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Making money with cashback

26 October 2013

An astute reader sent me this e-mail.

“Most of the video poker games have an expected return (ER) of less than 100 percent. So how can you become a winner when the house has the edge over you when you play?”

This reader is correct when he says that most of the video poker games nowadays have an ER that is less than 100 percent. Let’s take the example of 9/6 Jacks or Better (JOB), which has an ER of 99.54 percent (assumes you play every hand perfectly).

When a video poker game has a 99.54 percent ER, then the house has a 0.46 percent edge over the player (100.00 percent minus 99.54 percent). This means players will lose 0.46 percent of their coin in (the latter is the sum of all the money wagered, regardless of whether it wins or losses). So how can a player come out ahead if he is facing roughly a half-percent house edge? The answer is cashback.

I’ll give you a real-world example of how this works. A casino I frequent offers 9/6 JOB and their cashback rate is 0.13 percent. The latter means I’ll get back 0.13 percent times the amount of my coin in. Therefore, for a specific amount of coin in, I can theoretically expect to get back 99.54 percent of what I bet plus an additional 0.13 percent of my coin in in cashback (or free play, which is the same as cash). The latter is a sure thing. I know at the end of the day I’ll get 0.13 percent times my coin in regardless if I won or lost playing the game. Therefore, my overall return is the sum of 99.54 percent and 0.13 percent, which is 99.67 percent. I’ve boosted my return playing 9/6 JOB from 99.54 percent to 99.67 percent by using my player’s card and taking advantage of the casinos cashback (or free play).

Even though a 99.67 percent overall return is better than 99.54 percent, I’d still wind up losing money in the long haul because my overall return is below 100 percent. My goal is to play only when I can get my overall return greater than 100 percent. How can I do this in this example? By taking advantage of casino promotions.

In the above example, on specific days of the week this casino offers multiple-point promotions (or sometimes called bonus points). Once you earn a specific number of points from playing video poker, you are eligible to play a kiosk game in which all the points you earn for that day are multiplied from 4 to 12. This means instead of getting the normal 0.13 percent cashback, I have a chance of getting 4 to 12 times more (i.e., from 0.52 percent to 1.56 percent) for all the points that I earned playing during the day.

There is no skill involved in playing the kiosk game and the multiplier you earn is random (i.e., sometimes I’ve gotten 4 times, and other times 12 times). Now let’s do some simple math to see how this works.

Let’s assume I only get the 4-times multiplier. This boosts my cashback to 0.52 percent. If I add the cashback return (0.52 percent) to the return on the game (99.54 percent), my overall return is 100.06 percent. This means I have a 0.06 percent edge. Granted, that’s not a big edge, but nevertheless, in the long run, I’ll win slightly more than I lose if I always take advantage of this promotion.

Suppose I get lucky and get the 12-times multiplier on the kiosk game (which has happened a few times). Now my overall return would be 99.54 percent plus 1.56 percent or 101.1 percent. That’s a nice 1.1 percent edge over the casino.

The key to getting the overall edge to over 100% when you play video poker is to play a game that has close to a 100 percent return and then schedule your play time when a casino has a multiple-point (or bonus points) promotion (this is important). For example, the two video poker games that I frequently play are 9/6 JOB and NSU Deuces Wild. The ER for these games is 99.54 percent and 99.73 percent respectively. My first preference is to play NSU because it has a slightly higher return but this game is not always available in all casinos. When NSU is not available, my fall back game is 9/6 JOB.

Some casinos don’t have kiosk games; instead, they might just specify a certain day where all the points you earn are multiplied by a specific amount (known as multiple-point promotions). For example, one local casino in Las Vegas is currently giving video poker players 7-times points on Sundays. Their normal cashback rate is 0.10%. With the 7-times promotion, the cashback rate jumps to 0.7 percent. The inventory of their best video poker games include:

9/6 JOB Super Times Pay (99.82 percent)
DBDW (99.81 percent)
NSU (99.73 percent)

Playing any of the above games with perfect strategy on Sundays with 7-times points (i.e., 0.7 percent cashback) would give a player an overall return that exceeds 100%.

You can boost your overall return even more by taking advantage of the bounce back coupons that you will receive in your mailings from the casinos that you frequent. Bounce back means you have to “bounce back” (or return) to the casino in order get the cash (or free play). (For example, I get \$100 per week from one casino in free play. The amount of your bounce back will depend on your level of play.) Calculating the return from bounce back is tricky and in a future article I’ll give you tips on how to do it. (Bounce back can be lucrative, as much as 0.5 percent to 1 percent or more each month. For now, consider the bounce back as icing on the cake to your overall return.)

Henry Tamburin is a blackjack and video poker expert. He is the host of the smartgaming.com website and the editor of the Blackjack Insider newsletter. Visit his web site at www.smartgaming.com.
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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

Books by Henry Tamburin:

Winning Baccarat Strategies