Say you’re playing 9/6 Jacks or Better and are dealt a hand like A♦ K♣ J♦ T♦ 3♦. The best play, of course, is AJT3. Many players hold the inferior AJT. As I see it, players make the lesser play for one of two reasons:
- They simply do not know that AJT3 is worth 3.7¢ more than AJT for the 5-coin dollar player — given that the fifth card dealt was an off-suit king. Holding the flush kicker is a rather advanced play and many players aren’t students of the game. Or maybe they go back and forth between games without understanding the differences between them and make more-or-less the same plays for all games.
- They know AJT3 is better and they just don’t care. They really love to get royals and 3.7¢ isn’t that big of a cost for a chance to get such an exciting hand.
Today I want to address that second group of players, namely the ones who are willing to pay an extra premium in order to get the royal flush. My position is that for most players, this is a costlier move than they realize.
When I spoke of that 3.7¢ difference in value between the two plays, the math included a 1-in-1,081 chance of getting a $4,000 royal flush. The trouble is that the $4,000 royal flush for most people isn’t worth $4,000.
First of all, there’s tipping. When they bring you your money, they usually provide you with 39 $100 bills and five twenties. You’re not required to tip, but many players give away one or more of their twenties to the casino staff. If you’re generous enough to give away all five twenties, you have increased the difference between holding AJT and AJT3 from 3.7¢ to 12.9¢. If you got the best hand available holding AJT3, namely a $30 flush, no casino employee would be there holding his/her hand out expecting a share of it.
Second, and far more importantly, there’s a W2G that comes along with that $4,000. If you’re playing in Mississippi, the state takes away $120 — with no chance of getting it back. Louisiana takes $240, and you can get some or all of that back by filing a Louisiana state income tax form. If you fill out the form yourself, it takes an hour or more and you may not do it correctly. If you hire a tax professional to do it, it can cost more than the $240 you’re hoping to get back. There are a few other states with similar policies. If you shrug off that extra $240 every 1-in-1081 times it occurs when you draw two cards to AJT, that increases the difference in EV between the two plays by an extra 22.2¢.
Possibly different from the state where you’re playing, the state where you reside has tax rules too. Some states let you deduct your gambling losses from your gambling winnings. Some don’t. Some states have a state income tax on gambling winnings. Some don’t. Professional gamblers have different rules than non-professionals. If you itemize your W2Gs, it reduces other benefits you can claim.
I’m not a tax expert by any means, but I can safely say that there are significant costs to getting a $4,000 royal flush for many players.
The third reason royal flushes can be “bad news” is that casinos get excited if you get too many of them. Not so much for $4,000 royals perhaps, but if you play for larger stakes, $20,000 or higher royal flushes end up with you being discussed by casino management. Although exactly how many royals you hit is largely luck, being lucky can get you kicked out. Nobody has everbbeen kicked out for hitting too many flushes.
If players correctly understood the factors discussed today, even on a hand like A♣ 6♥ J♣ T♣ 3♣, where AJT is superior to AJT3 by 5.1¢, these players would intentionally and intelligently go for the flush — simply because ending up with the royal has so many additional costs.
(I understand that the two hands presented today look virtually the same to many players and they cannot see why the correct play is different. That’s a discussion for another day.)
Playing for quarters or less makes you immune from these considerations at most casinos. Some casinos, however, do make a $1,000 jackpot a hand-pay situation. If that’s the case where you play, some of your immunity disappears.
Taking slightly the worst of it to go for a jackpot that creates a financial burden strikes me as similar to paying money to buy heroin. Heroin ends up destroying an individual and to pay money to do this boggles the mind. Most healthy people are disciplined enough to stay away from heroin. Few gamblers are disciplined enough to be willing to pay a small premium in order to stay away from royal flushes.
I have studied your programs for many years and i know I still make mistakes. I will make this mistake every
time because, I do like to get Royal Flushes. As far as I’m concerned that’s the reason I play. I want the tax problem, (this means i’m I’m having a good year) and want to win as much as possible.
When I have hit royals in Ohio my accountant does charge me any extra for the extra form that has to be filled out.
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I’m sorry he DOES NOT charge me any extra
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This begs for a tip + tax + jackpot-averse adjusted basic strategy. Is there any way to do any of these things using your software?
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If you assume your tip + tax = $500 and you’re playing for dollars, you can set the software so that the royal flush pays 3500 rather than 4,000.
If you assume a higher or lower tip or taxes, you can change the royal flush number accordingly.
To do this click on OPTIONS –> CHANGE PAYTABLE and make whatever changes you like.
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Wow. When I first started I thought the strategy was to play each hand as perfectly as you could, so that you could maximize the number of hands you played, so that you maximized the chances of a RF, without which you would never realize that Job 99.54%. So yea, I guess on ones like this I “lean” towards the RF – looks like I need to revisit the Analyze button on my WinPoker. Thanks!
And on the two hands – the first one you’ll get one less straight than the second?
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Assuming you’re going for the 3-card royal flush, on the first hand you’ll receive four fewer straights and three fewer high pairs (out of 1,081 draws) compared to the second hand.
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I know that my comment will draw scorn but if there was a $20,000 royal at stake I would hold the A,J,T, (maybe just once???) and get religious very quickly – but probably only for a shot at $20k.
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I fall into your second group. Will always go for the Royal. Why……. your insight is excellent for those playing dollars or higher, I play quarters; to avoid the high taxes. No W-2 G on $1000 win. So as I see it, invest $1.25 and return ($1000 – $1.25 -$20 = $978.75) plus the comps generated by the play. I live in the state with the highest state income tax in the nation, and I will avoid W-2 G’s whenever I can make a smart play. Thank you for such a great article. I always wanted you to address the W-2″s in your calculation for overall EV.
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I don’t care how big the jackpot is. I don’t tip more than $2-$3 per person handling my jackpot. Why should they be making more than my cocktail waitress? Taking my drink order and bringing a fragile and heavy item VS. A jackpot attendant, a service I didn’t ask for?
I really shrug at anyone who would tip more than $5 for a payout, and that’s most people.
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You tip the cocktail waitress to get faster and better quality service, and maybe you think you have a chance when they’re on break, but I’m pretty sure the cocktail waitress is not going to get you backed off. A handpay is different. Most casinos have the two people rule, for security reasons, one person pays while the other observes. The payer gets the tip but is not going to back you off, but they do have your ID information. The observer is the one you want to watch, but while not making it obvious you are watching. The observer is probably well dressed and salary so they don’t get your tip, but they are making a judgement call about whether or not to back you off. They will probably check your record on a computer after the handpay and make notes. Not tipping the staff or even worse a cheap insulting tip could be a reason, it doesn’t take much.
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I play optimal strategy, so in the hand with the King I know the exceptions and would keep 4 to a flush. I do go for the royal in the hand with the 6, but giving a $20 tip on $4,000 and being able to itemize I think it’s still the better play. But you make a very good point about the “other” costs. My job was suddenly transferred late last year from a company without a 401(k) to one with a 401(k). While that is normally a good thing, I was now subject to the income limits for a before-tax IRA contribution, and my royal flushes put my income over the cutoff for that. Luckily I was allowed to and able to afford a 100% 401(k) contribution for 2 months, so it worked out ok.
Do we know if the new tax bill eliminates the itemized deduction for gambling losses? In the 25% bracket, I think that 9/6 JOB is reduced from 99.54% to 99.05% (maybe a drop higher with strategy adjustments), and to me that is unacceptable. I don’t want to play quarters or switch to black jack. I live in NY and can no longer get comped weekend rooms in AC, and if I went to quarters or black jack I’m not sure if I would even be able to get comped weekday rooms so I can spend a few days there when I’m on vacation.
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Nobody knows for sure what the final tax bill will entail.
But tax guy Russell Fox will be our guest on GWAE next week and you can bet that the very first question we give him will be to use his crystal ball and give us his best judgment as to how various possible versions of the tax bill will affect gamblers
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I have been watching carefully the evolution of this so called tax reform bill as it is being massaged and created in both house of Congress. Of all the articles I have read, nothing has been said about the problems this will cause if passed in current form. Personally, my VP playing habits will change to avoid W2Gs at all cost if this bill passes and is signed by Trump. I have talked with the CEO of WNYOTB about this potential problem it will create for the gaming industry if we lose this deduction. My only hope is this bill, if passed, will take effect on 1 January of next year and won’t apply to the current tax year.
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All video/slots have an internal accounting programs. That’s why you see various signs in casinos such as
“99.9 % payout” for example. None, I repeat NONE are truly random. If they were truly random machines, that would place the “House” in a position they could actually lose money. The house NEVER gambles. When the machine needs to give back money, it will. Play basic video poker and hope your on the right machine and the right time, period.
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You are entitled to your opinion.
My considered opinion is that you are completely wrong. It is VERY possible for players to be net winners in casinos. A lot of us have been doing this for decades — in various games — including video poker.
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You have to also determine how often these close plays come up. How often are you dealt 3roy/4flush with a straight/10 penalty card? If it’s costing me only 3.7 cents once an hour or so, no big deal. Most people waste more then that on other frivolous things. But if it comes up say 50 times an hour, then we’re talking more than chump change.
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Hello, Great piece of information over here.
Thanks for sharing!
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