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. 

Don't Try These in the Casino!

            We are all familiar with the phrase that “nothing is certain but death and taxes.”  This quote is quite important to the world of gambling.  As I discussed in last week’s column, even when the Player has an advantage over the casino in a particular game, it does NOT mean that he will always walk away a winner.  In similar fashion, not every bad gambling idea leads to an immediate loss.  Even if you choose to hit a 20 while playing blackjack, every so often you WILL hit an Ace and it will help you win when you would otherwise lose (well technically it can only help you push when you would have lost or win when you would have pushed).  But, the bottom line is, even if it works out once in a while – it still doesn’t make it a good idea.

            This week, I’m going to look at a few “common” bad ideas that you will see when you walk into a casino.

1.  Splitting 10’s into a bust card

            The Dealer has a 4, 5 or 6 up and you’ve got a pair of 10’s.  The dealer is going to bust anyhow, so why not split up your 10’s and draw two more 10’s and crush the house.  Well, first of all, if you split the first two 10’s and you draw two more, you’d split again!  If it’s a good idea the first time, it must be a good idea the 2^nd time too! 

            What makes this one so dangerous is that in the end, it IS a winning proposition.  The problem is, relative to just holding the 20, it is a TERRIBLE decision.  If you were dealt 100,000 Pair of 10’s (against a 6) and were to just stick as you are supposed to, you would win 67,600 units.  This means you win the hand almost 84% of the time.  If you decide to get split happy and just keep splitting 10’s, you’ll win a total of about 30,700 units or less than half as much – all while risking more than 3 times as much money.  So, it might feel the good the once in a while when the Dealer busts and you win 3 or 4 hands at once.  But when the Dealer winds up with a 17, 18 or 19 and you realize you just below a good hand for 2 or 3 or 4 lousy ones, the euphoria will quickly disappear.  No matter how you slice it, your bankroll will suffer in the long run.

2.  Playing a Jack High hand in Three Card Poker

            Several years ago, I was sitting out a Three Card Poker table when a woman told another Player that generally she plays only a Queen High, but once in a while you can beat the Dealer with a Jack High hand.  Actually, NO, you can’t.  If you have a Jack high hand, the only way you ‘win’ is if the Dealer does not Qualify.   In this case, your Play wager will push and your Ante wager will win.  This will happen 5,277 of the 18,424 possible Dealer hands.  You will be wagering 2 units in the hopes of winning one and it will occur far less than 30% of the time.

            With 18,424 possible Dealer hands, if you fold, you will lose 18,424 units.  If you Play, you will risk 36,848 units and win back only 15,831 for a net loss of just over 21,000 units.  It may be painful to Fold and if you do Fold, you will NEVER get paid any ‘winners’ for a Jack High hand, but your bankroll WILL thank you because it will last that much longer.

3.   Betting 4x only on Pairs when Playing Ultimate Texas Hold’em (UTH)

            Proper strategy for UTH calls for betting 4x on a significant number of hands.  The strategy DOES include Pairs of 3’s or better, but also includes any hand with an Ace and a variety of Suited and Unsuited Hands with a Jack or better (full full list, go to my website www.gambatria.com).  I’ve heard of Players playing properly while Dealers tell them they are playing too aggressively.   The payback of UTH is 99.25% when you use Expert Strategy.  If you choose to bet 4x ONLY when you are dealt a Pair of 3’s or better, the payback goes down about 3% to 96.25%.  Put another way, the house advantage increases 400%!

            One could say that casino games are developed with these types of ‘traps’.  But the reality is that they are only traps if you fall into them.  The proper strategy is readily found for virtually every casino game.  You can either choose to learn them or follow your own bad idea. 

            Check out my website at www.gambatria.com for tips on how to play many table games.

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.

Royal Alterations

            Last week’s column discussed how by altering your strategy, you can make Royals appear more often.  Let’s face it, by altering your strategy, you can make any hand you want to appear more often.  Just because Royal Flushes are the highest paying hand does NOT mean that by getting more of them you will automatically win.  If your goal is the bragging rights as the King or Queen of Royal Flushes, it might be worth it to you.  In reality, however, you’ll also be ‘flushing’ your bankroll by doing this.

            That isn’t to say that there isn’t a right time to alter your strategy in order to make a Royal appear sooner.  The obvious case of this is when you are playing a Progressive, where the meter is considerably above the normal 800 for 1 payout.  The intriguing part about playing Progressives is that the strategy keeps changing as the meter increases.  Even under normal circumstances it would be unusual for the meter to get to double the normal payout, but nowadays with some professionals monitoring progressive payouts, the likelihood is even less.  As soon as the meter gets to the point where the game is positive, a team of Players can hit a bank of machines and just keep playing until the jackpot is hit. 

            The Expert Player realizes that as the jackpot goes up, the strategy changes and the frequency of a Royal Flush can increase, which can push the payback up even more.  Using Expert Strategy for a full-pay jacks or better machine will result in a Royal (on average) every 40,400 hands.   If the Royal is paying 1600 for 1, we alter our strategy to make a Royal appear (on average) every 32,700 hands.  This increase in frequency allows us to extract an additional 0.9% of payback out of the Royal Flush hand.  Of course, this change in strategy costs us about 0.7% of payback on all the other hands.  The net increase is 0.2%, however.  So, you can play the Progressive using the altered strategy at 99.5% or you can use standard (8-5) strategy and play it at 99.3%.  It doesn’t seem like much of a choice to me.

            So, what are some of the changes we use when playing a Progressive paying 1600 for 1 on a Royal?  One of the biggest is that the 3-Card Royal now outranks a High Pair.  Yep, this one is going to hurt.  You going to throw away a sure winner (High Pair) and go for the Royal Flush.  Your odds of hitting that Royal is a bit more than 1000 to 1.  But, it’s paying 1600 for 1!  Throw in the fact that you still have many chances to hit a Straight Flush, a Flush, a Straight, Trips, Two Pair and a High Pair and quite frankly, the math isn’t even close.  The 3-Card Royal has an expected value of more than 2, while the High Pair is down at 1.5.

            Another significant change in our strategy is that the A-10 Royal is now playable.  Normally, when playing jacks or better, we do NOT hold a 2-Card Royal consisting of A-10.  We only have 1 way to fill it for Straights and/or the Royal Flush (with the JQK), which greatly reduces its expected value.  However, with the Royal Flush’s payout pumped up to 1600, we’re still better off holding the 2-Card Royal vs. holding just the Ace.  Keep in mind, however, that this hand is just barely playable.  This means that many other combinations of cards might be held instead (such as a 3-Card Straight Flush), so don’t forget to look at your WHOLE hand before getting overly excited about a suited A-10.

            Besides learning some of the changes to the strategy for a Progressive, another key point is learned.  Every change to the paytable can impact the strategy.  Now, if you sit down and play a full-pay bonus poker game using jacks or better strategy, I’m not saying you’ll get wiped out in 10 minutes.  But, what is the point of learning strategy if you’re just going to wing it when you change which type of game you’re playing.  0.1% or 0.2% might not seem like a lot to give up – but in reality, this may increase your loss rate by 20-50%!

            One of the best ways to learn how to play all the different games out there is to learn the strategy tables from a book like Winning Strategies for Video Poker and then practice what you’ve learned on your PC using Masque’s Video Poker Strategy Pro.  For a limited time, we’re offering a package of both the book and the software for only $14.95.  For an additional $5 ($19.95 in total) we’ll also include Video Poker: America’s National Game of Chance which is 200 pages of Lenny Frome’s best articles, quizzes and stories.  If you’d like to order, please send a check or money order to Compu-Flyers, P.O. Box 132, Bogota, NJ 07603. 

Royal Appearance

            Last week’s column was prompted by a reader who raised some concerns that Players who use their frequent player cards are somehow cheated by casinos.  The ‘proof’ of this is that some locals (i.e. frequent Players) don’t seem to get as many Royals as the tourists.  Previously, I had cited at least two reason for this. 

            The first is selective memory.  We tend to remember things we want to remember.  When we go through an extended cold streak, every other scream of “Royal” is burned into our brains.  I’m guessing that in the week you hit your last Royal, someone else did too that week, but it didn’t bother you one bit.  If you’ve gone a year without one, everytime someone gets one, it hits you like a ton of bricks.

            Secondly, even if you’re trying to be relatively objective about it, you also have to remember that ‘you’ are greatly outnumbered by ‘them’.  Even if there are a couple of you playing together, there are dozens if not hundreds of other people playing around you.  It is no surprise that they WILL actually get more Royals than your group will.

            There is, of course, another possibility – other people ARE actually get more Royals than you are!  So, am I buying into the whole ‘rigged’ video poker machine theory?  ABSOLUTELY NOT! 

            But, the number of Royals you get over an extended period of time is greatly influenced by the strategy you use.  So, there are two possibilities.  YOU may be using the wrong strategy which is reducing the probability of a Royal OR the other guy is using the wrong strategy which might INCREASE the probability of a Royal.

            Let’s look at these two scenarios.  The proper strategy for any particular video poker machine is one that maximizes the overall payback, not one that maximizes the probability of hitting a Royal.  What do you do when you’re dealt the following?

A♥       Q♥       10♥      5♥        5♠

            Do you hold the Low-Pair?  The 4-Card Flush?  The 3-Card Royal?

            The correct answer is the 3-Card Royal.  If you’re playing one of the other two, not only are you hurting yourself from a payback perspective, you’re lowering your chances of hitting a Royal.  By the way, the decision is not even close.  The expected value (EV) of the 3-Card Royal is 1.41.  The 4-Card Flush has an EV of 1.22 and the Low Pair a meager 0.82.

            So, if you’re not playing this hand correctly, don’t be surprised if some others around you are hitting more Royals.  Of course, they may have their own issues.  What do you do when you’re dealt the following?

A♥       Q♥       10♥      5♥        Q♠

            The correct answer is hold the High Pair with an expected value of 1.54.  Now, you may be doing this, but that ‘tourist’ behind you may not.  What is the impact of holding the 3-Card Royal.  Well, he’ll lower his overall expected payback, BUT he will increase his probability of hitting a Royal.

            The examples I used here are not the most common occurrences, so these will not make a big difference to the frequency of a Royal happening.  Far more common are the hands that include a 2-Card Royal that also include 3-Card and 4-Card Flushes and Straights.  I have little doubt that there are many novice Players who get Royal fever and just play every 2-Card Royal instead of 4-Card Straights and Flushes or 3-Card Straight Flushes.  Doing so, will make them hit more Royals than you will, but they won’t be any richer for it. 

            Under normal circumstances, for a jacks or better machine, a Royal should appear about once every 40,000 hands or so.  By altering one’s strategy it is very easy to reduce this to once every 30,000 hands or so, which is considerably more frequent.  But, it will come at a cost of lowering the payback by a significant amount too.  So, the next time you’re upset that someone else got a Royal, start worrying about how you’re playing and not what’s happening around the corner.  They may pay dearly for their Royal appearance.