Question of the Day - 08 June 2020

[Editor's Note: Blackjack Hall of Famer Arnold Snyder answers this one.]  

Here’s a general rule about volatility in games of chance: A game will be less volatile the closer it is to making even-money payouts on your bets. If you bet a dollar to win a dollar, that game will have low volatility. If you bet a dollar to win a hundred dollars, that game will have higher volatility.

So you probably already can see that blackjack has less volatility in the long run than video poker. Other than for the payout on a natural, blackjack has all even-money payouts. The extra money you place on the table for double downs, pair splits, or insurance bets raises the volatility slightly, but nothing like video poker where royal flushes, straight flushes, and four-of-a-kinds have relatively monster payouts.

There are other considerations, however. You can play video poker for 5¢. You’re unlikely to find many blackjack games that take wagers below $5. So if your volatility concern is related to keeping your bankroll intact, you’ve got to consider the cost of playing based on the allowed bet sizes.

With video poker, Stanford Wong estimated a player who is playing professionally should have a bankroll of about $10,000 to play the 25¢ machines. This is primarily due to the volatility while you’re waiting to hit a royal flush. You can sometimes go a very long time (weeks) between royals. Wong assumes you’ll be playing the 5-coin max per hand ($1.25) at a speed of 500 hands per hour. You’ll hit a royal about once every 40,000 hands, or about once every 80 hours of play at this rate. (Non-pros play a lot more slowly.)

This is not to suggest that if you don’t hit a royal within 40,000 hands, you will be stuck for $10,000. Wong is basing his bankroll requirement on the assumption that you will sometimes go much longer than 40,000 hands between royals.

If you could find a blackjack game that allowed $1.25 bets, you would not need a bankroll this large to play the game. Assuming you played 100 hands per hour and the house had ½% advantage, on average it would take you about 16,000 hours to lose $10,000 at this level of play.

Keep in mind that blackjack card counters or other system players who use betting spreads, regardless of whether they’re using a valid winning system or not, will be increasing their volatility on the game. Even though they're still getting even-money payouts on their bets, they'll sometimes win or lose big and sometimes win or lose small.

Because there are so many different types of blackjack games and so many different types of video poker machines, your question doesn’t lend itself to an easy one-size-fits-all answer. But just knowing that even-money payouts provide less volatility should guide you in the right direction. If you play roulette, stick to the even-money bets like red/black or odd/even. If you play craps, bet pass or don’t pass and avoid betting on specific numbers.

If you just feel like gambling, well then, have fun, but don’t complain if you blow all of your Vegas mad money on day one.