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# Calculating the expected return of cashback offers

10 December 2010

There are two components to your overall return as a successful video poker player. The first is the expected return (or ER) of the base video poker game that you are playing and the second is the ER of the cashback (and bounce-back cash) offers that the casino will give you for playing. By adding up these two components, you will be able to calculate what your overall ER will be. Your goal should be to get the overall ER close to or over 100 percent and I will show you how to do it.

Here is an example. Suppose you want to play NSU Deuces Wild. The ER for this base game is 99.73 percent, which means a player playing this game with computer-perfect playing strategy can expect to lose about three tenths of a percent of all the money wagered in the long run. If there was no other way to boost the ER of the game, a player will eventually end up a loser (because the ER is less than 100 percent). However, you can get the ER of the game to greater than 100 percent by taking advantage of the ER of the cashback and bounce-back cash offers. In order to do this, however, you need to know how to compute the ER's of these casino benefits.

The ER of a cashback offer is simply the ratio (or percentage) of the amount of cash the casino gives you over the coin-in. For example, if a casino gives you \$3 in cash for every \$1,000 of coin-in, the ER is 0.3 percent. Here is how you would arrive at the ER using a calculator.

1. Divide 3 by 1000 ... answer is 0.003.
2. Multiply 0.003 by 100 ... answer is 0.3 (in percent).

Here is a tip to make the calculation even easier: after you divide the cashback by the coin-in, move the decimal place in the result two places to the right to arrive at the ER in percent.

Once you know the ER of the cashback offer, you can add it to the ER of the base game to arrive at your overall ER. Therefore, if you were to play, say, a NSU Deuces Wild game, your overall ER with the 0.3 percent cashback would be 100.03 percent (99.73 percent + 0.3 percent = 100.03 percent). Easy enough?

Unfortunately, some casinos will complicate things by only advertising how many points you need to get a specific amount of cashback. For example, some video poker players at the IP Casino in Biloxi, MS will get \$5 in cashback for every 100 points earned on their Player's Reward Card (other players will receive \$5 in free play). It takes \$20 of coin-in at video poker to generate 1 point so the ER is calculated as follows:

1. Determine how much coin-in it will take to earn the \$1 in cashback (or free play). To arrive at this figure, multiply the amount of coin-in required to earn 1 point (\$20) by the number of points you need to earn \$1 in cash (100 points). If you multiply these two figures, your answer is \$2,000 coin-in. In other words, you need \$2,000 in coin-in on a video poker machine to earn \$5 in cashback.
2. To determine the ER of the cashback, simply divide the cashback (\$5) by the coin-in (\$2000) and then multiply the result by 100 (or move 2 decimal places to the right). The result is 0.25 percent (or 0.25 percent ER).

Now let us suppose you play a 9/6 Jacks-or-Better game at IP with an ER of 99.54 percent. If you add in the 0.25 percent cashback (or free play) that will receive from the Player's Club, you can increase your overall return to 99.79 percent.

To further boost the EV of any game, you should take advantage of a casino's multiple-point promotions and their bounce-back cash offer in their mailers. For example, suppose a casino offers 2x points on certain days of the week (or month). When you play video poker during these 2x point promotions, your ER for the Player's Club cashback (or free play) will double.

Getting mailers from a casino is also another way to boost your overall ER. Most casinos have different Player Club tiers (or levels) and each tier is determined by a player's coin-in (sometimes it is based on the amount of coin-in over a month, other times it's based on a daily average ... I'll have more to say about this in a future column). Each tier gets a different mailer and obviously the greater the coin-in or daily average, the more lucrative will be your mailer including the bounce-back coupons for cash (or sometimes free-play).

In order to determine the ER of the bounce-back cash offer, simply divide the amount of cash (or free play) you will receive over a month by the amount of coin-in required to achieve that level.

Of course, no two casinos are identical when it comes to the base games they offer, the amount of their cashback and bounce-back cash. This is why it is important that you be able to evaluate these casino benefits to determine your overall ER for playing. If you happen to be math challenged, you can always go to the excellent site www.vpfree2.com where they summarize the cashback ER for casinos in different regions of the U.S. (just click on the name of the casino and then click on Player's Club). Likewise, you will find a detailed cashback comparison chart for Las Vegas casinos on the Viva Las Vegas page at www.advantageplayer.com. Keep in mind that casinos often change their requirements for the different levels of their slot clubs and also how much coin-in you need to receive a specific amount of cashback (and bounce-back cash). This is even more reason to consult the above websites to stay abreast of changes.

Also, remember that a game's ER is a theoretical return assuming you play your hands computer perfect. That seems like a tall task for ordinary players to achieve but it actually is achievable and in future columns I will show you how to do this.

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Henry Tamburin

Henry Tamburin is the author of the best-selling book, Blackjack: Take The Money and Run, editor of the Blackjack Insider e-Newsletter, and Lead Instructor for the Golden Touch Blackjack course. For a free 3-month subscription to his blackjack newsletter with full membership privileges, visit www.bjinsider.com/free. For details on the Golden Touch Blackjack course visit www.goldentouchblackjack.com or call 866/WIN-BJ21. For a free copy of his casino gambling catalog featuring over 50 products call 888/353-3234 or visit the Internet store at www.smartgaming.com.

#### Henry Tamburin Websites:

www.smartgaming.com

#### Books by Henry Tamburin:

Henry Tamburin
Henry Tamburin is the author of the best-selling book, Blackjack: Take The Money and Run, editor of the Blackjack Insider e-Newsletter, and Lead Instructor for the Golden Touch Blackjack course. For a free 3-month subscription to his blackjack newsletter with full membership privileges, visit www.bjinsider.com/free. For details on the Golden Touch Blackjack course visit www.goldentouchblackjack.com or call 866/WIN-BJ21. For a free copy of his casino gambling catalog featuring over 50 products call 888/353-3234 or visit the Internet store at www.smartgaming.com.

#### Henry Tamburin Websites:

www.smartgaming.com