Casinos rely on human error to drive profits in video poker
March 26, 2013 3:00 AM
by Elliot Frome
This past week, I received an e-mail from a reader who told me about some video poker machines at the Soboba Indian Casino in Banning, California, that sort of played themselves.
After being dealt the initial five cards, the machine would mark the cards that should be held (presumably according to some form of “perfect” strategy). If you wanted to hold a different set of cards, you had to “uncheck” the hold buttons on those cards and hold the ones you wanted. My reader wanted to know if this is the direction video poker is heading.
A little over a year ago, I received an e-mail from a company called Incredible Technologies that asked my opinion on a video poker game they were offering at Red Rock Station. It allowed the player to “earn” strategy tips through winning hands. This is not quite the same as the first situation as this only provides the player with tips he still has to listen to as opposed to going out of his way to ignore the strategy. Is this the direction video poker is heading?
I tend to doubt it. And, quite frankly, a significant part of me certainly hopes not. Just to be clear, my reasons for hoping this is not the new wave of video poker machines is NOT any fear of being made less relevant to video poker strategy or fear of losing some revenue.
While most of my columns for GamingToday deal with video poker, most of my income is derived from table games. In the 10-plus years I’ve been analyzing games, I think I’ve left my mark in that arena and don’t have to worry about being the video poker guru my father was.
No, my reason for hoping this is not a new trend is that I think it is bad for players. Well, bad for good players. I suppose it might be good for bad players. The problem with this is that it tends to move video poker machines a few steps closer to slot machines.
There will still be significant differences. The biggest being we will still be able to know the payback of a video poker machine by looking at the pay table. However, if all players begin to play very close to the theoretical payback because the casinos hand the player the strategy, then there will be NO way they will be able to continue to offer 99%-plus paybacks.
Casinos can offer games with high paybacks because they know such a small number of players utilize these strategies. They can rely on human error to drive profits while still (truthfully) claiming paybacks near 100%. It is the best of both worlds for them.
That brings me to the reason why I doubt this is going to be a new hot trend that will overwhelm the video poker market. Why would the casinos want to mess with what already is such a great situation?
They get to advertise machines with paybacks at near or over 100%. Yet, they know the games are almost never played anywhere near this amount. Just like blackjack has a 99.5% payback but holds 9-15%, video poker machines do about the same. Given the speed at which video poker can be played, the profits that can be gotten from even quarter machines can easily outpace blackjack.
Most casinos are well aware people such as me exist. We write articles trying to get people to play the proper strategy. We sell books and software to make players, well, better players. At the same time, casinos know that despite this wealth of knowledge that is out there, most players either don’t bother with it at all or make some half-hearted attempt to use it or use it and then abandon it when they don’t break the bank.
I’ve often surmised I could hand out free copies of “Expert Strategy for Three Card Poker” at the entrance of a casino and still 75% of the players who would sit down at a Three Card Poker table would not bother to follow the strategy in the least. So, on the whole, casinos are not very afraid of players bearing strategy because they are such a minority.
However, handing the player the strategy and then daring them to pick a different one may be far more than casinos are willing to do where strategy is concerned. It is one thing to question when a player wants to stand on a soft 16 in blackjack. It is something all together different when a big flashing light comes on to say stick when a player has a 16 vs. a dealer 2, and the only way the player can hit is if he is willing to turn off the stick sign and go out of his way to hit.
In the case of video poker, if a player really wants to not use the house strategy, then he is likely to find a different machine altogether. After all, who wants to have to turn off the machine’s decisions before entering his own on every hand?
So, there is a good chance the actual payback of the video poker machine is going to quickly approach whatever the theoretical payback is. Since the casinos will never allow games to be offered at 99% in this case, their only choice would be to greatly reduce the payback of video poker, which in turn would scare off all the good players while, at the same time, probably increase the payback of many of the bad players as their errors would no longer be a factor.
So, the only way I can see casinos adopting this concept is if they have some crazy reason to scare off some of their most loyal players and want to reduce profits. Nope. I don’t see this as a big trend. At best, perhaps some casinos will use them as a great marketing ploy, but that is it.
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.