Blackjack payback determined by player strategy

March 11, 2014 3:00 AM
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Blackjack It was 16 years ago this week that my dad passed away. It hit me a couple of weeks ago as I turned 48 that I had now lived about 1/3 of my life without him.

I can’t believe he’s been gone this long. Before he passed away, I was in charge of maintaining his website. When he died, I turned the homepage black and posted up the lyrics to a song by Dan Fogelberg – “Leader of the Band.” One paragraph of that song has always been especially poignant to me:

The leader of the band is tired

And his eyes are growing old

But his blood runs through my instrument

And his song is in my soul

My life has been a poor attempt

To imitate the man

I’m just a living legacy

To the leader of the band

Ironically, neither my father nor I are the least bit musically inclined. But I am still just the living legacy to the leader of the band.

Miss ya, Dad.

As far as casinos are concerned, just how important is it for players to play the correct strategy? Most of my columns look at this aspect from only the player’s perspective.

I put it in terms of a loss rate per hour to the player. I turn this into an overall impact to the player’s bankroll over a weeklong trip to Vegas. Today, I want to look at strategy at a very different level. I’m going to look at how it has changed the landscape of gambling in the world.

If you go back in time, not all that far, to about 1980, there was really only one game in the casino with any real strategy – blackjack. I’m ignoring the poker rooms because the casinos don’t really care who wins or loses there. They just care that someone is playing and as long as they do, they take their rake and are happy.

In 1980, the overwhelming majority of the casino floor was covered by craps, roulette, blackjack and slots. Slots clearly have no strategy. In roulette, there are a few wagers that have lower paybacks than other, but that’s about it.

Most wagers have the same payback and all you can do is avoid some of the bets with the lower ones. Craps is rather similar to roulette. There are some prop wagers to avoid and you can argue that the strategy is lay the maximum true odds that you can, but this isn’t really “strategy.”

That leaves blackjack. A game in which the payback to the player is very much determined by the hit/stick strategy the player employs.

Over the past 30-40 years, I think the casinos have noticed a vast improvement in the quality of play by the player – much to the casino’s detriment. Thanks to home computers, players were able to practice at home and proper strategies were able to be disseminated much more rapidly.

The result was that the hold in casinos dropped considerably for blackjack. Some casinos were able to push back by changing the pay on Blackjack from 3 to 2, to 6 to 5. The payback of blackjack was decreased by 2%+, which is a nice way to say the house advantage grew by more than 400%.

In my opinion, as the hold dropped, casinos became much more ready to accept the new table games that were being invented. It started with Caribbean Stud and Let It Ride, but it exploded with Three Card Poker.

There was a little bit of strategy in these games, but the payback, even for perfect play, was about 98%, which gave the casino a bit more breathing room. Also, the average wager wasn’t just the 1.15 units of blackjack, but averaged much higher than this.

In a strange way, the fact that the player learned proper blackjack strategy led to the proliferation of other games. Casino profits increased and players prospered by gaining access to new and more entertaining games.

While the casinos were willing to try something new on the table side of the house, they were also willing to try something new on the slot floor.

Video poker machines made their debut as well. But, while the early table games had strategy that was easier to learn than their predecessor (blackjack), the absolute opposite was true of video poker. Video poker’s strategy was as complex as blackjack and it was attempting to take up space where a game with absolutely no strategy had been.

I can’t help but wonder if video poker would have survived if strategies had not been developed for them. It is possible they would have because even by playing by the seat of one’s pants leaves a video poker machine paying about as well as the average slot machine.

Of course, we have no way of knowing what would’ve happened. This is because in the late 1980’s or early 1990’s, a retired electrical engineer who was a bit bored in retirement decided to buy a computer, teach himself how to program and created the first strategies for video poker.

People in the industry coined my dad the “godfather” of video poker. He didn’t invent the game, nor did he have any hand in its creation. But, there is no doubt he created the first strategies for video poker and had a lot to do with it becoming as popular as it did.

I have always found it amazing that my father essentially created an industry (gaming analysis) at the age of 60-plus, while just trying to keep from being bored in retirement. He analyzed, literally, hundreds of games for inventors. It was as if the concept of being able to mathematically analyze a game had never been thought of before.

When he started there were a handful of games beyond those I mentioned earlier on the casino floor. Today, probably 25% of the table game side of the casino is populated with proprietary table games. Many of these games he did the analysis on – Three Card Poker, Let It Ride, Caribbean Stud Poker and Spanish 21. These are four of the top 10 games in the industry.

Without him blazing the trail, I doubt I would be doing what I do today. I’ve added to the top 10 with Mississippi Stud Poker and Ultimate Texas Hold’em.

The casino floor has changed significantly in the past 35 years because of strategy. Players learning blackjack strategy opened the door to all the new games. Video poker strategy allowed the game to thrive and not die an early and horrible death.

Miss ya, Dad.

Elliot Frome is a second generation gaming analyst and author. His math credits include Ultimate Texas Hold’em, Mississippi Stud, House Money and many other games. His website is www.gambatria.com. Contact Elliot at ElliotFrome@GamingToday.com.

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