The following email was sent to [email protected]. The correct answer, although not that difficult, has too much math for a podcast. So, I’m addressing it here.
I play full pay Jacks or Better (99.54% return), exclusively. I play $1 denomination at max bet for $5 a hand. The casino that I usually play at gives me, at minimum, $90 worth of free play once a week. For cash back, $5 coin-in on video poker earns one point. One thousand points is equal to $1 in value.
Based on this information, do I have an edge? Why or why not? How would I calculate this?
Maybe you have an edge. It depends. Let’s talk about it.
I’m going to assume you play 9/6 Jacks perfectly. That’s a big assumption. It’s probably the easiest video poker game to play perfectly, but most players don’t study and practice enough to play that well. How much your imperfect play costs depends on what mistakes you make. If you go for the royal instead of the flush from A♠ Q♠ T♠ 5♠ J♦, it doesn’t cost you much. It’s a rare hand which costs you very little if you to make that mistake. If you go for the straight instead of the fours in 4♥ 4♣ 5♦ 6♠ 7♥, it’s a much bigger mistake that happens fairly frequently.
The slot club is embarrassingly small. If it really takes $5,000 coin-in to earn $1, that is 0.02%. ($1 / $5,000 = 0.0002 = 0.02%.) Far more common is that $5 earns you five points (which makes it a 0.1% club), but what you present is possible. If it’s 0.1% rather than 0.02%, hopefully you’ll see how that changes the calculation below.
The kicker is the mailer. You told us what you receive, but you didn’t tell us how much you had to play in order to receive that much. How much you have to play is a key part of the equation.
If you play $10,000 coin-in a week and earn $90 in free play, that’s worth 0.9%. ($90/$10,000 = 0.009 = 0.9%.) If you add 0.9% to 99.54% to 0.02%, you have an advantage. If you can play 800 hands per hour ($4,000 coin-in), this edge is worth about $17 per hour.
If you play $20,000 coin-in to earn the $90, that’s worth 0.45%. You now have essentially an even game.
If you play $30,000 coin-in for that same $90, that’s worth 0.30%. Now you’re playing at a disadvantage.
Point multipliers don’t matter much when it’s 0.02% to start with, unless you get something like 25x points, which would be worth a half-percent. Still, even though it’s small, it’s better to play with 3x points than 1x points, although I would play sometimes with the multiplier and sometimes without. Some casinos punish you if they think you only play when the conditions are best. And here, the difference between 1x and 3x is $1.60 per hour, which pales when compared to $90 for a few hours play.
On the other hand, if this casino is 70 miles away and it takes you an hour to drive each way, that should not be ignored. I don’t know what the current accepted figure is for cost of a car including everything, but I’m pretty sure it’s more than $1 per mile. If you’re playing an even game and it costs you $140 in transportation, not to mention several hours, you’re hardly playing with an advantage.
Finally, you said the slot club pays you $90 minimum. That could mean sometimes you get $200. Or some other number. You need to figure out how that compares to how much coin-in you play. It takes a lot of data to figure this out. But it’s not that difficult.
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IRS rate these days for mileage is 57.5 cents per mile, although that doesn’t count your time for driving. I love the scenic drives to many of the Californian Indian casinos, but would probably hate them if I did them every week or month.
This reader question illustrates a common occurrence with less disciplined video poker players. He is playing a game and doesn’t know if he has an advantage or not.
If you are playing a recreational game , whether you are 0.2% or 0.2% negative is not a huge deal. If you are playing to make money, it is a big deal.
I doubt anyone would take a standard, 9 to 5 job and not know how much they make at that job. Same thing here for a player who is playing to make money. And not only does he need to know the minimum mailer, he needs to know the maximum mailer and what it takes to get each mailer. He also needs to know how many hands per hour he plays and how much per month he plays and as Bob mentioned, he needs to know how good of a player he is.
I remember from all the visits I did in most casinos in the Las Vegas valley, there are some casinos that offer great videopoker but the club conditions are bad. This ain’t no news for most readers here. I even noticed that the casino that are on the Strip, some of them have good videopoker but poor club conditions. Cromwell, T.I. and Westgate to name a few. I also noticed that some casinos promote 100%+ games but if you take a look in the menu you find games that have less than 100% return, such as J-o-B. Could be that the writer was playing on bank with optimum play games and got lost in the shuffle playing 99.54 jacks. I don’t know….. Fact is, even casinos that once had good club conditions stepped back from that policy. I just hope that this pandemic will last a few more months until all casinos learn that sometimes it’s good to offer something if you want something. By summer I WOULD LOVE to see some good old promotions be back in place.
From Switzerland / Boris
About that $90+ in free play, we would also need to know whether there’s a fixed formula for how much free play the casino gives this player each week. Does he know what past period determines this week’s bonus? Does he record the exact amount of coin through that he does each week? Does a certain amount of coin through result in the same bonus each time? We need to know these things to make an exact analysis. If any of these components is/are missing, we can’t calculate it exactly.
Good analysis, Bob. But I think your $1/mile estimate of the cost of driving a car is way too high. 30-35 cents/mile is probably appropriate for most cost-conscious people. A really frugal person could get it down lower.
A few years ago, I was driving 50,000 miles a year while making the rounds of some East Coast casinos, so I spent some time thinking about how much that was costing me. I’ve driven my last two cars over 200,000 miles. With a generous new-car cost of $30,000 (and no resale value), that amounts to 15 cents/mile.
With gas about $2.50/gallon, and using a measly gas mileage of 25 mpg, that adds 10 cents/mile to driving cost.
If you get your car serviced every 10,000 miles and it costs you an average of $500 each time, that adds another 5 cents/mile.
Four new tires might cost about $800, and you should get 50,000 miles out of them. That’s another 2 cents/mile.
All together, that’s 32 cents/mile. Even if you drop the expected life of your car to 100,000 miles, that would add just 15 cents/mile to the cost. Doubling the average service cost to $1000 each visit would add just another 5 cents/mile.
I haven’t considered insurance because that’s a fixed cost that, in general, doesn’t depend on whether you’re driving to and from casinos. Likewise for other fixed costs, like licensing. If you can get an insurance discount for low annual mileage, that could be factored in, but the effect would be very small.
I’ve always considered the IRS mileage rate, currently 57.5 ₵/mile, an added bonus to driving. I’m saving money by driving. In years I logged 50,000 miles, the IRS mileage rate reduced my taxable income by more than $10K beyond the actual cost of driving my car.
–Dunbar
I am not an “advantage player” however, I am above average. I play 1$ to 5$. I study the games I will be playing before I leave for Vegas or anywhere else. For Vegas, 4 or 5 times a year, I go for 4 days, usually drive in from CA with a couple friends for VP, poker, and golf. After 4 days of playing VP, my average is losing $1500 in cash. I have won much more, and lost more, but over the last 10 years, that is the average. I also get $400 free play almost every time I go. I get a 2 or 3 bedroom suite, food and drinks, (my friends drink, not me). Everything gets charged to the room and comped. I figure that each time I go, the value of the RFB has to be very close to the $1500 cash I lose. I look at it as breaking even, or maybe a little better. I would never try to make a living doing this, as I could never be that good. I know my limitations. My point is, that you do not have to be perfect to have a good time, or come close to breaking even.
Once we are back to some semblance of normal. I do not see the casinos upping the promotions. I think just the opposite. If they feel for one minute that people will come without a good promotion, they will offer very few if any. They will be more focused on their bottom line. You see in some states, and Nevada, where the take is lower, but the gaming profits are higher. That only happens when the hold goes up, not down.
I agree with Lucky. When everything opens up again, people will flock to Las Vegas in droves. No reason for the casinos to offer incentives. In fact, I expect things to tighten up even more, unfortunately.
Not so sure if I can agree with Lucky’s or Llew’s opinion about the situation once the worst of this covid-19 will be over and people will start traveling again. Sure, many people are hungy to get back to the action and visit Vegas again. I am one of them. If I should notice, however, that parking free and resorts fee will immediately put back in place and they come up with even more “obstacles”, then this would not be much to me liking. And if this happens, my gambling appetite will sharply be reduced. As for the 1.5 or 1.8 Million of locals and thus a high percentage of gamblers living in this town, most of them will remember and appreciate the situation as it was “before” and if it turns out that the comps and points are getting scarce then let’s see what the local’s casinos plan to do next. Especially as a local you are extremely selective and need a reason to visit a casino and play as otherwise you can just as well stay at home and wait. To summarize, with all that many casinos in the Vegas valley, I would not be so sure if the competion is not a bit high to believe that the market is not going to play.
How do you assign value to long term benefits (Caesars 7* Retreat or Celebration Dinners) when calculating the EV of various daily plays?
Does the EV of each daily play have to stand on its own?