What looks like a slot machine, has a payback percentage, and fills the slot machine section of the casino—even though it’s NOT a slot machine?

A video poker machine—that’s the answer to this riddle.

Better educated gamblers choose video poker over slot machines almost every time. This post looks at some of the reasons why by examining exactly what video poker is and how it works in detail.

It’s part of my ongoing blog post series about “what is gambling?

## The Differences between Video Poker and Slot Machines

I explain what slot machines are and how they work in some detail in that post. But briefly, here’s how a slot machine works:
You have 3 (or more) spinning reels.

Each of these has multiple symbols on them, and when certain combinations of symbols appear on a payline, it triggers a payout. You don’t know what the probability of getting a specific symbol on a stop is, though.

Combining the payouts along with the probabilities of getting those symbols results in understanding what the theoretical payback percentage for the game is.

If you could tell what the probability of getting a symbol is, you could calculate the house edge for the game.

I should point out that in all table games in a casino, the probabilities are easily calculated. You have 38 potential outcomes on a roulette wheel, so the probability of getting a specific number as a result is 1/38. You know how many sides each die has in craps, too.

Blackjack is played with a deck of 52 cards, and we know which cards are in those decks and how many there are.

Video poker is a gambling machine that looks like a slot machine and has some significant similarities to a slot machine. You still have a payline.

You’re still hoping for a combination of symbols along a payline. You’re still dealing with a game that pays off at X for Y instead of X to Y.

The big difference is that the random number generator on a video poker machine uses the same math for determining the probability of getting a specific card from its virtual deck as you’d see if you were using a real deck of cards.

This means that you have both pieces of data you need to calculate the house edge and the payback percentage for the game.
I think this is inherently fairer than the way casinos program and manage their slot machines.

I don’t think casinos should have to offer games without a house edge. They’re allowed to make money.

I just don’t think they should be allowed to offer games where you don’t know what kind of odds you’re up against.

They’ve passed laws in some jurisdictions in recent years requiring food manufacturers to post calorie and macronutrient counts on food packages and menus.

Why should casino games be different?

For now, though—choose video poker over slot machines.

## The Payback Percentage for Video Poker Is Almost Always Better than the Payback Percentage for Slot Machines

Even though we don’t know specific payback percentages for specific slot machine games, we do know what industry averages are for specific jurisdictions and denominations. Las Vegas probably offers the most competitive slot machines with the highest payback percentages, and those numbers hover around 92% or so.

That number goes down when you go down in denomination. It also goes down when you’re looking at less competitive areas. Casinos on the Strip in Las Vegas are heavily competitive with each other for your business.

Local bars, convenience stores, or airports are less competitive and focus less on offering competitive games. The payback percentages for these games might be as low as 75% to 88%.

When you compare those numbers with your average video poker game, you’ll be surprised at how much better video poker is mathematically.

The payback percentages for most video poker games—if you play with something resembling good strategy—starts at around 93% or 94% and goes up from there. If you look for the right games with the right pay tables, you can find video poker games where the payback percentage is 98% or 99%. That’s a huge difference.

If you think about that in terms of how much money you can expect to lose per hour on such a game, you might be shocked.

Video poker games and slot machine games both play at about the same average rate—600 hands per hour.

Most people play them for similar stakes, too. For purposes of comparing hourly loss rates, let’s just assume that you’re playing for \$5 per hand or \$5 per spin.

That’s \$3000 in hourly action.

If you’re facing a 25% house edge, you can expect to lose \$750 per hour. Against a 12% house edge, you can expect to lose \$360 per hour. Against an 8% house edge, you’re still looking at a projected hourly loss of \$240.

Now suppose you’re playing a fairly bad video poker game with a 6% house edge. Your expected loss is \$180. If you can find a much better game, you could get that edge down to 2%. That’s an hourly loss of \$60. Get that number down to 1%, and your hourly loss drops to \$30.

I don’t need to tell you the difference between \$30 and \$360, do I?

Are slot machines really 12 times as entertaining as video poker games?

I can’t imagine you think so, but maybe if you hate making decisions, or you hate the iconography associated with a deck of playing cards for some reason, you might still prefer slots over video poker.

But there’s more to talk about when discussing video poker than just its differences with slot machines.

Let me explain more clearly how video poker games work:

## How a Video Poker Game Works

The most basic type of video poker is the game that almost all video poker games are based on—Jacks or Better. If you play with optimal strategy and face the right kind of pay table, you’re looking at a game where the house edge is only 0.54%.

But how exactly does the game work?

As with a slot machine, you input money into the machine. This is converted into “credits” or “coins.” You then choose how many coins you want to wager on your first hand.

The strategy for this part is easy, by the way—you should always bet 5 coins. All video poker games allow you to bet 1, 2, 3, 4, or 5 coins.

But they also all offer a much higher top jackpot if you make the 5-coin bet. The difference in your house edge is significant when the biggest jackpot is reduced so significantly.

The top jackpot in a video poker game is the royal flush, and it pays off at 800 for 1 if you bet 5 coins. If you bet 4 coins or fewer, the payout is only 200 for 1 (or 250 for 1 on some machines). Either way, the hand doesn’t come up often, but when it does, it’s important to get paid off for it.

That’s how all the payouts are handled in video poker, by the way. They’re based on what kind of poker hand you wind up with. I’ll cover how poker works in a future post in this series, but I suspect most people are familiar with the difference between a flush and a straight already.

When you’ve placed your bet, the machine deals you a 5-card poker hand on your computer screen. You get to choose which cards you keep and which cards you throw away. After the machine replaces your discarded cards, it credits you with your winnings (if any) for the hand.

On most Jacks or Better games, you’ll probably see some kind of winning hand slightly less often than every other hand. But the lowest payout, for a pair of jacks, queens, kings, or aces, is only even money. In a table game, where you get paid X to Y, you’d profit one unit from such a win.

Video poker, on the other hand, pays off on an X for Y basis. The machine keeps your bet regardless of your win. So winning one unit is the equivalent of a push in a table game—you don’t win any money, but you don’t lose any money, either.

The payback percentage for the best possible version of Jacks or Better looks like this:

• Royal flush – 800 for 1
• Straight flush – 50 for 1
• 4 of a kind – 25 for 1
• Full house – 9 for 1
• Flush – 6 for 1
• Straight – 4 for 1
• 3 of a kind – 3 for 1
• 2 pairs – 2 for 1
• Pair of jacks or higher – 1 for 1

You calculate the payback percentage for a game like this by looking at the probability of getting each outcome and adding them all together.

For example, 21% of the time, you’ll get a 1 for 1 payoff. That’s worth 21% in payback percentage.
You’ll get a 2 for 1 payoff 12.9% of the time. That’s worth another 25.8% in payback percentage.
You’ll get a 3 for 1 payoff 7.4% of the time, which adds another 22.3% to the payback percentage.

This continues as the hands get harder to achieve and still increase in payouts.

These numbers also assume that you’re making the mathematically optimal play on every hand. I think that’s humanly impossible, but you can get close enough to not lose more than 1/10 of 1% in expectation.

That pay table is called a 9/6 Jacks or Better game, which is also known as a full pay Jacks or Better game. The 9 and the 6 in the name of that pay table come from the payout for the full house and the flush.

Not all Jacks or Better games offer this pay table. In fact, since this is the best pay table, MOST Jacks or Better games have lower payouts.

But they’re easy to spot, because video poker game designers like to lower the payout on just those 2 hands to create a better game for the house.

For example, it’s easy to find 8/5 and 7/5 Jacks or Better games. In these games, a full house pays off at 8 for 1 or 7 for 1, and a flush pays off at 5 for 1.

This reduces the payback percentage on those 2 games to 97.3% and 96.1%, respectively.

You’ll notice that even those payback percentages—which are dramatically lower than 99.54%–are far better than what you’d see playing almost any slot machine.

Also, if you know how to play Jacks or Better, you can figure out any other video poker game.

## The Variety of Video Poker Games Available

Most video poker games are variants of one kind of another of Jacks or Better. For example, Bonus Poker is just like Jacks or Better, but the pay table offers “bonus” payouts for a 4 of a kind depending on what rank the cards are in the 4 of a kind.

A hand with a 4 of a kind made up of aces has the best bonus payout—80 for 1 on most games. A 4 of a kind made up of 2s, 3s, or 4s, on the other hand, pays off at 40 for 1. Any other 4 of a kind pays off at 25 for 1. These machines play much like Jacks or Better, otherwise. The main difference is that payout.

However, you won’t find payouts of 9 for 1 and 6 for 1 or a full house and a flush on a Bonus Poker game, ever. They couldn’t maintain an edge for the house if they did that.

You can, though, find Bonus Poker games where you can get an 8 for 1 and a 5 for 1 payout on those 2 hands. The payback percentage on such a game is about 99.2%.

Bonus Poker encompasses a whole subset of video poker games, too. There’s Double Bonus, Double Double Bonus, and Triple Bonus. Double Bonus Poker just doubles the payouts for those 4 of a kind hands. Double Double Bonus includes bigger payouts based on what kind of kicker you have with your 4 of a kind.

Triple Bonus Poker adds in bonus payouts for 3 of a kind hands.

Offering those bonus payouts for various hands is only one way the video poker designers create different games, though. Another means they use for this is to add wild cards.

One of the most common ways to do this is to add a joker to the deck and treat it as a wild card. When you have a wild card, it can substitute for any card to make your hand into the best possible poker hand it can be. The most common version of this is called Joker Poker or Jokers Wild.

Another wild card game version of video poker is Deuces Wild. In this version of the game, all 2s are wild, regardless of their suit. With that many wild cards in play, the strength of the minimum hand needed for a payout goes way up.

## Video Poker Strategy Charts and Tables

If you’ve read my brilliant post about how blackjack works, you’re probably already familiar with the idea that the decisions you make in a card game can affect the payback percentage and the house edge.

For any given situation in blackjack or video poker, there’s one way to play that hand which can result in the highest expected value.

In blackjack, you have a strategy chart that compares your 2 cards with the dealer’s one face-up card and tells you what to do.

In video poker, though, the correct decision relates only to which cards you keep and which ones you discard. Since you have 5 cards and 2 ways to play each of them, you have 32 possible ways to play each hand. (That’s 2 to the 5th power for you math nerds.)

That might make video poker strategy sound overwhelming, but it’s actually easier than you might think.

Most video poker strategy charts and tables work as a hierarchical list. You start at the top and see if your hand matches any of the hands on the first land. If it doesn’t, you move to the next line.

You keep going until you get to a hand that matches yours. When you get there, you hold onto those cards and discard the rest.

None of these charts or tables offer you a perfect strategy, either. They all sacrifice at some point and to a varying degree a certain amount of expectation in exchange for playability.

I like Bob Dancer’s guides to video poker strategy, because I like the way he teaches the strategies. He also teaches you a basic strategy to start with and then explain how to move on to the more advanced strategies.

But you can find a printable strategy chart for almost any video poker variation and pay table just by doing a quick search of your favorite search engine. Some of these are more accurate than others, but they’re probably all better than just winging it.

## Advantage Play and Video Poker

It’s beyond the scope of this post to explain why and how you can get an advantage at those other activities.

But I can address how advantage players get an edge at video poker. In fact, you can find multiple ways of doing so.

One way is to play in video poker tournaments with generous prize structures. Many of the marketing people working for casinos don’t always understand how expected value works in a casino game, so they’ll sometimes accidentally put together a tournament as a promotion where you can get an edge over the casino.

Another way is to keep an eye on the progressive jackpot versions of video poker. Since the payback percentage for the game is a function of the paybacks for the various hands, if you have a game where the top jackpot grows constantly, you also have a game where the payback percentage grows constantly.

All you need to know is the break-even point for the game. Once the jackpot gets above that point, all you need to do is sit down and play with close to perfect strategy, and you’re gambling with an edge over the house.

And the higher the jackpot gets, the better your expectation becomes.

But the most common way to get an edge at video poker is to combine 3 things:

• 2. Generous slot club membership
• 3. Slot club promotions

If the pay table isn’t good enough, you can’t use this strategy, because no casino offers rebates big enough to compensate for a lousy pay table.

Most slot club memberships offer a similar rebate structure, though—you get back 0.2% of your action in the form of comps and rebates. You can add this amount to the payback percentage for the machine to get a more accurate idea of the machine’s real payback.

On most video poker games, 0.2% still isn’t enough to get you an edge.

But most casinos offer occasional time periods where you get double or triple rewards for playing. With a comp rate of 0.4% or 0.6%, you’re coming pretty close to playing a positive expectation game.

## Conclusion

Video poker is a thinking person’s slot machine game. It offers you the opportunity to combine some strategy with some luck and get an edge over the casino. I’m a fan of fair play, which doesn’t mean I think the casino ought to offer games that are break-even.

It just means that I should have all the information I need to make an educated decision about which game I’m going to play.
Video poker offers me that, but slot machines don’t.

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