I ran into a man, “Paul,” who had taken several of my classes. I remember Paul as a better-than-average student. I believe he makes good “what game to play” decisions and will have a strategy card with him. When we met in early January, I recommended that he play the South Point promotion because I thought it was a good one for him.
Paul commented that he was a quarter player and had lost half his bankroll in the past few months because he hadn’t hit a royal flush since October. So he was laying off playing for a while. He would add to his gambling bankroll from his job revenue and when he built it up again, he would go out and start playing some more.
I made a comment that I hoped was supportive: “Sometimes you have to do what you have to do.”
And then Paul was gone. You now know as much as I do about Paul’s finances or lack thereof. The rest of this article is speculation on my part. I might be way off with some of my assumptions, but the topic is worth discussing.
My first thought was that if he could lose half of his bankroll in a couple months of part-time play (he has a full-time job and a wife/girlfriend that he brought to class once), then he was WAY over-betting his bankroll.
Later, I remembered that my primary reference is with regards to gambling as a profession. In my world, there is no safety net. You need to bet small enough so that 99% of the time (this is a parameter that can be set by you and different people have different risk tolerances) you will have enough bankroll to survive whatever swings come your way. Playing for stakes that could result in going broke in three months would scare the hell out of me. No thank you! (Personally, as a 69-year-old man with my best earning years behind, I’d want a 99.99% chance of not going broke — at least. This is only somewhat offset by additional income coming from various sources.)
Paul’s point of reference is that he has a full-time job and that this steady income source is a big safety net. He might well figure that he has enough bankroll to handle the normal swings 40% – 50% of the time and if he’s on the wrong side of that, he’ll take six months off from gambling while he replenishes his bankroll.
That might be an okay approach if you’re really disciplined. Can you really stay out of casinos for six months? Many players could not do that. They would keep playing until broke — often going into debt or selling valuable assets to support their habit. Not good.
It’s possible Paul doesn’t have a really good idea of how much bankroll is required to play a given game. Although software is available to help figure this out, many people don’t bother going through the exercise. They just play and hope they don’t run out of money. So long as you have a source of income that will replenish what you have, this isn’t a terrible way to go.
At the same time, “hope” isn’t a strategy. And many people don’t have a strong source of income that will keep them in the game even if they run out. Let me go through the exercise of figuring out how often Paul would go broke playing this South Point promotion all month. (Obviously this analysis is being published after the January promotion is dead and gone. Still, promotions at many casinos, including the South Point, have a way of returning a year later. It’s still useful to go through this exercise.)
I would recommend to Paul that he use Video Poker for Winners to perform the following calculations.
1. Assume he is playing quarter NSU
2. Assume the “Spin to Win” promotion is worth 0.5%. That’s what I assumed at the start of the promotion. My actual collection was closer to 0.6%, but I didn’t have that figure until after the promotion was over. You have to make your estimate beforehand.
3. Assume he is going to play $2,000 a day for each day of the promotion. You can actually play up to $8,000 a day for this promotion in $2,000 increments, but for a quarter single-line player who can only play part-time, $2,000 a day is probably about right.
4. He will earn 0.5% * $2000 = $10 on average each day for the spin. (Usually he’ll get 2500 points, which is worth $7.50, and the next most common is $10 in free play. You don’t need to get the $25 free play award very often to average $10 over the month.)
5. Assume he gets $10 a week in mailers from the South Point. (I have no idea how much, if anything, he gets.)
6. Assume he gets $20 a week on Sundays when he plays because he gave his email address. (I have no idea if he actually provided his email address.) He could pick up this money Friday, Saturday, or Sunday, but since the Spin to Win promotion is only good Sunday through Thursday, Sunday is the day when he could “double up” on promotions.
7. Assume he also played on the 2x point day (Monday, January 18), earning an additional $6 for his play over and above the $6 we already counted.
8. Assume he was going to play all 17 days of the promotion.
9. Assume that the slot club pays 0.30% during single-point days.
10. Assume his starting bankroll was $800. (I just made this up.)
Putting that all together, he’d earn (($6 * 17) + $6) = $108 in cash back. He’d earn $40 in weekly cash back and $100 in Sunday money (four weekly mailers and five Sundays in January) for an additional $140. He’ll receive $170 (in slot club points which may be converted to cash easily) for the spins.
Over the month, he’d play 1600 hands a day * 17 days = 27,200 hands during the month.
I’m making the contrary-to-fact assumption that he received the cash back and Sunday money and weekly mailer money all up front. That would boost his starting bankroll to $1,048.
EV-wise, playing 27,200 hands at 99.728% means he would lose $103 on the play. This is more than offset by an expected growth in assets of $418. So his average bankroll growth during the month would be $315, assuming this was his only play.
Using VPW, I would go to NSU; for quarters; then ANALYZE; then BANKROLL. I’d enter in a starting bankroll of $1,218; number of hands played of 27,200; and enter $4,000 for when I was going to quit. (I’m not suggesting he ever quit unless he goes broke — but the software requires a top figure to put in. Being ahead four royals over less than a cycle is pretty remote. The actual results below show it will happen about 0.17%, which means about once every 600 trials.)
The chart shows he’d go bankrupt 21.24% of the time — which is an understatement because he wouldn’t collect the entire $418 in bonuses unless he played every day. So let’s say he’d go completely broke 25% of the time.
Is that too often to risk playing? Certainly for me, but maybe not for Paul because he has another source of income.
What if he started with a $600 or $1,000 bankroll instead of $800? Or what if his mailers were bigger or smaller than what I assumed? Those are just parameters. Now that you know how to figure this out, you can rerun this with your “real” numbers.
You also need to get an idea of how devastated you would be if you lost your entire bankroll. Each of us reacts a bit differently to this. But even if Paul totally passed on this promotion (still collecting his mailer and email money, I assume), he would still have less than $1,000. It’s possible that starting over from zero is not that different from starting over from $1,000.