There’s a cost for the big jackpot
Even on this side of the industry, the math surrounding progressives is one that confuses most people. As a result, when I perform analyses for inventors who want to add a progressive component to one of their games, I can usually expect to argue with them all the more about how to build them.
Generally speaking, progressive versions of games have larger top prizes than their non-progressive counterparts. This, of course means something has to give somewhere else. It is just not possible to build a game that has the same win frequency, the same payback YET somehow pays more for top prizes!
One of the early models for a progressive payout was video poker. The problem is that the way these are constructed barely makes them progressives. They should probably be more aptly named ‘variable’ payouts.
For most video poker progressives, the initial amount for the royal is set at the same amount that they usually pay – 800 for 1, or $1,000 for a quarter machine. Every time someone wagers max-coin, the jackpot is increased by a few pennies – generally, about 2% of the total wager.
This ‘extra’ 2% comes from reducing the payout on Full Houses and Flushes by 1 unit each, which is about a 2% reduction in the overall payback. Essentially, the casino could just as easily double the payout of the Royal to 1600 for 1 and create a similar experience and payback.
If this were done, however, the strategy of video poker would change a great deal and people would begin to target the Royal Flush far more than they do now. Perhaps an A-10 two-Card Royal would become playable. The end result is that the Royal would become more common and the payback of the game would actually increase by more than the 2% it should as a result of increasing the Royal payback by 800 units.
To some extent this is what happens with progressives anyhow. As the jackpot increases, expert strategy slowly changes. At 900 units, the strategy may not change at all.
At 1,000 units, every hand that can turn into a royal begins to have its expected value increase and they potentially move up the strategy table. This gets magnified at 1,200 units and keeps on going. As the strategy table changes, the frequency of a royal will go from one in about 42,000 hands to perhaps one in 32,000 hands and the likelihood of the jackpot getting hit will increase.
But here is the beauty of the progressive. The casino doesn’t care one iota about any of this. In some ways they would rather people either keep playing normal strategy or stay unlucky. At some point, the game will go ‘positive’ (At about 1,100 units for 1), but ONLY for the players playing expert strategy for that specific level.
Players who continue to play regular full-pay strategy will need another 100 units or so to get to the break-even mark. Players who play incorrectly will still stay well short of the 100% mark.
The casino is risking NOTHING additional. The jackpot is being fed by the 2% that gets added to the jackpot for each max-coin bet and already was subtracted from the paytable.
The advantage for the casino is wonderful if the game goes positive. In theory this should create a type of frenzy causing people who are experts to target the game to exploit the greater than 100% payback it now offers.
The casinos and the expert players are taking from either the poor players or unlucky players who helped to create such a large jackpot. This is an excellent opportunity for a good player who knows how to alter his strategy to increase the frequency of the royal flush to take advantage of the situation, all while the casino is more than eager to help.