When is the payback percentage prohibitive?

Aug 25, 2009 5:07 PM
Winning Strategies by Elliot Frome |

A common question I receive via e-mail is about whether some particular game, machine or sidebet is worth playing. I never really know how to answer that question.

On the surface, I’m being asked about the payback of the game, I assume. If a game has a payback of 95%, is it worth playing? But if this were the only factor in whether a game should be played, everyone would be waiting in a long line to play the one and only game with the highest payback in the casino (probably a Deuces Wild video poker).

There is no magical line at which a game becomes worthy of being played. Then again, maybe there is. This line is really at the 100% mark. This means that if payback was the ONLY factor in deciding if a game was worthy of being played, the reality is that there would be almost no gambling going on inside a casino.

As I’ve discussed before, the difference between a game that pays back 99.99% and 100.01% is going to be difficult for a player to discern between. Yet, technically, if one were to play enough hands, and wager enough money, he will begin to realize that in the first situation he is likely losing and in the latter situation he is likely winning.

Any game that has a payback of under 100% is a losing proposition in the long run. This doesn’t mean you can’t win in short sessions. Most casino games (base games) have a win frequency for the player of about 40-45% in a three-hour session. Sidebets with their lower payback might only be in the 30-35% range.

Contrary to what some people might like you to believe, most people do not gamble to win, they gamble for fun with a hope that they can win.

So, this means there are really at least TWO elements to consider when you decide if a game is worth playing. The first is whether or not it is fun. That’s a subjective call. What is fun to me, might be an awful experience for you, and vice versa.

I find playing Pai Gow poker fun for about 10 minutes. Then, after countless pushes, I get bored silly. It is a very low volatility game which you can play for hours with a very small bankroll. It makes playing blackjack downright exciting.

Yet, there are obviously more than enough people to fill countless Pai Gow tables who apparently love the game. Maybe they like the idea of playing for a long time on a small bankroll.

The second element is the chance to win. If I were to create a sidebet for blackjack in which you win only when both of your cards are identical AND are identical to both of the dealer’s cards, I’m sure I could give it a payout that would make the payback a nice 98%.

The odds of hitting this is over 300,000 to 1, however, and this means maybe once a year someone will win. They might win $330,000 for a $1 wager, but as everyone else is going to lose (and lose big), this game might not go over too well.

A lot of sidebets are created to add some volatility to otherwise slow moving games. They give the player the opportunity to win big even while playing a base game that doesn’t really give the chance for one big hand.

This reward is what makes the risk worth taking and the game worth playing. However, a happy balance has to be struck so that the player feels like he has a realistic shot at winning.

So, is some game worth playing? I really can’t answer that question.

Obviously, the lower the payback, the more likely the answer is no. State lotteries tend to have paybacks in the 50% range, but that doesn’t stop many of us from occasionally throwing down a dollar or two, hoping to win millions.

So, it can’t all be about payback. You have to ask yourself if you’re having fun while playing it. The odds are if you’re losing your shirt, you’re not having any fun.

On the other hand, if you’re losing a little but getting entertainment value for it, you might just consider it to be worth your money and time.

Question? Comment? E-mail me at: Elliot Frome