Every now and then I get a question about tipping. Somebody hit a 50¢ royal flush and wanted to know how much to tip on the $2,000 jackpot. He actually tipped $20 and wanted to know if that was too much or too little. Although everybody has a different formula for this, most folks would consider tipping 1% on such a jackpot to be in the ‘reasonable’ range. I think it’s the wrong question.
A 50¢ royal is a pretty rare–every 40,000+ hands–event. Tipping $5, $10, $20, or even $40 for such an event doesn’t affect your EV very much because it happens so rarely.
If you’re playing a $5 or $10 game, you’re probably getting hand pays every 400 hands. This is 100 times as often as you’re getting them on 50¢ machines. The amount you tip here makes a HUGE difference in your EV.
Do the math: A $20 tip on an every 40,000-hand event is the proportional equivalent of a 20¢ tip on an every 400-hand event (i.e., 20¢ is 1/100th of $20 and a 400-hand event is 1/100th of a 40,000-hand event). And tipping 20¢ will tick off casino employees worse than tipping zero.
As a percent of total bet, tipping $1 on a jackpot earned while playing $10 games is comparable to tipping $20 on a 50¢ jackpot. Tipping $1 on a jackpot will give you strange looks but it will probably be accepted with a “thank you,” albeit perhaps sarcastically. If this is the amount you deem appropriate, it’s probably better to stiff them nine times and give then $10 the tenth.
I care about EV and as such I look at tipping as a proportion of total bet, not the amount of the jackpot.
The other factor to consider is how often you play. A $10 player could be getting 100 times the number of hand-pay jackpots of a 50¢ player who plays as many hands. But if the $10 player is a pro and the 50¢ player is an occasional recreational player, the $10 player is getting thousands of times the number of hand-pay jackpots simply because the pro plays a lot more hands.
In this scenario, the 50¢ royal may well be a once-every-two-year event. A once-every-two-year royal is VERY exciting. Folks tend to tip more when they are really excited. For someone who gets 100 hand-pays a month, however, each one is not such a big deal. It makes sense to tip less in this kind of situation…if at all.
Although it varies quite a bit depending on the availability of games, I typically receive between $4 million and $10 million in W-2Gs annually. Tipping 1% of that would be $40,000 – $100,000 per year. Forget about it! That’s not going to happen. More than once that would have turned a winning year into a losing year.
I’ve heard folks say, “If I had the money to play $25 machines, I’d definitely tip well.” Perhaps. Talk is cheap when it’s unlikely you will ever be in such a position. If and when you actually get into that position, you’ll find the world looks a lot different than you thought it would beforehand.
And it remains much easier to tell others what they should do with their lives rather than figure out what’s best for your own life.