Offering Advantage Video Poker Advantageously
(Originally Published in Global Gaming Business)
By Bob Dancer
President & Gaming Analyst
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One model for a casino is that the good players win from the not-so-good players, and the house takes a commission off of each bet. Keeping this model in mind helps us manage advantage video poker.
Video poker is a game of skill. Computer programs abound that tell players how much each game is worth and how to play any particular hand. Casinos frequently offer cash back to video poker players. Casinos frequently offer various promotions: double points on Tuesday, an extra 100 coins for the correct 4-of-a-kind, etc.
Advantage video poker is what happens when the benefit package offered by the casino, including the game itself, cash back, and promotions, yields over 100% to the long-run expert player. If the casino offers 9/6 Jacks or Better (returning 99.54% with proper play) with a 0.33% cash slot club, it’s not advantage video poker. Offering double points (effectively offering 0.67% cash back) IS advantage video poker because the game now returns 100.21% to our mythical perfect player.
At first blush, it doesn’t make sense for a casino to EVER offer a game where the player has the edge. After all, if the players win, the casino loses, and casinos aren’t in business to lose. This view is understandable but is neglecting several factors.
Playing video poker close to perfectly is extremely difficult. In most jurisdictions, likely fewer than 2% of your players perform at this level. Two percent is more than zero, of course, but it’s a whole lot less than “everybody”. Offering a game where 2% of the players have the advantage and 98% don’t has the possibility of being acceptably profitable. You need to keep in mind HOW MUCH advantage these players can obtain. My autobiography, Million Dollar Video Poker, clearly explains how top players calculate their advantage. In order to protect against these players, casino managers should understand the way players add up the various factors determine where to play.
Identifying which are the good games is a relatively easy skill to master. Looking for nine and six on a Jacks or Better pay schedule isn’t tough, and there are a number of publications that offer information on the key indicators for Bonus Poker, Double Bonus Poker, Double Double Bonus Poker, Super Aces Bonus, and a slew of other games.
The information listing the best games in most casinos in the country is readily available. On the Internet, the VPFREE website, with the unlikely address of http://www.west-point.org/users/usma1955/20228/VP/index.htm, offers a mostly accurate list of “full pay” games at casinos across the country. (The definition of “full pay” is elusive. Suffice it say for here that these are all games returning over 99% when played perfectly --- and many over 100%). This information is available for free to anyone with access to a computer.
A large number of players consult this database and other sources of information to decide where to play. Video poker bulletin boards abound, and every one of them frequently gets emails that say something like, “My wife and I are going to Tunica / Atlantic City / Vegas / Detroit / wherever in two weeks. We are quarter players. Where will we find the best games?” And several players that have information about this particular jurisdiction are very willing to share it to whoever asks.
Most players who use this information to figure out where to play aren’t winning players. These players know what games to look for, but that’s not at all the same as knowing how to play every hand. In many respects, having some advantage games is very profitable “loss leader” advertising.
Players believing that they have a chance at your casino brings in business. Profitable business. Players believing that you have no good games at all will definitely affect your coin-in. And even the players who are strong enough to have a small edge at video poker often bring non-winning habits with them. Perhaps alcohol does them in. Perhaps their spouse plays $5 slots for hours at a time. Perhaps they know 9/6 Jacks perfectly but the game bores them so they spend time on your Double Double Bonus machines where you have a big edge. They are AT your casino because you offer good games. But they LOSE because there are significant hurdles in every casino on the path to winning video poker.
Let’s assume for now that you accept the hypothesis that you should have at least some relatively loose games. Now the questions are: which games and how loose?
Before explicitly trying to answer these questions you need to address such things as: Who are your actual and your desired customers? Who is your competition? What games do your competitors offer? How does your slot club and typical promotions compare with what your competition offers? Are your amenities above-average or below-average for this market. (Usually it is the casinos with lesser amenities that compete in terms of the looseness of games.) And, how close to being filled to capacity are you on Saturday nights?
As a general rule, casinos with little or no nearby competition can be tighter than casinos in casino centers. Cruise ships, for example, typically offer much tighter games than do the casinos in, for example, Biloxi. But no casino is totally devoid of competition, as every casino depends on repeat business and if a casino is MUCH tighter than those in Vegas, for example, many of your potential local customers will make far fewer trips to your local casino and more trips to Nevada.
It is a losing proposition to try to be looser than your competition in every game. Often the competition in this type of situation will loosen its games in self defense. Both casinos end up with a similar market share to where they started, but with lower profit margins. If you are going to be looser-than-average in Jacks or Better, you have to let your neighbor be looser than you in Double Bonus or perhaps Joker Poker.
Having 5% or so of your video poker games being loose is enough to get mention on the Internet and have a steady stream of customers. Having 50% or more of your video poker games being loose isn’t profitable. There are casinos with the philosophy that goes something like, for example, “every dollar game is set so that optimal play is as close to 98% as possible.” That means that ALL Bonus Poker games are 7/5, and that ALL Double Bonus are 9/6/5 and that ALL Double Double Bonus games are 9/5. Having a floor like this is actually lazy on the part of whoever designed it. Keeping the same average hold, you can design a floor with something like: 5% of the games are around 99.5%; 20% of the games are between 98.5% and 99.5%; 50% are between 97.5% and 98.5%; and the rest are lower than that. This gives you the advantages of having a few decent games, but still keeps your average where you desire it to be.
Plus, this proposed solution meets the model set out in the beginning of the article. The players that are skilled will win, but they will be taking from the players who do not know how to find or play a good game. The casino will make its normal profit percentage with a higher level of coin-in. |
