run. For every $100 wagered, players might lose approximately $2 to $12 over time.

            88%???  That’s about 7 points below what ANY video poker pays.  But, that’s not really the main point.  The real point here is that if you had every slot machine in the world available to you, you would have NO WAY of knowing which is 88% and which is 98%.  Put a video poker machine in front of me, show me the paytable and I’ll tell you the payback with absolute certainty.

            And here is the scariest fact on the flyer:

59: The percentage of Americans who consider slot machines their favorite casino game

            Really? 59%???  No wonder they keep putting up billion dollar casinos!  Please folks, it is time to break the slot habit and keep more of your own money.  Play video poker.  Play table games.  Don’t play slots!

            

The Payback Mirage

             The battle between the short-term and the long-term, where gambling is concerned, is an epic struggle and so totally misunderstood by most.  Why is this a problem?  Because it is critical to understand what to expect when you’re playing.  If you don’t, you may begin to believe that something is wrong about what you are doing and this can lead you to deviate from proper play.  When you do that, you may help yourself in the short-term, but this will eventually give way to damage done in the long run.

            To try and prove this point, I ran some video poker simulations.  I played 100,000 3-hour sessions of video poker.  I assumed each session consisted of 2100 hands of video poker (700 hands per hours).  I started with a full-pay jacks or better game.  What did I find?

            Well, in total, 210 million hands of video poker were played.  At the end of all these hands, the payback was essentially exactly where we would expect it to be – 99.52%.  If the simulation used max-coin quarters, the result would be a loss of about 1.26 million dollars.  Of course, based on 210 million hands, it would also take 34 years of 24 hour/day play to get to this point.  Quite frankly, this is MORE than a lifetime of play.

            When we look at some short term results, we find that the Player will lose about 68.5% of the session and win 31.5% of the time.  So, even when playing a full-pay jacks or better machines, the Player can expect to lose 2 out of 3 times when playing for 3 hours.  Even though the edge is less than 0.5% for the house, the Player will walk away a loser far more often than a winner.

            So, is it any wonder that I advocate playing games with a 100% payback or better.  To prove this point, I created a fictitious machine whereby the payouts are the same as full-pay, EXCEPT the Four of a Kind pays 30 instead of only 25.  The simulation showed that after 210 million hands, the overall payback was 100.70%, which is what we would expect.  So, this game is a bit more positive than full-pay is negative.  Thus, the results of our sessions should probably be flip-flopped from our full-pay version, right?

            Not exactly.   We find that even with the payback of 100.7%, the Player will STILL lose 58% of his sessions!  That’s right.  The Player will still lose nearly 6 out of 10 sessions while playing a game that is significantly in his favor.   Despite this 1.2% turnaround (from 0.5% negative to 0.7% positive), the Player will wind up winning only an additional 1 session out of 10 and still lose a significant majority of his sessions.  How can this be?

            These results occur because when playing video poker, our wins will, on average be larger than our losses.  Of course, even this is a bit deceiving.  What really happens is that every so often we have a HUGE victory, while our losses tend to be more moderate.   In sessions where we hit a Royal Flush, our winnings will be far larger than virtually ANY loss we would ever have.  As a result, we lose more sessions than we win, but those big winning nights tip the scale back in our favor.  When we play a 99.5% game, it only is enough to bring it back closer to even.  If we play a game with a payback of OVER 100%, those big wins are enough to turn the game positive in the long run, even if in the short run we are losing more than winning – in terms of sessions, not dollars.

            As I said earlier, it is critical to understand how this all works.  Otherwise, it is way too easy to simply give up on playing the right strategy if you feel you are losing too often.  While we all play in ‘sessions’, in the end, all that matters is how we are doing over the long run.  In the second example (the 100.7% game), would you really be upset to lose 58% of your session, but  wind up winning 1.85 million dollars over a lifetime?

            One last point for those of you who would try to use the information here as ‘proof’ that the long run is really too long.  I ran each machine for a mere 1000 sessions or 3000 hours of play.  This could be 3-5 years of play for a local in Las Vegas.  While there is a bit more deviation from the long term expectations, on the whole the numbers still prove my point.  The overall paybacks for the games were 99.26% and 100.49% respectively.  The win frequencies for a session were 70.8% and 58.7%, respectively.  So, even over a much shorter period than multiple lifetimes, we will begin to see a pattern develop whereby the Player loses more sessions than he wins, but can still end up a winner in the long run.

Lenny Frome Left a Legacy to Casino Gambling World

(the following is a re-print of my column in this week's edition of Gaming Today)  

            There are days in our lives that we all have burned into our memories – weddings, births of our children and regrettably, the passing of someone dear.  As this article goes to print in Gaming Today, I will be remembering one of those days – the 13^th anniversary of my father’s passing.  I will never forget my brother telling me that my dad had had a heart attack.  When I asked him how he was doing, he responded “he isn’t.”

            I could fill up this entire edition of stories about my dad as a dad.  I’m not sure exactly how long he wrote for Gaming Today, but I believe it was 8 or 9 years, which means we could fill this edition with the hundreds of articles he wrote.  But, why think small?  If one wants to see the legacy my father left to the casino world, one only needs to walk into virtually any casino in the world.

            A good gaming analyst doesn’t just crunch the numbers.  He works with the inventors to create the game.  You need the creative side to envision the cards and the betting, but the math is the glue that holds it all together.  So, the analyst may not have his name on the patent and he may not get technical credit for inventing the game, but there is no doubt that a good analyst helps to invent each game he works on.  So, try to walk into a casino and not see Lenny Frome’s handiwork. 

            You see some Let It Ride tables?  He worked with the founders of Shuffle Master to save that one from a horrible fate (a math error).  How about some Caribbean Stud tables?  Yep, his name is on the math for that one too.  Three Card Poker?  Yes, he worked with Derek Webb to refine the math and rules of the game.  He worked on Boston 5 from New Vision Gaming.  He worked on Spanish 21 with Masque Publishing.  He worked on dozens of other games that hit the casino floor but didn’t quite make it to success.  But even these failures opened up the doors to dozens more.  Imagine walking into a casino and having none of these games be there?  It would be like Las Vegas circa 1980!

            Of course, on the other half of the floor, we’d all be stuck with nothing but slot machines!  Oh, the horror!  Where would the casino of 2011 be without Lenny Frome’s contributions to video poker?  I don’t know who first called him the ‘godfather of video poker’ but it’s a nickname that has stuck through the years.  You can even find this on his Wikipedia page (http://en.wikipedia.org/wiki/Lenny_Frome) – which, by the way, I DID NOT create!

            Despite the accolades, when it came time for my father to choose an e-mail address – he didn’t choose “vpgodfather”, “vpguru” or “vpexpert”.  He chose “Playerspal”.  He tried very hard to create games that while they obviously had house advantages, at least gave the Player a fighting chance.  What he loved about table games and video poker was that everything was known and could be calculated using finite math.  He hated the slots because everything about them was a deep dark secret.  He called himself Playerspal because that’s how he saw himself.  He was there to educate the Players about how to play the games.

            Well, so far this has been about my father as a gaming analyst.  As I said earlier, I could fill up this entire edition of Gaming Today with stories about my dad as a dad.  Of course, there would be some similarities.  Education was very important to my father.  It didn’t really matter what the topic was.  Shortly after arriving in Las Vegas, he wound up teaching at UNLV.  Here was a guy who could ace my AP Physics tests at the dinner table without a calculator and he was teaching a relatively low level algebra course in college.  Still, he had the patience to teach the kids to the best of his ability and he took it far more seriously than many full-time professors I had in college.  It meant so much to him.  This is one of the reasons why my family started the Leonard Frome Memorial Scholarship at UNLV after he died. 

            Another thing very important to my father was his family.  He adored his children and grandchildren.  So, in an attempt to put together two very important things in my father’s life – children and education, I’m asking my readers to help me with a little project.  I found out via twitter (@gambatria) that my friends at Shuffle Master are having a book drive to help a Las Vegas based organization called “Spread the Word Nevada” which promotes literacy by distributing books to elementary schools throughout Nevada.   My wife and I will be shipping to them a few dozen gently-used books  from my kids’ home library.  I’m asking my readers to check out their website and if you are so inclined to assist them in any way you can – whether via a monetary donation, donating books or volunteering. 

            I’ll get back to gaming tips next week.