Why is Video Poker return to player so high?

Ok, first let me declare that I am on the same side as most of you readers here. I'm an AP and I'm all for high RTP, +EV opportunities etc. But today I just want to play devil's advocate a little to understand RTP better in a practical sense.

My fundamental question of "why?" makes an assumption that casinos have the right to set the pay table (hence theoretical RTP) at whatever the want. If this is wrong then do let me know as that means my entire question will be in valid. Although I'm guessing the laws probably won't allow a 20% RTP but meantime doesn't force the casinos to always give 9/6 on JOB.

So then, my assumption is that, casinos are in no way obligated to give us more than 100% RTP or any +EV for that matter. But yet, they do, for some reason, especially in Vegas. Having more than 100% RTP makes them extremely vulnerable to APs.

I took a trip to Sweden earlier this year. While I was there I checked out a few major casinos in Stockholm. I was really surprised to see the video poker pay tables maxing at 95%. All the blackjack tables there are Continues Shufflers with poor rules as well.

So my question is, if these Swedish casinos seem to do quite well while offering horrible RTP, well, why offer any better then? Even without comparing to Sweden, my hometown casinos have 97-98% RTP which is shit. America's 2nd largest Gambling City, AC, also has pretty shitty video poker pay tables from what I know.

All this analysis seems to point to that Vegas has no reason to offer good pay tables on video poker. And yet, there is one reason to offer bad ones - more money for the casino. Can the average tourist even feel the difference between 97% RTP and 101% RTP anyway? Can APs even feel it in a short session for that matter?

So the conclusion - either I'm missing something or Vegas Casino managers are making a very bad decision that is costing them a lot of money.

I assume I'm missing something.

So fill me in.

Simple economics. Lots of casinos in vegas. Competition for customers.

Yet Slots are still 80-85% And nobody seems to mind setting it any higher for "competition for customers"?

Quote: Neutrino

Yet Slots are still 80-85% And nobody seems to mind setting it any higher for "competition for customers"?

Slot players aren't as picky about taking their business elsewhere.

(Penny) slot players will play just about anything and everything. Slots are unknown as far as their returns (unless you figure it out yourself, which 99.999% of players do not do).

Video poker machines are easy to figure out, all you need to do is look at the paytable and you know what the return is....well, assuming you know 9/6 JOB is 99.54%, 8/5 BP is 99.17%, and whenever a pay goes down it hurts and if it goes up it helps. And from there, it's very easy to figure out why a local would rather play at stations property than a caesars property when it comes to video poker.

Because you can make horrible mistakes on VP.

Quote: Neutrino

My fundamental question of "why?" makes an assumption that casinos have the right to set the pay table (hence theoretical RTP) at whatever the want.

Pretty sure that is not the case. There are likely gaming commission rules that specify a minimum theoretical return. Some jurisdictions will have a maximum theoretical return, too.

VP players are not typical slot players. It's a slightly different market. Competition is fairly high.
And plenty of people make mistakes costing them .5 to 1%.
People generally are playing with more money per pull and the pull lasts shorter.
3-5% on the strip for most VP players at $1.25 is most typical. At 400 pulls per hour, that's $500 / hour x 3-5% = $15 - $25/hour.

A game like $20 PGP at 30 hands per hour is about $12/hour.
$10 BJ at 100 hands an hour is about $10 / hour
Penny slots at 300 pulls an hour at $1/shot at 7-10% = $21 - $30 / hour.

It's all in line.

0 - 1% machine are few and far between, especially on the strip and in places lacking competition or where competitors are colluding.

I always theorized that especially for bartop VP, since the bar has to be there anyways, they might as well make SOME money off of it, and were ok with a higher RTP because of that.

Most jurisdictions in the U.S. have regs requiring 75%-80% minimum return to players (yet most lotteries are 50-60%).

Video poker has been getting tighter and will continue to.

Quote: rsactuary

I always theorized that especially for bartop VP, since the bar has to be there anyways, they might as well make SOME money off of it, and were ok with a higher RTP because of that.

Really?

Out here in the sticks, the bartops are usually the worst RTP for VP. The best ones are hidden away in some corner.

Quote: Dieter

Pretty sure that is not the case. There are likely gaming commission rules that specify a minimum theoretical return. Some jurisdictions will have a maximum theoretical return, too.

Technically this is true but the house edge maximum is not effective (in most but not all cases). In NV a slot machine must return 75%, in even the tightest casino they return much higher than this which proves that the market, not the legislation, is determining the minimum house edge.

An analogy would be if there was minimum wage legislation set at $0.35 per hour. Yes technically this would be a minimum wage but the effect of the law is zero. Likewise the restraint on the casino operator's desire to maximize the house edge is the market, not the legislation.

Quote: bigfoot66

Technically this is true but the house edge maximum is not effective (in most but not all cases).

It took me a minute to parse that.

Yes, slots and VP typically have higher than the minimum required RTP. You're absolutely right that people are unlikely to play the machines that have a lousy RTP.

The flip side comes into play far more often, from what I've seen. A lot of tribal compacts (which cover all the gaming out here in the sticks) specify that an "electronic game of chance" cannot have a greater than 100% RTP... which is why we don't see any FPDW out here.

Quote: Dieter

It took me a minute to parse that.

Yes, slots and VP typically have higher than the minimum required RTP. You're absolutely right that people are unlikely to play the machines that have a lousy RTP.

The flip side comes into play far more often, from what I've seen. A lot of tribal compacts (which cover all the gaming out here in the sticks) specify that an "electronic game of chance" cannot have a greater than 100% RTP... which is why we don't see any FPDW out here.

The closest that I can think of is going to be 40/10/6 DDB (99.96%) & Full Pay Pick 'Em (99.95%). Comps, cash back and bounce back should put them over 100% though.

Quote: Ibeatyouraces

The closest that I can think of is going to be 40/10/6 DDB (99.96%) & Full Pay Pick 'Em (99.95%). Comps, cash back and bounce back should put them over 100% though.

Hah! Never see anything that good out here. 9/5 JoB is about the top, and that only appears at high denominations ($5 nearby*) with the fun of single line high variance.
It's all gambling and hoping for the best.


*Driving for another 3 hours, one can find $1 9/5 JoB with no penalty for single coin vs 5 coin. Still single line.

Quote: Dieter

Hah! Never see anything that good out here. 9/5 JoB is about the top, and that only appears at high denominations ($5 nearby*) with the fun of single line high variance.
It's all gambling and hoping for the best.


*Driving for another 3 hours, one can find $1 9/5 JoB with no penalty for single coin vs 5 coin. Still single line.

I don't know where you're at, but Soaring Eagle has the 40/10/6 DDB and Kewadin SSM has the FP Pick Em. Both Indian casinos. And both games are quarters!

Quote: Ibeatyouraces

I don't know where you're at, but Soaring Eagle has the 40/10/6 DDB and Kewadin SSM has the FP Pick Em. Both Indian casinos.

Sweeet... That's only an extra 9 hours of driving in the wrong direction. :)

Quote: DRich

Most jurisdictions in the U.S. have regs requiring 75%-80% minimum return to players (yet most lotteries are 50-60%).

Video poker has been getting tighter and will continue to.

Not if you stop complying and refuse to put in garbage.

Quote: bigfoot66

Technically this is true but the house edge maximum is not effective (in most but not all cases). In NV a slot machine must return 75%, in even the tightest casino they return much higher than this which proves that the market, not the legislation, is determining the minimum house edge.

The other aspect that must be considered is competition amongst manufacturers and one machine v. another machine. While it is true that 99.9% of players either cannot or do not wish to approximate the House Edge, a slot player can recognize the difference between getting absolutely killed and not getting absolutely killed.

With that in mind, the manufacturers will often set minimum programmable returns on their individual slot titles because they don't want a player perceiving himself/herself as getting murdered and, therefore, never playing that title again.

In other words, the player must get reasonable time on device. The one thing you may notice about penny Slots is, even though the returns are generally bad, with lengthy Bonus Games and partial pays (that are still losing plays) time on device is similar to many higher denomination machines with fewer lines, fewer features, sometimes fewer Bonus Games, but a better return percentage.

On some occasions, due to Variance, a player may still get absolutely destroyed, but that's generally not the goal or expectation.

Quote: Mission146

a slot player can recognize the difference between getting absolutely killed and not getting absolutely killed.

Ok I've been actually wondering about this for a long time too. My intent was only to ask about video poker but since everyone seemed to compare them to slot players I guess I'll ask about them too.

I almost never play slots in live casinos. The only exception is when I see a high progress on a must hit progressive (such as $480 on a $500 must hit slot). When I do play those nasty live slots, I do feel like I'm getting murdered.

This is probably due to my background in slots being mostly online play. I used to play a ton of slots on Bovada before their bonus system turned to ashes. Some of their slots are 97%+ RTP. It's quite easy and common to come out on top over long sessions. With slots that are less than 3% HE, when you hit a bonus round or feature you can generally expect to recoup a good amount of your losses so far, if not more.

And so when I'm playing those nasty 80% Slots I very much feel like being murdered. It's almost impossible to come out on top. While grinding for the progressive I would notice my balance went down, and told myself out of a joke that my "screen full of staking symbols" is overdue. And when I do finally hit the screenfull of stacking symbols, it's $60 win. Yeah, just $60. Where I probably lost maybe $150 trying to get there. You can't prove a machine is bad if you get unlucky and never hit your dream reels. But you can prove a machine is bad if you hit that dream setup and still come out behind. Fortunately for me, I knew what I was doing and my progressive wins more than offsets my losses getting there.

There is a major difference between 2.5% HE slot and something that is 10x the house edge. One you can quite often come out on top over a session and the other you will almost never come out on top.

Since the difference is just SO great, my natural question to ask is, why don't the slot players all switch to online? Why not feel what is like to win for once?

You actually answered both of your own questions in the paragraphs preceding them.

Slot players do care about not getting killed, but more than that, they are there for the live casino experience. When you mention Must-Hits, essentially, someone must be driving up those meters and that is who is doing it.

Now, in terms of experience, playing at home online is a totally different one. It is vastly different as opposed to one casino vs. another casino. There does remain some difference between one casino (or area) and another, however, which is why The Strip can have machines that average a higher House Edge compared to Downtown.

But, you're talking in terms of much less than 5%. If an individual really enjoyed a machine of a certain type, but it returned 10% less than the same title at a casino in a different area...call it $3.00 per spin...at 300 spins an hour with $100 stuck in the machine, you're losing an extra $0.30/spin.

In 300 spins, you're losing $90 more bucks on the worse machine. You don't even make it 300 spins. If the House Edge is 20%, overall, you lose $0.60/spin, so if you play 150 spins with $450 total action, you're expected to lose $90 in a half hour and only last a few minutes more.

If you compare that to a machine that holds 10%, then you have 300 spins and $900 action before you lose $90. You play a little over an hour, and that's a very concrete and discernible time period.

The point is that you'll have a substantial difference that more players will experience that boils down to more than Variance. It's noticeable.

And, of course, the difference between an online return and a live casino return is discernible, as well, but there's one key difference: You're not in a live casino.

You don't think Slots are particularly fun and are not playing them for fun. The individuals in question are. The live casino is simply more fun, even if you can play over three hours at 3% at home before you lose that $90.

Quote: Dieter

It took me a minute to parse that.

Yes, slots and VP typically have higher than the minimum required RTP. You're absolutely right that people are unlikely to play the machines that have a lousy RTP.

The flip side comes into play far more often, from what I've seen. A lot of tribal compacts (which cover all the gaming out here in the sticks) specify that an "electronic game of chance" cannot have a greater than 100% RTP... which is why we don't see any FPDW out here.

Kansas, Missouri, Ohio, and NJ don't have those laws on the books, but they don't offer 100%+ games either. The market doesn't really demand it. Missouri stopped offering them in 2009 I believe with a KC casino ditching the last "full pay" All American machines (100.72%). And yes Axel, I remember you telling me even higher paying ones used to exist there...lol

And to answer OP's original question, when it comes to single hand video poker, variance on some games is pretty low, so you will notice the effect of poor paytables more. Also, when talking traditional VP, there are fewer bells and whistles in the game itself to distract you from losing your money.

Quote: boymimbo

VP players are not typical slot players. It's a slightly different market. Competition is fairly high.
And plenty of people make mistakes costing them .5 to 1%.

These are good points, but... 0.5% to 1%? LOL. People who received training and who've put in a couple dozen hours of practice make mistakes costing 0.2% to 0.5%. A typical player who has studied the strategy and thinks they know the game makes mistakes costing 0.5% to 1%. 95% of players have not studied strategy and do not practice on a trainer that alerts them to errors. Their error rate is generally in the 2-5% range.

I'm not pulling that 2-5% figure out of my ass. I spend a fair amount of time watching other players, either when I'm trying to figure out if they're an AP, or because I'm stuck on a slow machine and have nothing else to do. The errors they make are comical. Also, at some properties, I've seen the theo generated from my play, which is probably computed from historical hold figures. I get 3.5% theo playing 9/6 JoB on one of my current plays.

Quote:

People generally are playing with more money per pull and the pull lasts shorter.

Yeah, exactly. Put out a 98% VP game, your actual hold will be more like 5%, and the bet size and rapid rate of play will make your hourly profit comparable to a 85-90% penny slot.

Put out a 97% game when your competitor has 98%, and your best players will notice and tend to go elsewhere; unlike slots, they can see at a glance how bad your game is. If you instead decide to put out a 99%+ game and advertise that you have the loosest games in town, you'll gradually gain customers, and you'll still hold 3-4%. Moving from a 98% paytable to 99% or 99.5% doesn't cut your hold by 1/2 or 3/4, it cuts it by like 1/4. It's not like slots where the hold you set is exactly the hold you get.

Quote: fivespot

I get 3.5% theo playing 9/6 JoB on one of my current plays.

That's really good, but is 9/6 JoB the only game on it? Does it have keno too? I doubt the average error rate at one of the simplest of all VP is ~3%. You really have to some big errors to lose 3%. I'd be shocked at 2%. When I watch others in my area (I get bored), I estimate they cost themselves 1 to 2% at worst. Even the most common error I see people make (maybe 50% of the time) (breaking two pair with Kings-Jacks at DDB) only costs 0.43% at 9/6 DDB if you do it EVERY time.

Quote: tringlomane

That's really good, but is 9/6 JoB the only game on it? Does it have keno too? I doubt the average error rate at one of the simplest of all VP is ~3%. You really have to some big errors to lose 3%. I'd be shocked at 2%. When I watch others in my area (I get bored), I estimate they cost themselves 1 to 2% at worst. Even the most common error I see people make (maybe 50% of the time) (breaking two pair with Kings-Jacks at DDB) only costs 0.43% at 9/6 DDB if you do it EVERY time.

I literally saw a guy hold 4679 unsuited at deuces wild once. I think you're underestimating how bad the bad players can actually be.

Quote: sabre

I literally saw a guy hold 4679 unsuited at deuces wild once. I think you're underestimating how bad the bad players can actually be.

I've watched someone place a series of bets on an electronic roulette that could not possibly win more than she bet.

Why yes, I did stop dating her not long after.

Quote: sabre

I literally saw a guy hold 4679 unsuited at deuces wild once. I think you're underestimating how bad the bad players can actually be.

True, I've seen plays like that that makes no sense as well. For those who can't remember the basic strategy with VP, can't they just use a printed strategy chart or app on their phone while they play? That's allowed right?

Quote: Dieter

I've watched someone place a series of bets on an electronic roulette that could not possibly win more than she bet.

Why yes, I did stop dating her not long after.

Hopefully not for that reason.

FYI AP'S do it all the time.

Quote: Neutrino

True, I've seen plays like that that makes no sense as well. For those who can't remember the basic strategy with VP, can't they just use a printed strategy chart or app on their phone while they play? That's allowed right?

I think you dam well know the awnser to that question.

Quote: AxelWolf

I think you dam well know the awnser to that question.

And for those of you who don't: in Nevada, anyway, using a VP phone app is illegal (first offense: 1-6 years in the slam and/or $10,000 fine; subsequent offenses, the jail term is mandatory, and cannot be suspended or replaced by probation). Using a strategy card appears to be fine; I have never had a problem using one. Of course, a card will only have room for a certain number of plays; something that covers every play would end up being more like a strategy book.

Other jurisdictions - especially tribal ones - may have different laws.

Quote: sabre

I literally saw a guy hold 4679 unsuited at deuces wild once. I think you're underestimating how bad the bad players can actually be.

Oh they can be that bad, sure. But I rarely notice people consistently making terrible plays. Especially beyond the Vegas Strip.

Also in that example, that could have been a person misreading 4679 as 4678. But if he plays the next 20 hands close to optimal, then that probably was just a poor read. Hell I may have done it once before too being careless.

Quote: AxelWolf

Hopefully not for that reason.

FYI AP'S do it all the time.

Oh no, there were surely other issues. Just icing on the cake.

She was definitely not understanding or calculating a specific loss. She was sprinkling corner bets around, enough so that was likely to hit something (but only 1), and of denominations such that it would only barely break even if it landed on a particular spot, and otherwise would lose. No particular pattern or system, and certainly not anything that was working. After the third or fourth round where she got happy for "winning" 10 (or so) (for a lay of 25 or so), I couldn't watch it anymore.

Not the brightest cookie in the shed.

As for AP's, I would hope there would be some angle. She wasn't working one.