Surviving the swings

Jun 25, 2007 2:58 AM

Last week, I discussed the concept of volatility and how different games with identical paybacks can offer vastly different experiences because of it. By itself, volatility is neither good nor bad, which is why it falls into the category of knowing what to expect within expert strategy.

As I described last week, the higher the volatility, the bigger the bankroll you are going to have to start with in order to ride out the cold streaks. As long as you are prepared for this, can stomach the ups and downs and have the discipline to stop when you’re in a hot streak (or have completed a hot streak), volatile games can be quite profitable.

As a result of their streakiness, these games can also sometimes have lower paybacks. Because the ups and downs are so pronounced, players may feel like the paybacks are actually higher because at some point in a session, there is a good chance that the player had a significant profit.

Since more often than not, players set their goal by number of hours instead of profit, the pendulum quickly swings the other way, leaving the player in the hole.

However, that short time with the large stack of chips makes the player come back for more. Unfortunately, with the payback lower on some of these games, only a disciplined player who is willing to walk away with the profits in hand, even if amassed in a short time will truly profit from the experience.

Of course, this is not to say that you change the long-term payback of the game via a form of ”˜hit and run’ at the machine. In the end, absolutely NOTHING can change the theoretical payback of your lifetime experience of playing. It doesn’t matter if you play 24 1-hour sessions, eight 3-hour sessions or one 24-hour session (not including a fatigue factor).

In the end, you’ll do as well as the cards you are dealt and the strategy you use to play them will allow. If your first hand is four Aces and you’re playing Double Double Bonus, and you have the discipline to stop after eight seconds of play, THEN you’ll change your expected payback because you will have stopped playing after the one significant winning hand.

I’ve digressed a bit from the topic at hand. The popular variations of video poker help to prove my point. I don’t know if there is a more discriminating group of players than video poker players.

For 15 years or so, starting with my father, Lenny Frome, and continuing to the variety of writers today, video poker players have been taught to seek out the best paying paytables. Not only is the payback of EVERY video poker machine known to the knowledgeable player, but the casinos have been generous enough to make the paybacks quite, well”¦generous!

After all, even if the casinos were kind enough to put the payback on every slot machine, I still wouldn’t suggest anyone play one when the majority of the paybacks are going to be in the low 90% range!

The original jacks or better version of video poker has very low volatility (as far as video poker goes). You can play for a very long time on a moderate bankroll and may play very close to even for a long time.

As a result, barring the Royal, it may also be very difficult to win a significant amount of money in a session. You may even be winning for the majority of a session, but barely feel like you are. After all, you didn’t travel all the way to Las Vegas to leave up five coins!

But, that is the nature of this version. With its 99.5+% payback, you’ve got a good chance to win in any given session. You’re just not going to win much most of the time. Since, the payback is below 100%, however, the longer you play, the more likely you will lose, but very very slowly.

On the flip side, there is Double Double Bonus Poker, the high-speed roller coaster of video poker machines, with its much higher volatility. Catch a big four of a kind and you can wind up with a pile of money. Have the machine go a little cold and you could drop a bundle in a hurry.

With a payback of 98.8%, it is a far worse bet than jacks or better in the long run. Yet, people LOVE to play Double Double. The adrenaline rush of the higher volatility is worth it for many players to give up the extra payback. They’d rather play knowing they are likely going to lose in the long run for the bigger chance at a big payout.

I know I’ve quoted my mother before in this column, using her favorite expression ”˜everything in moderation’. I guess, in this case, that means its okay to play Double Double. But, if you hit that four aces on the first hand (or early in your session), take your winnings and go play jacks or better on the casino’s dollar. If you hit the big payout deeper into your session, go have a good meal on the casino.

That higher volatility simply means that what went up quickly is going to come down just as quickly — unless you walk away before it has a chance to.