Hiding in Plain Sight

            Today, I received an e-mail from a reader regarding casinos that offer 100.17% payback video poker machines.  He wanted to understand why casinos offer these machines, questioned the benefits of the casino of doing so and wondered if perhaps, the casinos essentially hope that Players don't play them.  I'm assuming that the game the reader was talking about was the Full-Pay Double Bonus machines.  This paytable can be found in numerous casinos here in Las Vegas, but I'm not sure if you'll find them anywhere else.  But, today's discussion is less about the specific game and more about video poker machines with paybacks over 100%.

            Why do casinos offer games with over 100%?  Well, quite frankly it makes for good marketing.  All it takes is TWO video poker machines to pay over 100% and the casino can scream on all the advertising that they have MACHINES that pay over 100%.  Some of the more cynical out there might figure that they put the machines in some dark corner, but this really isn't the case either.   The casinos don't want to hide these machines, they want them found and played.

            So, this leads to my readers question.  Aren't the casinos worried about having a game on the floor with a payback over 100%?  Through my years of analyzing table games, I'm frequently asked to look into the possibility of counting or collusion or taking advantage of exposed cards in some way.  More than a decade ago when Shuffle Master created its electronic version of Three Card Poker, I was asked to review the possibility of 5 Players colluding on this machine as all the hands are dealt face up electronically.  My conclusion was that Players COULD collude and reduce the house advantage by about 0.25% - from 2%, down to 1.75%.  The response was 'who cares!?'.  As long as the payback didn't go over 100%, it didn't bother them.

            So, how come now the casino is not concerned about a payback over 100%?  The difference is frequently the amount of money wagered over time.  A Three Card Poker machine with 5 positions, potentially allowing up to $100 wager and playing 30 hands per hour, would allow a total wager of $15,000 per hour as an Ante Wager.  Throw in the Play wager and you've got a total wager of about $25,000 per hour.  At 0.17% Player advantage, this can add up to $42+ per hour or about $1700 for a 40-hour week or $80,000 per year.  If the machine allows a $500 wager, the numbers go significantly higher.  Contrarily, if this were a $1 max machine, I'm not sure if the casinos would care.

            This is the situation with our video poker machine.  Even a $1 machine played at max-coin at a solid pace of 600 hands per hour only gets $3,000 wagered per hour.  At a 0.17% Player edge, this amounts to $8.50 per hour.  This also requires the Player to play the proper strategy.  For the casino to really notice, someone would have to make this their 40-hour per week job.  At the end of the year, the Player should have almost $18,000.  But, this will be greatly dependent on getting his fair share of Royals.  If we're talking about a quarter machine, this number is cut in fourths and we are now looking at a $4500 per year job.  The casinos aren't too worried about someone giving up his day job to take, well, another job making far less!

            So, does this all mean that a game with a payback over 100% is no big deal to the Player?  ABSOLUTELY NOT.  I believe that I make it quite clear in my column that I'm not teaching anyone how to 'beat the casino'.  Almost all gambling opportunities in the casino have house advantages.  This means the Player will lose in the long run.  One of the few exceptions are these 100+% paybacks.  You're not going to get rich on them.  You're not going to quit your day job to become a professional video poker Player.  I consider gambling to be a form of entertainment for 99+% of you.  And in that vain, you'd rather make a little bit of money than lose ANY amount of money.  While the 100% payback is the watermark of paybacks.  Below that and you'll lose in the long run.  Above it and you'll win.  But, the reality is, if you're playing a 100.17% machine, it means that you're NOT playing a 99.6% full-pay jacks or better.  One could argue that you're advantage is not just the 0.17% but the 0.4% you're not LOSING by playing the jacks or better.

            As a Player, you should always seek out the highest payback games.  Playing 98.6% is better than playing 97.5%.  Better yet is playing a 99.6%.  Even better, a double bonus paying 100.17%.  And perhaps the best is a deuces wild paytable paying 101.6%. 

            The last part of this whole equation is also that the casinos KNOW that the vast majority of Players do NOT play the proper strategy.  So, even if they put out a bank of machines with a big sign that says "100.17% Payback Right Here", they know that perhaps 1in 10 will play the game using the right strategy that will earn that 100.17%.  The rest will play the game many percentage points below the theoretical. 

            This is a significant advantage for the Expert Player.  Casinos are willing to put these 100+% payback games out there knowing only a small fraction play it the right way.  This fact allow you (if you're an Expert Player) to play one of (if not the only) game in the casino with a Player advantage.  But, you have to learn the strategy in order to beat the system.