The talk is all about skill-based slot machines

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This past week, I listened to an industry leader talk about some upcoming changes to casino games. More specifically, he was talking about the proliferation of regulatory changes that were beginning to allow skill-based slot machines.

One of the first things he mentioned was that we’ve had skill-based games for many years, namely video poker. Okay, so I’m not fond of video poker being called a slot machine. But, to regulatory agencies, this is the category they generally fall under.

This speaker so casually described video poker as a skill-based game. To say the least, I agree 100%. But, the industry hasn’t always.

Anytime I hear this discussion, I think back to a story my father told me. I looked through my columns and found the last time I discussed this was more than 10 years ago. The story is about a court case in Pennsylvania that centered on whether or not video poker was a game of luck or skill. The judge ruled luck.

I wonder if 20-plus years later, he’s changed his mind or if the regulatory agencies had to do it for him. In my opinion, this judge either didn’t understand gambling, math, or both!

The speaker used a scenario whereby the player would simply press deal and then draw without making any decision. He said this would result in a payback of about 30%. For full pay Jacks or Better, it would actually be closer to 36%, but you get the idea.

Expert Strategy will net you more like 99.5%. That’s quite a difference. Using this scenario, I’m guessing even the judge would rule video poker to be a game of skill.

But to believe there is anyone, even without any real skill, who would play video poker and indiscriminately hit the draw button without holding cards ever, is really stretching it. For the court case an expert was brought in who analyzes what might be considered a common sense version of strategy.

It probably mimicked the type of strategy one would use at a poker game. You keep all Pairs, Trips, etc. You probably go for 4-Card Straights and/or Flushes. Using this “common sense” strategy, it was determined the payback would be just below 90%. This means a reduction of about 10% or an increase in the house advantage of roughly 2000%. You’re not winning very often on a machine with a 90% payback!

This 10% difference was not enough to sway the judge. I can’t disagree more. No one is saying video poker is complete skill, but at what point does the game become enough skill that it can be deemed a game of skill for the purposes of the casino? It is quite interesting that many states are working on this issue right now to allow a whole new type of skill-based games.

I can take any two people in the world, sit them down at two slot machines set for identical paybacks and there is absolutely nothing either one can do to change their payback.

If I were to take someone who has never stepped foot in a casino, never heard of video poker and only knows the very basics about hand rankings for poker and put this person on a machine right next to mine (both machines with identical paytable) the likelihood this person can achieve a higher payback than me over time is near zero.

For a judge to rule I have no known skill over this novice is, well, insulting.

I’m very happy to hear the regulatory boards are clearly defining video poker as a game of skill. Maybe someday they’ll even stop classifying them as slot machines (I’m dreaming!)

So, what is the big deal about these new skill-based games if we have already had video poker for a couple of decades? Some of these skill-based games are not brain skill. They are a type of physical skill or at least create a virtual reality.

Imagine if a bonus round in a slot machine involved playing a video game that was not pure luck. Envision you have to play around of Space Invaders or PacMan in order to earn your bonus. How does one go about determining the payback of such a game?

Now, I assume even if they use these old-style arcade games, they will be modernized a bit. Anyone who played these games 20-40 years ago remembers many of them had patterns that could be followed to complete rounds. I knew some guys who could play several rounds of PacMan blindfolded and still complete the rounds.

Even if these games are updated to use more robust random algorithms, how does one measure the highest level of skill that can be achieved? What if the level used is so far beyond 99.9% of human skill that it results in the average human achieving a far lower payback? What if someone sets the payback to the average human and then finds out there is a 0.1% of people capable of beating the daylights out of the game due to superior skill?

Rain Man could count a blackjack shoe perfectly, but have no advantage in video poker over any other expert. What if there is a Rain Man-type of person who can play some other skill-based game so perfectly so as to beat the game regularly?

These are all questions the inventors of this new generation of games are going to have to wrangle with. I don’t know if I’ll be involved in the math aspect of any of these new games. Either way, I look forward to learning how these issues are resolved.

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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 [email protected].

About the Author

Elliot Frome

Elliot Frome’s roots run deep into gaming theory and analysis. His father, Lenny, was a pioneer in developing video poker strategy in the 1980s and is credited with raising its popularity to dizzying heights. Elliot is a second generation gaming author and analyst with nearly 20 years of programming experience.

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