VP logic?

Here is a simpistic VP notion that I've had recent success with. Curious for feedback on the logic.

Assume that the video poker machine in use has the following (I am rounding just a bit):

1) 98% return at the $.25 and $.50 play levels; but

2) 99% return at the $1.00 level.

Isn't it true that one way to look at this situation is as follows: That playing at the $1.00 level decreases the house advantage by a full 50%? And if this is so, then playing less credits at the higher per hand level of $1.00 quite easily offsets the fact one is giving up the roughly 1 in 46,000 chance of catching the Royal Flush with its multiplier effect.

In fact, since adopting this playing strategy about two months ago at my local casino I've hit two Royals playing 3 credits instead of max - sad. But yet, I've been hugely profitable in a more general sense over the same period. Far more so than when I focused upon playing nothing but max credits at the lower play levels previously. And the profit would still exist in the absence of hitting the two Royals. Interesting.

It's true that the house advantage is lower on the $1 game, but you pay for it with a larger bet (kind of; the 50¢ and $1 have the same theoretical loss per hand: 5×$1×.01 = 5×50¢×.02 = 5¢). However, the strategy you're describing has another factor to include: the smaller return from the smaller royal.

Usually when people refer to the return of video poker, they mean the return in regard to the royal jackpot (800 coins/credit). By not playing full credits, you're only getting 250 coins/credit on the royal. This knocks about 1.2% off your return, like so (table is for Jacks, but holds in general):

Type	800 coin royal	250 coin royal
9/6	99.5439%	98.3735%
9/5	98.4498%	97.2156%
8/6	98.3927%	97.2233%
8/5	97.2984%	96.0635%
7/5	96.1472%	94.9117%
6/5	94.9961%	93.7600%
6/4	93.9316%	92.6470%

So in reality, by playing three coins on the $1 level, you're seeing a house edge roughly the same as playing 5 coins on the 25¢/50¢ levels. And your theoretical loss per hand is larger than if you played full coins (3×$1×.02 vs. 5×$1×.01).

There is one advantage to playing short: the variance is much lower since you're not chasing a big payout as often. However, even with that, it's possible to get hit with the deck over a short term. Long term, I think it'll just be the same old grind.

Yep, that is the math alright. Maybe it's the reduction in variance that has increased the profitability so dramatically. I'm just trying to figure out why - after what I estimate has been at least 10,000 - 15,000 plays using the methodology described above - I'm so much more profitable than when I used the 'max credits' approach at the lower bet amounts. It's a mystery.