The high cost of big jackpots

2 January 2016

By Jerry Stickman

When it comes to video poker there is a “Heinz 57” variety of games available. There are the basic low-variance Jacks or Better varieties. These games offer only one jackpot, the royal flush. In return, the bankroll swings are pretty tame. Deuces wild games offer two jackpots, the royal flush and four deuces. The cost for the extra jackpot is some additional variance.

There are the higher variance “Bonus” games such as Bonus Poker, Bonus Poker Deluxe, Double Bonus Poker, Double-Double Bonus and Bonus Deuces Wild. These games increase pays for four-of-a-kind hands. Of course, this increases the variance even more.

Then there are the “extreme” bonus games such as Triple Bonus Poker, Triple Bonus Plus, Triple Double Bonus, Triple Deuces, and Triple Double Deuces. These games offer multiple high jackpots with some of them matching the pay for a royal flush. The variance of these games can become astronomical.

There are also progressive games that can push the pay for a royal to stratospheric levels. As the royal jackpot climbs, so does the variance.

Any of the games mentioned above can have very good returns of 99% or more. The difference is the variance (bankroll swings). When the variance is higher, the returns are lower until a jackpot is hit.

Thrill-seekers enjoy playing the high jackpot games and tend to ignore the variance. They are content to blow through a bankroll in the pursuit of a big payoff.

More conservative players would rather play for a longer period of time on a given bankroll and are willing to forego some huge jackpots in return.

Neither way is right or wrong. They are simply preferred ways to handle the bankroll.

Let’s take a look at how much several video poker games cost players between jackpots. This should give a good indication of what to expect while playing those games. Let’s first look at the Jacks or Better game.

The full-pay (9/6 – 9-for-1 for a full house and 6-for-1 for a flush) version of this game returns 99.54% with expert play. The variance is 19.5. There is really only one jackpot, the royal flush. The straight flush also offers a decent payoff, though not really a jackpot.

Including the royal flush, an expert player will lose 46 cents per $100 on average. The royal makes up 1.98% of the return, so for the period between royals (about 40,000 hands on average) the expert player will lose $2.44 for every $100 run through the game.

The straight flush is the next highest paying and contributes 55 cents per $100 played. It occurs about every 9,000 hands on average, so for the period between straight flushes and royals, the expert player will lose $2.99 per $100 played. This is not too bad and a $100 bankroll should last a while on quarter machines. Keep in mind that there will be periods of sustained losses and also periods where the net result is a win, but on average $2.99 will be lost per $100 played without hitting a royal or straight flush.

Full-pay Double Bonus poker returns 100.17%, but since these games are extremely rare, we will look at the more common 9/7 (9-for-1 for a full house and 7-for-1 for a flush). This game returns 99.11% with expert play with a variance of 28.5. The high-paying hands include the royal, straight flush, four aces and four 2s, 3s, and 4s.

The royal contributes 1.67%, the straight flush .57%, four aces 3.50% and four 2s, 3s, and 4s contribute 4.19%. Including all the payoffs, the expert player will lose 89 cents per $100 played. For the roughly 48,000 hands between royals, the expert player will lose $2.56 per $100, on average. In the approximately 8,800 hands between straight flushes, the losses per $100 increase to $3.13 per $100. In the nearly 4,600 hands between four aces, losses increase to $6.63 per $100. Include the periods without four 2s, 3s, and 4s (about 1,900 hands) and the losses rise to $10.82 per $100.

This is significantly more than Jacks or Better. On a quarter machine this rate of loss will cause the $100 to be depleted after about 700 hands. It will take $260 to sustain the period where none of the large payoffs are hit.

Full-pay (9/6) Double-Double Bonus returns 98.98% with a variance of 42.0. The high paying hands are the royal flush, straight flush, four aces with a kicker of 2 through 4, four 2s-4s with a kicker of ace through 4, four aces and four 2s through 4s.

The royal contributes 1.96 percent, straight flush .55%, four aces with a kicker 2.46%, four 2s through 4s with a kicker 2.29%, four aces 2.78%, and four 2s through 4s 3.08%.

With expert play and counting all pays the expected loss is $1.02 per $100 played. For the 40,800 hands between royals the los climbs to $2.98 per $100. For the 16,200 hands between four aces with a kicker the loss will be $5.44 per $100. For the 9,100 hands between straight flushes, the loss is $5.99 per $100. Add in the 7,000 hands between four 2s through 4s with a kicker and the loss becomes $8.28 per $100.

During the 5,800 hands between four aces the loss rises to $11.06 per $100. And, finally, during the 2,700 hands between four 2s through 4s the loss climbs to $14.14 per $100.

This is a significant amount. More than one-seventh of the bankroll is lost during the times where there is no “big win.”

These numbers show clearly the impact of variance on the bankroll.

Now let’s look at a very volatile game – Triple Double Bonus. The full-pay version returns 99.58 with expert play but has a variance of 98.3. The high-paying hands are the royal flush, straight flush, four aces with a kicker of 2 through 4, four 2s through 4s with a kicker of ace through 4, four aces, and four 2s through 4s.

The royal contributes 1.76%, straight flush .59%, four aces with a kicker 5.63%, four 2s through 4s with a kicker 6.9%, four aces 2.37%, and four 2s through 4s 2.56%.

With expert play and all pays included, the expected loss is 42 cents per $100. During the no royal cycle of 45,000 hands, the loss increases to $2.18 per $100 played.

For the 14,000 hands between four aces with a kicker the loss rises to $7.81 per $100. For the 8,500 hands between straight flushes the loss increases to $8.40 per $100. During the 6,700 hands between four aces the loss climbs to $10.77 per $100. For the 5,800 hands without four 2s through 4s with a kicker the loss increases to $17.67 per $100. Add in the losses during a four 2s through 4s drought of 3,100 hands and the total loss becomes $20.23 per $100.

For about 3,000 hands on average, the expert player of this game will lose $1 for every $5 run through the game. To play a game that has this many big pays definitely requires a decent bankroll.

As the numbers above show, the higher the big payoffs, the higher the variance. The higher the variance the higher the losses during a non-big-payoff cycle.

Many people simply love the big payoff games. They enjoy the thrill of hitting a jackpot. They are willing to burn through some bankroll in pursuit of that big pay. That is fine. If a high return game has a high variance, by all means play it if that is what you want. Just make sure you are ready for the sometimes brutal drawdown of your bankroll that can and will happen.

May all your wins be swift and large and all your losses slow and small.

Jerry “Stickman” is an expert in craps, blackjack, video poker and advantage slot machine play. He authored the video poker section of "Everything Casino Poker: Get the Edge at Video Poker, Texas Hold'em, Omaha Hi-Lo, and Pai Gow Poker!" You can contact Jerry “Stickman” at stickmanjerry@aol.com