Apples and Oranges

The M recently held a 2-week-long point invitational challenge. I ended up winning it, but that is not what this column is about.

About a week into it, a student, Sam, called me up and asked my opinion as to what it would take to win second place ($12,500). I had just seen the standings and the person currently in second place had played about $900,000. I summarized, “If ‘Joyce’ is done playing, then playing a little more than $900,000 will win the prize. If Joyce decides to keep playing and possibly go after first place, then possibly $2,000,000 won’t win. I don’t know Joyce’s intentions, Sam. Do you?”

Sam didn’t know either, of course. (Possibly Joyce hadn’t decided yet. My strategy had been to play enough during promotions so that others would decide to not go after me. That had to be modified as Joyce started to play again on the next to the last day of the event. That’s a story for later.)

I suggested to Sam that he play $500,000 and go for third place. That would return $5,000. It didn’t seem like players were paying much attention to the point challenge, and half-a million should win it. Since this was before the final “Royal Treatment Friday” promotion (natural flushes, any line, receive a 1,000-coin bonus), playing the 25¢/50¢ Fifty Play 8/5 Bonus Poker machine added up to tick under 100%, including Royal Treatment and the 0.30% slot club.

“Go for it. Adding 1% to essentially an even game makes it very desirable,” I advised. “That’s a sizeable advantage for a game where you can play up to $125 a hand. You can play $100,000 an hour with 50¢ Fifty Play, or half that on 25¢ Fifty Play. You’ll get enough royal flushes in Fifty Play that the variance is relatively low.”

Sam decided to play that much — with one caveat. If he lost $5,000 during the play, he’d stop. It made no sense to him to keep playing when winning the prize wouldn’t even make him whole.

“What are you talking about?” I asked. “The $5,000 size of the prize and your current score are like apples and oranges. One has nothing to do with the other.”

“Of course they’re related,” Sam replied. “If I lose more than $5,000, I can’t possibly come out ahead if I only win $5,000. That’s pretty elementary.”

Elementary, perhaps, but wrong. Let’s assume Sam started with a bankroll of $200,000. (I’m sure his bankroll is larger than this.) Would a 1% promotion be a good deal? The answer is ‘yes.’ Now let’s assume Sam started with a bankroll of $2,000,000. (I’m pretty sure his bankroll is smaller than this.) Would a 1% promotion be a good deal? The answer is still yes.

Sam’s score since he started the promotion only affects his accumulated bankroll. A 1% promotion is a good deal at video poker if you’re betting more than $1.25 a hand.

Now if Sam had started with a $10,000 bankroll, then losing half of that would clearly be a major deal. With a bankroll that size he shouldn’t have been playing for such large stakes to begin with. But that’s not the case here. He was well-financed for this promotion. Even if he got behind more than $5,000, there was always the chance for a $5,000 set of dealt aces, or a $50,000 dealt royal, assuming he was playing 25¢ Fifty Play. Several other hands in a row could bring him back. Whatever his score is at the moment is essentially irrelevant, assuming it doesn’t threaten his overall bankroll.

“I understand what you’re saying,” Sam told me, “but Susie won’t. My wife will give me a very hard time if I lose $7,000 while trying to win $5,000.”

“Been there done that,” I told him. “Shirley used to get pretty grumpy whenever I’d lose. Eventually, though, she’s come to accept that I know what I’m doing. She’s not happy with the losses, but at least she accepts them as part of the game. With proper game selection, you’ll end up with year after year of positive results. There’s a good chance Susie will come around as well.”