Small Wins or Huge Jackpots?

Quote: gambler

Would you rather have smaller, more frequent payouts or would you rather have the chance to go for broke and win a life changing jackpot?

I'm sure we all prefer to win the huge payout or atleast prefer to dream about winning the huge payout, but when it comes to actually buying a chance for it: I'd go for the lower payout since its an event that is far more likely to take place. Its sort of like choosing between a straight-up number bet in roulette and choosing to bet on RedorBlack. If you win on a number bet, thats great, but rather rare.

Quote: Wizard

A. I hate volatility.

Resurrecting an old thread, but I was thinking about this today:
Isn't volatility what you are paying for when you gamble in negative expectation games?
If the volatility==0, you wouldn't play.

Of course, if you are an advantage player (e.g. card counter), you definitely want the smallest volatility you can get (for a given return %).

For a 'gambler' though, the question of high or low volatility is complicated... too low and it isn't fun (try betting pennies on a coin flip!) and too high and it also isn't fun (too much risk!)

I think as a gambler you have a certain volatility you are comfortable with / desire. Given that volatility, you then look for the lowest house edge. For example, if you are willing to risk $200 and want about a 90% chance of lasting 100 trials, you want to size your bets so that the individual bets have a standard deviation of about 12 dollars. To pick an example which is easy to work with (but a poor choice of game IMHO), if you bet red or black on roulette, your bets would be 12 dollars and your expected loss for 100 trials would be about 60 bucks. If you instead bet $2 on a single number repeatedly, your standard deviation is also about $12, so you would get the same volatility and have an expectation of -$10 for the 100 trials.

Quote: DrEntropy

Isn't volatility what you are paying for when you gamble in negative expectation games?

I've noticed the kind of game that I am going to be able to play in FL fairly soon [that has any attraction for me at all] is going to be reasonable house edge but low volatility. I think I am going to have a hard time enjoying the gambling per se, although it will be interesting as hell to check it all out. For one thing, these games will be totally new to me. For another, just checking out the whole scene knowing the Seminole tribe is behind it all.

To answer your question, I think volatility is what you want unless you think you have worked out an advantage. I might post something on the FL games before I even go, as I have been thinking about that a lot. Of course volatility in a bad direction, worse if persistent, can send a guy to the funny farm, negative or positive expectation either one.

Quote: DJTeddyBear

I've also seen machines that had some prizes at $599 for the same reason (or perhaps they were older machines, and the law / limit changed since?)

The top prizes on some machines are set to $599 or $399 when the top prize can be doubled or tripled. Like, on some machines the jackpot is paid on 3x pay, 3x pay, 3x pay in which case the stated prize is paid without tripling. But if the top prize is paid on 7, 7, 7 and there's a 3x pay available on reel 3 then the prize for 7, 7, 7 is set to $399 so that the max payout is $1197.

Here in Minneapolis, the local casinos don't seem to mind the paperwork for big wins so they set $1200 and $1250 top payouts (and higher, but these two strike me as odd). But outstate the Indian casinos seem to favor lower volatility, lower jackpots, and less paperwork.