Anthony Curtis and Andrew Hunt have a YouTube podcast called “In the Wild,” where they address Las Vegas Advisor-kinds of questions. Basically, straight talk about the basics of things gamblers want to know.
Recently, they addressed the Double Up feature in video poker seen here. Other than once confusing the term ‘Double Up’ with ‘double down’ (a term in blackjack), what they said was correct.
Keep in mind that Anthony’s bread and butter is playing in bars on the best lousy games he can find in order to get free meals and beer. While he does fine with that goal, my goal is different. I’m looking at video poker as a way to earn money. I’m willing to play bigger stakes for longer hours in order to do that.
Both of these plays I’m going to describe now are dead, but they reappear from time to time and it’s good to have the basics in your arsenal for when they do show up.
About 25 years ago, the Mirage had some $5 Triple Play 9/6 Jacks or Better games. This was a 99.54% game off the top, it came with a 0.67% slot club, and there were often promotions that added more. Oh, for the good old days!
One player, I’ll call him “Al,” had a policy of tipping $5 for every W2g short of a $20,000 royal flush, in which case he’d tip more. The only time the Double Up feature was activated on these machines was when you hit a W2g. While that might be the last time most people would double up, he found this a money-making possibility.
When he got a non-royal W2g, which in that game meant two-or-more 4-of-a-kinds or one-or-more straight flushes, Al would double up twice! He’d do this to save $3.75 each time in tips!
How did he save this money? Well, instead of tipping $5 for each of the four jackpots, he’d now tip $5 for the one quadruple-sized jackpot. So, he’d save $15 over four normal W2gs, which is $3.75 each.
Most people can’t do this. A W2g is such a rare occurrence that the idea of losing one would be horrific psychologically, but Al took the longer view. Over time, he’d hit a lot of these W2gs. The games were so good back then that it was easy to be a winning player. He thought it better if he tipped modestly, and found a way to reduce his tips without appearing to do so. Had he actually tipped $1.25 per jackpot, the slot attendants would have taken it but talked about him behind his back as being a real cheapskate. It’s better to tip zero in a high limit room than $1.25. He found a way to effectively tip $1.25 per jackpot without appearing to do so.
Another opportunity was available much more recently at Dotty’s — a chain of 15-machine bars across Nevada — although the best game for this and the Double Up feature itself is no longer available. At Dotty’s, they (still) have a promotion where each week they have a drawing and 10% of the W2gs in the preceding week receive a 10% bonus. That is, 10% of the time, a $2,000 jackpot receives a cash bonus of $200. Smart players realize that this is equivalent to a $20 bonus on each $2,000 jackpot.
At that time, they had NSU Deuces Wild (99.73%), in any denomination you wanted where your total bet was between $5 and $250. These were 1-to-50-coin machines where all bets of at least five coins received the full 800-for-1 payoff for the royal.
Doubling Up to get W2gs now made sense. Often players bet $75 per hand. This made quads and full houses (which together happen one in 11.5 hands) worth exactly $300, which required only two Double Ups (a 1-in-4 chance) to reach the $1,200 magic number. Even straights and flushes (which together happen one in 12.8 hands) only required three Double Ups (a 1-in-8 chance).
In round numbers, if every twelfth hand is earning an extra $12 one fourth of the time, and also every twelfth hand is earning $12 one eighth of the time, it’s easy to see how this basically even-money game (including the slot club) can turn into a winner.
In a three-hour session, they might accumulate 20 or more W2gs. Other players in the place, often playing Keno for 40 cents a pull, were in awe about how lucky these SOBs were for getting all of these “big money” jackpots. Of course, half the time they ended up with a $750 straight flush that turned into zero, rather than $1,500. For the 40 cent Keno players, $750 would have been a big money jackpot.
The problem with this was that it was very obvious what the players were doing. It didn’t take Dotty’s long to conclude that these players were “abusing” the program and eliminated the Double Up feature from these machines. (In addition to NSU, all other games paying more than 9/6 Jacks or Better have also been eliminated.)
Also keep in mind that W2gs have more tax consequences now than they did prior to the change in the IRS laws a few years ago. There is no change for professional gamblers, but recreational players pay a much bigger tax on W2gs than they used to. This could easily nullify any benefits from the strategies discussed here.
Next week I’ll describe the Dotty’s promotion in greater detail.
Were the advantages I described here huge? No, not at all. But smart players look for multitudes of these small things that together add up to a nice living. It’s easy for a quarter player to conclude “If I had the money to play $75 a hand, I wouldn’t have to stoop to such shenanigans.” Although I wasn’t a part of either of the plays described here, I can tell you that the only way I can afford to play for stakes this high today is that I used similar types of smart thinking to maximize my wealth growth.
… so from your and the AP standpoint, the tradeoff between increased volatility for increased EV is an acceptable one.
Volatility is not an issue for long-term advantage players.
“Volatility is not an issue for [well bankrolled] advantage players.“
I fixed it for you. You can’t get to the long run without surviving the volatility and it’s very difficult to alter your “bet-size” in video poker as in blackjack. A point commonly lost on non-professional video poker players.
Must’ve seriously slowed down the game. Dotty’s typically doesn’t keep much cash on hand nor are their employees mensa members
I don’t play Deuces Wild or it’s variants. But in NSUD, a STFL pays 10 for 1.
At $25 denoms, it is $125 for 5-coins. At 10 for 1, that gets you a W2G. And a STFL occurs roughly 1 in 195 hands (on average).
“Doubling Up to get W2gs now made sense. Often players bet $75 per hand.“ – BD
Maybe BD will address this issue of a guaranteed W2G roughly every 195 (on average) at $125 a spin vs lots of variance at $75 a spin in his next article. Something that has a 1 in 4 chance of success is a lot of volatility. You can go many spins and whiff (or brick) each time and you can also have back to back successes. The volatility is worse on those 1 in 8 chances, ceteris paribus.
It would nice to see BD’s discussion of CE in action vs the standard professional VP mindset of brute forcing a promotion. This would show the difference between an AP using the mean/variance approach vs typical APs who just look at $EV or win rate per hour, respectively.
Why $25 NSUD? It’s commonly the game of choice for W2G-related promotions.
Since other winning hands also trigger a W2G at $125 per spin, the actual win rate of a W2G is less than 1 in roughly 195 hands (on average).
I am glad that Bob D. included discussion of the tax consequences of getting W2G’s, because too often that drawback is not mentioned in discussions of money analysis by various people. But there’s an additional lobe of that discussion that should be included: Not everybody is a full-time worker (or a gambler equivalent, like Bob). For those of us who are retired and thus not working (or who work very little) and are living off of our monthly Social Security check, our monthly government income is not taxed federally, and in most states it is not taxed at the state level either. For us, neither a $1,000 royal flush nor a $1,250 high-denom hit will result in owing any taxes, up to a certain point. The amount of “taxable” income that a person can have in 1 year without owing any taxes is well over $10,000; the exact amount changes from time to time. Most $0.25 players who are merely visitors to Las Vegas (instead of residents who are daily players) will not get 10 or more royal flushes or W2G’s in any year, so they won’t end up having to pay taxes on any of it. Increasing the denom to $0.50 or higher would double the annual royal/W2G income and increase the chance that all of it will be taxable. But for a non-working nonresident Social Security recipient to intentionally get a lot of W2G’s, this would plunge him into the realm where all of those big hits would be taxed, and thus the activity would be quite foolish financially.
So my question to this community is this: how is it possible for a professional gambler to pay taxes on the WG-2 qualified winners? I always wondered how is it possible because even if you must technically pay 10 per cent or 15 per cent of that, then your videopoker revenues are melting away.
The players I asked this question told me that you may deduct your accumulated losses that you had in a particular year and write that amount off from your jackpot winnings. And then, to my surprise, some players say they are not paying taxes because of that reason. Oh? I then started thinking and tried to imagine where the winner’s result is if you don’t pay taxes as you deduct your losses.
I came to the following conclusions:
– players declaring higher losses than they actually did have are manipulating their final score in order to avoid taxes
– players that in fact had the same amount or more in losses than their jackpots’ total can’t impossibly be winning players
– Free slotplay and comp dollars are not taxable and if you play down your free play and collect that in cash this amount probably doesn’t count as winnings
If comps and freeplay and other promotions would be taxed and the player is declaring correct losses and not higher losses than he/she actually had, then I don’t see any way to be a professional videopoker player.
Conclusion: Apparently your Tax office accepts written kinds of statements about your actual losses and not only the forms being sent to you by the casinos and it’s “possible that somebody sometimes is playing without his players card” and these sessions obviously are not being tracked by the casinos.
If anybody else can explain to me how you can pay zero taxes by dedcucting all losses from your winnings and still come out ahead by the end of the year, I am all ears.
From Switzerland
Boris
p.s. I pay only 0.50 dollar denom games because every 2000 Dollar Royal pays me only 1400 Dollars without the chance of deducting any losses and it will instantly be withheld. This rule is unique and from my point of view unfair. But I play by the rule and sometimes just stick with quarter play. Fortunately there are no taxes on live poker winnings and in the non jackpot games in the pit.
I forgot this: You must be paying taxes in order to justify your cash flow and your increase in your bank account as I am sure the I.R.S. wants to see your bank statements.
From that point-of-view, players declaring so many losses that they are excluded from paying taxes on their winnings can’t impossibly be professionals. Please correct if I forgot a point there….
The problem for a professional gambler, particularly in VP is the number of W2Gs will overstate their actual income. If someone gets $100k in W2Gs but sustained $60k of losses in the process their real income is $40k. When filing taxes they would report the W2G income (plus any other smaller wins presumably), but then are allowed to deduct the losses so that they pay taxes on only their true income. There are probably people that invent losses to cancel all the income but that would be tax evasion and could result in legal issues.
Mr Bob Nelson
Basically, in my comment, this is exactly what I was refering to. There is no way to consider himself a professional videopoker gambler but paying no income tax at all. So, if that would be possible (which I actually believe that it is), then these people are rather losing players than winners. Now , if such a person claims having lost more than the total amount of WG’2 Jackpots and the effective and proven win/loss statements, then my question is the following: how can this person survive? Minimum income is necessary to make a living. Las Vegas as a gambler is an extremely expensive town and if you claim having lost in a particular year but your bank statements show an increase in money, then this would ring bells on each tax inspector. Of course, winning on black jack and roulette is allowed and legal, but not very likely.
If the player wins more than he loses but still claims more losses than winners, then he must be kinda smart and making sure that the money he wins year after year is not ever touching his real bank account. But even then it’s hard to prove to the I.R.S. that your bank balance is always at an equal level and still that person has living expenses.
So, i only see 1 way: You definetely have to be a winning player and you have to be able to prove it to make it look good to everybody. In order to score a net win of let’s say 70,000 – 100,000 Dollars a year and an edge of 1% over the machine in the very best possible scenario…it’s easy to figure out how much money you have to run through a machine to make this case realistic and possible. People that claim fictive losses in order to avoid tax paying will be standing in cold water sooner or later unless they have double-checked every possible outcome of inquiry. Plus they need a proven source of income and spend that money to make it look likely.
From Switzerland
Boris
Yes, if someone does that year after it year it should raise attention. The IRS will generally look at several past years if there is a question. Even professional gamblers can have a streak of bad luck and lose money over a full year and I don’t think that would cause a problem if it is the exception not the norm.
Nike has not paid any taxes in years, Amazon pays no taxes, but we have to sweat these w2’s… I have to pay taxes on them, I am on Social Security Disability plus I collect from a private disability insurance company and my wife still works. Even us smalltime gamblers/players employ people, not at the scale of Amazon of course, but we contribute to our communities. We need lobbyists, someone needs to convince the politicians that we are being exploited, Uncle Sam is not my partner or my buddy. Since I only play 25 cent video poker the only w2 I ever got in Las Vegas was from a royal on a progressive machine, but this fleecing of the little guy happens on virtually every bad beat poker jackpot. I happen to do very well playing live poker, most players in my games do not have the patience or discipline I have developed over decades of play, recently when I hit a jackpot I watched a fellow player give his thousand dollar table share right back not 3 hours later, he just bleeded it out. I do not know his tax situation but I do know he was reported to Uncle Sam as a winner, when he most assuredly was a loser…
As a matter of fact, that’s a shame indeed. All these super big corporation with their ways to avoid paying taxes (APPLE, Amazon, Google, Starbucks, IKEA, and others), and they are legally getting away with it while they’re chasing the small time gambler trying to win 2000-3000 a month sitting in front of a videopoker machine. What a political nonsense system, isn’t it?
Did you know btw that poker players from the U.K. playing poker in Las Vegas or any other gambling game with a jackpot in Las Vegas will not have to pay taxes for it because of the tax deal between the U.S. and U.K.? European Union players pay the taxes in their country, Switzerland is completely excluded from any kind of a deal with gambling winners. If an American tourists visits a casino in Switzerland an hits a major progressive, however, this payout would be top dollar and without tax so that tourist can walk away with 100%. It happened at our casino some years back when that guy hit a big progressive black jack jackpot. Not so sure if that guy finally reported that money to the I.R.S………
Boris,
You are correct that any professional video poker player should be paying taxes on the “net” profit as Bob D explains below.
However you do not have to file as a professional. In the old days when it was easy to make a profit many players would report as a recreational player and report losses equal to the total W-2G income. If you had other itemized deductions like mortgage interest, property tax, etc. you would have no taxable gambling income. It was easy to cheat on your taxes and stay off the IRS radar. I am not saying everyone cheated, but it was and is still very easy to cheat.
I was forced to file as a professional early on because of my state taxes. Many states do not allow you to deduct your losses unless you file as a professional. Many players are not aware of this until it happens and then they can owe thousands. What a nasty surprise!
Of course this is completely unfair to pay tax on winnings without subtracting losses, but there is no lobby for tax fairness for recreational gamblers.
In a recent year, I had $750K in W2gs and a $100,000 net win. I paid taxes on the net win (and on income from other sources including teaching, current writing, royalties, plus other things), not on the W2gs. I file as a professional gambler and so get taxed on net win, not on W2Gs. This is very different for non-professional gamblers, who must count W2gs as ordinary income.
No I don’t think it’s fair. The tax code is the result of decades of compromise with all kinds of exceptions in it successfully obtained by lobbyists for various interests. I hope this doesn’t turn into a political argument — from which there is no escape in our current environment.
My point is that there is a very weak correlation between W2gs and taxes paid for professional gamblers, even for those of us who attempt to play by the rules. Yes a 1% edge can be reduced by small percentage due to taxes, but it’s nowhere near the 30% or whatever the standard tax rate is.
“I hope this doesn’t turn into a political argument — from which there is no escape in our current environment.”
Good one!
Boris,
You are correct that any professional video poker player should be paying taxes on the “net” profit as Bob D explains below.
However you do not have to file as a professional. In the old days when it was easy to make a profit many players would report as a recreational player and report losses equal to the total W-2G income. If you had other itemized deductions like mortgage interest, property tax, etc. you would have no taxable gambling income. It was easy to cheat on your taxes and stay off the IRS radar. I am not saying everyone cheated, but it was and is still very easy to cheat.
I was forced to file as a professional early on because of my state taxes. Many states do not allow you to deduct your losses unless you file as a professional. Many players are not aware of this until it happens and then they can owe thousands. What a nasty surprise!
Of course this is completely unfair to pay tax on winnings without subtracting losses, but there is no lobby for tax fairness for recreational gamblers.
Hello people
From what Mr Bob Dancer explains , there is obviously just one way to do it, and it works for him. You can’t be a winning videopoker player without paying taxes on your WG2 forms, that’s crystal clear. Common sense is telling me that the only way to make a living doing that is by playing for extremely high stakes and accept the fluctuations and make a profit in the 1-2 percent range overall. This is probably the only way. Everything else is hobby videopoker. I am nothing but a hobby player, but it’s fun, anyways.
Bottom line, people showing off in the casino while playing the machines and getting paid in full for their Royal Flush and afterwards stating that they’re not paying any taxes because they can write off their losses from ther winnings must be either losers , pathologic gamblers , or people not telling the truth. I was a bit disappointed whenever they paid me just 1400 instead of 2000 for my Royals but then I am telling me that’s still better than missing the top hand. According my computer program, the average return on NSUD if you play 0.50 or higher and must pay taxes immediately drops from 99.73 to 99.18%. If I play on multiplier days and the casino gives me comps from time to time then the game is still not all that bad.
Boris, my friend, I must disagree with you.
There is NOT just one way to do it. Every professional goes about it slightly differently from the others. Some, for example, only play progressives, and, with teammates also scouting, wait until progressives are high enough and jump on them. They work more (including scouting), play less, but with a much higher margin.
I don’t recommend it, and it’s tantamount to fraud, but some players regularly play on 20 players cards and harvest the free play off of all of them.
The most successful players have a lot of “outs,” meaning places they can play. They play at the one with the best game today. As casinos have become more willing to banish players, the number of outs for each player has been decreasing.
Hello Bob
The player’s card thing is something I also heard of. I played at a place that is fairly generous in terms of returning goodies , comps, points, to the patrons. Of course, that’s the place where such activities happen all the time. The whole thing may work out until someone hits a taxable jackpot and was playing with someone else’s card. I would think that this usually puts an end of such activities. At least for that player at that particular casino.
From Switzerland
Boris
I’ve had this question for a long time, and Mr. Dancer is one of the only people who might have ever addressed it.
Why is a player NOT given any comp points/player points for betting the double up? Or have there been casinos that DO give comps for this?? I have noticed when playing the double up in any casino that no player’s points are awarded, yet I am often betting 2, 3 or 8x more than my original bet on the hand. Has this question ever been followed up to casino mgmt. by Bob, or does he know any background on it?
Thanks!
Asian Bino
Asian,
The Double Up bet is a 100% bet, meaning neither you nor the casino have the edge. Casinos are not interested in encouraging extra play on a game this loose. Yes it’s gambling, and can go either way, but over time it’s going to average out to zero advantage to the house (and the players). Casinos offer slot club points in order to get you to gamble more, on their 95%, or 97%, or 98% games — where they make money. They see no reason to reward you for making bets that do not benefit them.
Similarly, most casinos do not include the money you bet on odds as part of your total bet when you play craps. if you find a casino that does do this, bet the DON’T. for the same total risk, you’ll get a better rating.
Thank you for your response. It sounds as though this is YOUR answer, that you may have gleaned from the way casinos operate, but not the casinos’ answer, am I correct? Can I assume you’ve never actually asked the question?
The obvious follow up is, if casinos don’t want to encourage extra play as you phrased it, why do they even OFFER this?
Is there some large following of players that ONLY play ‘Double Up’ machines that the casino is trying to attract? I don’t think so. The answer in MY opinion is, You have to have WON 5, 20, 125 credits (or even pushed) to even PLAY the ‘Double Up’, and the casino is happy to take a 50-50 shot that you then IMMEDIATELY LOSE what you just won, with 0 variance.
I agree Boris, video poker is the best game in the casino for me besides live poker, it’s a hobby and a luxury for me, I cherish the few times a year when I can play it. I have learned from this blog over the years how to find better paying games and basic strategies, video poker challenges you on multiple levels and rewards you for good play. I have no intention to become a professional player, my back and neck could not hold up for the hours it would take, in a live poker game you can get up and walk around while your chip stack is protected. Plus my wife is not wired to be a partner to a professional player, which is a nice way of saying she would explode like an M80 and light up like a Roman Candle… Most people who frequent casinos prefer the mindless games of chance that the house dominates with built in advantages, or they toil at blackjack. I just love the game and I enjoy reading up on it, video poker was the initial impetus for me to expand out from the Strip casinos and discover the locals places that I now much prefer…
Michael,
have you ever played at Red Rock Casino? There are dozens of high return quarter machines but some banks allow you to play up to 1 dollar denom, which can put you on a nice roller coaster ride , to the upside or vice versa. I heard, however, that the FPDW version has been deactivated , not so sure if this is permanently or just during this pandemic. Would be sad to know that this top game is no longer available. I used to spend hours and hours on that bank located right in front of the movie theaters’ entrance. It was the bank I hit the most Royal Flushes over the years (of course because that’s the bank I played mostly when the live games in the poker rooms turned out to be tooooooooooo tight). Live poker is ok, but I think the level of players in the locals casino is just too good so in the end it’s only the house that can make money. That’s when I started to play videooker, and it’s definetely a great hobby. If you hit the Royal Flush it’s big time fun, and if you lose at least you get some points onto your card. In Europe people like to play stultifying games, some are even using auto-play , which puts you even more on the sleepy mode. I don’t get it why Europeans don’t like Videopoker. Must be something that’s especially designed and created to Americans 🙂
From Switzerland
Boris
Red Rock is my favorite Las Vegas casino, I used to take the kids there and give the wife a break, they would see a movie while I played poker, then I would give them money for the arcade, and we would have lunch together then bowl a few games. It does have good video poker, it’s not terribly smoky, and its friendly. Yes, the locals are good players, but predicting a good player is easier than predicting a lousy player, so I adjust. And the Red Rock poker room has a variety of games… Now when I drive in to Las Vegas we either go to Red Rock or Green Valley first, since the Green Valley poker room is closed now we will for sure hit Red Rock. Plus the drive through the beautiful red mountains is a great way to spend some time not gambling. Red Rock is a gem…
I am with you on your Red Rock comments. Since I like it there so much since it opened but can’t afford to stay there as the rooms are quite pricy, my strategy is to stay at the Suncoast where I used to get good room deals. And if you time it right and play the Seniors days promotions and pick all possible options for you, then you can have a great time there.
There is one thing that I have to mention which is not so much to my liking: The noise on very busy days such as Saturdays after 3 p.m. till midnight or Sunday afternoons , as well as Thursday nights. When I play under extreme noise I can’t concentrate and then I am making more errors, can’t play my cards right. The coffee shop is great, the buffet is great (hopefully it will re-open) and there’s always enough parking. Afterall, it’s one of the best casinos that I have ever visited in my life. I once bought a pool pass for 15 Dollars to relax outside. I was stunned about the beautiful pool landscape.
Hopefully 2022 will be the year when we all can go back to our normal “normal”. I am looking forward to visiting again Redrock and the other locals’ casinos.
Does anyone here really care about volatility? The main success factors are knowledge of game and adequate bankroll. Once you have calculated the best hourly return rate, go for it. If you do not have the time or bankroll to overcome volatility variances, you probably will not become a successful advantage player.
“Does anyone here really care about volatility? The main success factors are knowledge of game and adequate bankroll. Once you have calculated the best hourly return rate, go for it. If you do not have the time or bankroll to overcome volatility variances, you probably will not become a successful advantage player.”
If you do not care about volatility, how do you know if you have an “adequate bankroll”?
Jerry
Let’s talk about Triple Deuces Wild. The game, according my knowledge, would pay 99.90% in the long run. At Sam’s Town and at Red Rock I found several of those machines. The payout per se would look terrific and attract all players looking for profit. The offered 10-8 version has super high variance and will eat up your bankroll at a pace not seen at many other games. The problem is that it pays less for the wild royal and other hits that are signifcantly important for your short term play. If you don’t get enough sets of Deuces that pay 3000 instead of 1000 on other versions of Deuces Wild, you lose your money just too fast. I tried it out and it shows. I haven’t played that game since and it’s obvious that other players must have felt the same. These machines sit idle most of the times. Players and more play for their money, and the bankroll requirements are definetely in proportion not only to your bet size, but also to the kind of game you picked. Please correct me if I am wrong on that one.
From Switzerland
Boris