Video Poker Cost Per Hour

January 31, 2008

Video Poker Expectation

I started thinking about writing a "video poker cost per hour" article after reading a lengthy thread on the vpFREE discussion group (where Jean Scott, the Frugal Gambler, posts) about the "VP Mensa Myth" living on. The first post in the thread is from a poster named "Grumpy", who relates a story of how an intelligent fellow video poker player at the Borgata in Atlantic City was playing a $1 9/6 Jacks or Better game but was only playing $1 per hand. (The max coin bet on a Jacks or Better game is five coins, so in this case it would have been $5 per hand.)

Grumpy, of course, asked the video poker player why he wasn't playing the max coin bet, and the player explained that he'd read a book by a Mensan which explained that if you're playing a negative expectation video poker game, you might as well play one coin at a time, because in the long run you'll lose all your money anyway. The return isn't as good playing one coin at a time, because you're not eligible for the increased payoff on the royal flush. But the point of the Mensa book is that if you're going to lose anyway, you should lose your money as slowly as possible so that you'll get more entertainment for your money.

Calculating Video Poker Cost Per Hour

The "video poker cost per hour" is calculated by multiplying the amount of each bet times the number of bets you make per hour multiplied by your expected loss per bet. If you're playing full coin on a $1 9/6 Jacks or Better game, your expected loss per hour looks like this:

$5 per bet X 0.46% X 500 bets per hour = $11.50/hour

This is an average cost per hour (It can also be called the "video poker expectation), and it presupposes that you'll hit that royal flush jackpot too. In real life, at most sessions, you won't hit the jackpot, so your average loss per hour might actually be higher than that. During a session where you hit a jackpot, you probably won't lose any money that session, because you'll have won so much on the jackpot. Your cost per hour during that session is actually a profit per hour. The point is that the number given according to that formula is an average over time.

Your average cost per hour can be lowered in several ways:

• You can play fewer hands per hour. (500 is a lot of hands per hour anyway.) If you play only 400 hands per hour instead of 500 hands per hour, your theoretical cost per hour goes down $2.30/hour to $9.20/hour.

• You can take advantage of the slots club. They give back between 0.1% and 0.3% of what you wager in comps, so that reduces your theoretical cost per hour by another $2-5/hour or so.

• You can take advantage of the free drinks provided by the hotel. If you have a taste for premium beer, you can drink a Heineken every hour or so. If you assume a Heineken is worth $2, that reduces your video poker cost per hour even more.

If you combine all three of those techniques, your theoretical cost per hour can become as low as $5/hour or so.

The Difference Between Max Coin and 1-4 Coin Play

Back to the discussion of whether or not the cost per hour goes down by reducing your bet size. If the expected loss were the same, and you reduced the average bet size, then obviously the theoretical cost per hour would go down. But the house edge on Jacks or Better goes way up when you play less than the max bet. The house edge on a 9/6 game when playing the max bet is 0.46%. But when you're playing less than the max bet, the house edge goes up to 1.63%.

Knowing this, you can recalculate the theoretical cost per hour for 1 coin play versus 5 coin play:

$1 per bet X 1.63% X 500 bets per hour = $8.15/hour

So yes, even though the house edge almost triples, reducing your bet size reduces your theoretical loss per hour by $3.35 per hour.

What Should Be Done?

"Grumpy", the poster at vpFREE, thinks that anyone who can convince someone that accepting a higher house edge in exchange for a lower theoretical cost per hour really is a genius. He thinks that everyone should play max coins all the time to minimize the house edge. I guess the theoretical cost of playing per hour over time shouldn't be a consideration.

I can see reasons for wanting to play only the max coins. Part of the fun of playing video poker (or any kind of game with a jackpot) is the possibility of hitting a big jackpot. By not playing max coins, you eliminate that part of the fun. That's a perfectly valid argument for playing max coins even though it might cost you a little bit more per hour over the long run.

Another consideration is the amount of money you can get back in comps from the slots club. Playing 5 coins per bet means you're putting $2500 in action per hour. That earns you 0.2% from the slot club, or $5/hour. But if you're only playing 1 coin per bet, you're putting $500 in action per hour, and you're only getting back $1/hour in comps.

When you take the comps into consideration in this situation, your hourly cost for full coin 9/6 Jacks or Better becomes $6.50 per hour. In a one coin situation, your cost per hour is $7.15 per hour. (I subtracted the $5/hour from the slot club comps on the full bet and the $1/hour from the slot club comps on the short bet.)

So the conclusion is simple. If you're a member of the slots club, you should play the max bet on 9/6 Jacks or Better in order to minimize your theoretical hourly cost of playing. If you're not a member of the slots club, playing single coin might make sense in order to minimize the cost of playing.

But only if you're willing to give up the fun  of hitting a jackpot on the royal flush. And I would question anyone's decision to play a negative expectation game for any other reason than fun.

More Considerations Related to VideoPoker Expectation

The house edge on full coin Jacks or Better is 0.46%, and that's based on playing with perfect strategy. The house edge on the short coin Jacks or Better game is 1.63%, which also assumes perfect strategy. But who's memorized perfect strategy for short coin Jacks or Better? The strategy obviously has to be a little bit different, and since no one publishes such a strategy, you should assume that the player is going to give up some more edge because his strategy is incorrect. This could easily make up for any savings to theoretical loss per hour.

Another consideration is looking at your goals. If your entire goal is to minimize your theoretical losses per hour, why not find a penny slot machine and play a single penny at a time. Even if the house edge is 25%on the penny slot, your theoretical loss per hour is very low indeed:

$0.01 per bet X 25% X 500 spins per hour = $1.25/hour

The only reason I can think of to play a penny slot machine a penny at a time is to just while away your time. I can't imagine it would be as fun as trying to hit a royal flush on a Jacks or Better machine. And you can forget about earning any kind of comps at this rate.

You might not even be able to get any free drinks.

By the way, that thread over at vpFREE had me thinking about some other things, and I wrote about them here: Video Poker Advantage Players. You might also enjoying reading about the New IGT Video Poker Games or about Video Poker Tournaments at the Venetian.

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