Not long ago my buddy Patrick went to Las Vegas. He spent a lot of time playing blackjack, but he got bored and wanted to try something different, so he switched to video poker. (He’s a regular reader of my columns here, so he knew it was a game with a low house edge.)

He played a dollar machine for max coin every time, so he was betting $5 per hand. He was also playing a multi-hand machine, so he was playing 5 hands at a time, which meant every time he hit the “deal” button, he was putting $25 into action.

He sat down with $1000, but he burned through it much faster than he expected. He told me that he was mad at me for recommending video poker to him at all.

He might have made a couple of mistakes, though.

Below, I’m going to explain why he lost so much money so fast playing video poker, especially when you contrasted that with how he was doing at the blackjack table.

The Concept of Volatility in Gambling Games

To understand why he was losing money so fast at the video poker games, you need to start with a rudimentary understanding of how the math works with gambling. Don’t worry. It’s not that hard.

The first thing to understand is that all casino games have a mathematical edge over the player. If they didn’t, the casinos wouldn’t stay in business. This includes both blackjack and video poker, as well as any other game (craps, roulette, or slot machines) you might want to play in a casino.

That mathematical edge is quantified as a percentage. It represents the amount of each bet that you’re mathematically expected to lose on average over time. If you’re betting $100 per hand, and the house edge on a game is 1%, the casino expects you to average a loss of $1 every time you bet.

But only over the long run.

In the short run, anything can happen.

Volatility refers to how likely it is to deviate from that average over time. With all gambling games, you’ll see a deviation from the mathematical expectation.

But with some casino games, that deviation is larger than with others.

Let’s compare to hypothetical casino games.


In one game, you’re betting $100 per hand, and you have a roughly 47% chance of winning each bet. The house edge on that game is a little over 5%. The volatility is low, though, because of the even money payouts that happen almost half the time.

In the 2nd game, you’re still betting $100 per hand, but you only have a 5% chance of winning each bet. But when you do win a bet, your payout is $1900 instead of $100. This game clearly has an edge, too, but it’s also a game where your bankroll will take bigger swings.

After all, on average, 19 times out of 20, you’ll win nothing. But once out of every 20 bets, you’ll win $1900. Of course, the house edge on this hypothetical game is also right around 5%.

Differences in Blackjack and Video Poker

Now think for a minute about how this applies to the games of blackjack and video poker. I’d like to point out a couple of things:

The first is that blackjack pays bets off on an “x to y” format. If you bet $5 on a hand of blackjack and win, you get your original bet back plus $5 in winnings. (You might get 3 to 2 if you get a natural, but it means the same thing—you get your original bet back plus $7.50 in winnings.)

The “to” in the payout odds refers to you getting your original bet back.

Video poker, on the other hand, is just like a slot machine. It pays off on an “x for y” basis. This means that you lose your original bet as soon as it’s placed. Any winnings you get is exchanged “for” your original bet.

The most popular type of video poker, in fact, is Jacks or Better, and the most common winning hand you’ll see is a pair of jacks or better. (That’s where the game gets its name.) The payoff for this hand is 1 for 1.

This means that you’ve already sacrificed the $1. If you get a pair of jacks or better, then you’ll get that $1 back.

That’s a big difference from a game where you get paid off even money at “1 to 1” odds.

This has what should be an obvious effect on the volatility of the game.

The other thing I’d like to point out is that blackjack is a game where most of the time, you’re looking at even money payouts or something close to even money. If you get a blackjack, the hand pays off at 3 to 2. Those are the best possible odds you can hope for, in fact.

Sure, there are situations where you can get more money into action. You can double down or split hands.

But that doesn’t change the payout ratios.

You’ll win more money in those situations when you come out ahead of the dealer, but when you lose, you’ll also lose more money.

In video poker, though, the prize amounts vary based on how unlikely it is that you’ll hit your hand. If you’re playing with optimal strategy, you’ll only win something 46% of the time. The other 54% of the time, you’ll win nothing.

But let’s look at how much you’ll win when you DO win that 46% of the time.

  • 21% of the time, you’ll get that pair of jacks or better. Since that’s an even money payout, you’re only getting your original bet back. No profits.

    So 2/3 of the time, you’re either losing money or just getting your initial bet back with no winnings.

    You’re only showing a profit 1/3 of the time.

  • And the hands that do pay off even more money come up even less often. 2 pairs pays off at 2 for 1, which means you wind up with a profit of 1 unit.

    But you’ll only see 2 pairs on 13% of your hands, or about 1/8 of the time.

  • 3 of a kind pays off at 3 to 1, but that only comes up 7% of the time, which is closer to once every 16 hands.

    Of course, no one plays Jacks or Better for the chance to win 3 for 1 on their money. Everyone plays Jacks or Better for the jackpot—the royal flush.

    This hand pays off at 800 for 1, but it only comes up once every 40,000 hands on average. Since that’s a significant part of your payback percentage, it increases the volatility of the game even further.

You should be starting to get an idea for why you might be losing money faster at video poker than blackjack now, even though the house edge might be about the same.

But there’s more:

Rate of Play Matters More than You Might Think

My buddy was playing $25 per hand at the blackjack table, and when he switched to Jacks or Better, he stuck with the $25 average bet size—even though he spread it out over 5 hands on a multi-hand video poker game.

Even with what I’ve explained about volatility, that doesn’t explain why he seemed to be losing so much money so much faster playing video poker.

The difference is the number of bets he was making per hour.

For the sake of simplicity, I’ll just assume that both the blackjack game and the Jacks or Better game are operating with a 0.5% house edge. That’s a good game of blackjack or Jacks or Better, either one, and it’s within a few hundredths of a percent correct.

When you’re playing blackjack, you’re usually at a table with at least 2 other people. This means you’re probably going to get in 100 hands per hour. Your expected loss is 100 hands per hour X $25 per hands X 0.5%, or $12.50/hour in expected losses.

Standard deviation will cause that to vary widely in the short term, but that’s the number that your results will hover around.

But with video poker, you’re averaging 600 hands per hour. At $25/hand, you’re putting $15,000 per hour into action instead. Your expected loss on that is $75/hour.

You’re making 6 times as many bets per hour, so of course you’re going to lose at least 6 times as much as you’d expect to lose playing the slower game.

To top that off, the volatility situation I talked about matters, too. You’ll probably lose more than $75/hour much of that time while you’re waiting for the occasional royal flush that will move your results closer to the expectation.

The Dangers of Multi-Line Video Poker

Of course, my friend could have mitigated those bigger losses quite a bit by not playing the multi-line version of the game. If he’d played one hand instead of 5 hands every time, he’d cut his hourly action by a factor of 5. That would reduce his expected hourly loss from $75 to $15.

That’s closer to what he’d expect from the blackjack game, although the increased volatility is still going to make it seem like he’s losing more money faster than he was when he was playing blackjack.

The other thing to watch out for from multi-hand video poker games is the pay table. I know at a lot of online casinos, you can easily find 9/6 Jacks or Better pay tables. These pay tables return 99.54% if you play with optimal strategy.

Most of these casinos don’t offer that pay table on their multi-hand games. They usually scale the paytable back to an 8/5 paytable, which has a return of only 97.3%.

This means the house edge is 2.7% instead of 0.46%.

What does that mean to your average hourly loss?

If you’re playing 600 hands/hour at $5 per hand, you’re putting $3000 per hour into action. Losing 0.46% of that equates to $13.80/hour in average losses.

Losing 2.7% of that, on the other hand, equates to $81/hour.

The difference between 0.46% and 2.7% doesn’t sound like much. After all, we’re dealing with percentages here—fractions of 100.

But the house edge is more than 5 times higher for the other game.

And I didn’t even take into account the fact that you’re probably putting more money into action on the multi-hand game.

If you ARE going to play video poker—and there’s no reason you shouldn’t, as it’s a great casino game—you should look for the best pay tables and avoid the multi-line games as much as possible.

Even though the house edge is low, it’s still a number that benefits the house. The more money you put into action, the more money you’ll lose to the casino.

A Couple of Thoughts on Strategy

Something else you’ll notice if you’re paying attention is that to achieve these low house edge numbers, you must play using perfect strategy. Any mistakes or deviations from perfect strategy increase the house edge.

Basic strategy in blackjack is easy enough to learn, though. I’ve written multiple posts and pages on the subject right here on this site. You can also memorize a color-coded table, or just buy a laminated basic strategy chart from the casino gift shop. You could print one out online, too.

Video poker strategy is a little more complicated because the variations of video poker are so different from each other. These strategy charts take the form of a hierarchy of hands in order of desirability. You just go down the list until you get to a hand that matches what you have. Those are the cards you keep, and you throw away the rest.

If you deviate from strategy, the house edge goes up. In the case of blackjack, the house edge might be as high as 4% or 5% if you’re making a lot of mistakes. The same is true of video poker.

If you need a good way to learn video poker strategy, by the way, the best books I’ve read on the subject are Bob Dancer’s Winners Guides. They’re definitely worth checking out. You can find free video poker strategy charts on the internet, and those are fine, but I’ve not seen any way of actually learning how video poker strategy works that compete with his series of books.


So no, Patrick wasn’t doing anything wrong when he switched from blackjack to video poker and started losing money so much faster. Some of that is just related to the difference in volatility from one game to the other. More of it has to do with the speed with which the games are played.

Many gambling writers look at a single factor when they’re writing about or evaluating casino games—the house edge. But there’s a lot more to what’s going on in the casino than just the house edge.

I think Patrick will be fine regardless of whether he continues to play blackjack or video poker. As long as he stays away from those wicked slot machines, anyway.

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