Bad Beat Jackpot Math

I'm not really sure where this topic belongs, because it is about a non-Vegas casino, but seeing as how it is most importantly about odds, I think this will work.

Anyway, my local casino has a bad beat jackpot with relatively low standards (As full of Ts loses to any 4 of a kind or better, both hole cards used, jackpot rake met, and that's about it). I know that typically BB jackpots are an awful deal and are really an excuse to rake more, but I feel like maybe this one isn't so bad. I'm not absolutely sure about the breakup, but let's assume it's as follows because it seems to be average and sounds right: 50% to hand loser, 25% to winner, and 25% split amongst the others. Using the wizard's bad beat odds chart, it gives the value of .00007714 (1 in 12,963) probability of anyone "winning" the jackpot, meaning the odds of YOU getting the bad beat are 1 in 129,634. Right now the jackpot value is hanging right around $150,000, with the jackpot rake being $1.

With this information, it seems like it would be a good deal if it pays out the whole prize, but it doesn't. Not being great at statistics, I am not sure how to calculate a return based on how the money is broken up. At what value would this jackpot become break-even? Could I just generalize by saying since 75% of the jackpot is paid out, it is break-even when j=(1/p)x r x (1/x) where j=advertised jackpot value, p=probability of hitting jackpot, r=rake, and x= ratio of jackpot paid to players? Or is it more involved than that? I'm sure it is, but I just don't know where to go from here.

I don't think it matters how the money is split up. What you give up if you hit it, you gain if somebody else does. So I would divide the 0.00007714 figure by 10, and multiply by the jackpot value. That gives you a value of $1.16 per hand. Not considering taxes, this is a good bet.

For the benefit of other readers, here is a link to my bad beat jackpot odds.

My only issue is that 100% of the jackpot is not paid out, so you have to adjust it a little. Only 75% goes to the players, which to me means that it would have to be 4/3 what it is. If it only gives out 3/4 of $150k, then the total payout is $112.5k. I think that would mean, to be an even-money bet itd have to be roughly $173k (that would make the paid out money $130k, which is slightly about 100% return).

So it's still pretty damn good for a bad beat jackpot, and soon it's going to be even money or better, just not quite over $1 return yet, right?... but what am I doing arguing with the Wizard- you're the man!

Quote: FootofGod

but what am I doing arguing with the Wizard- you're the man!

Thanks, but readers catch my mistakes all the time. In this case, however, I still say as long as people betting the bad beat split up the money somehow, the split doesn't matter. If the "others" include players not making the bad beat bet, that would depress the value of the bet. You would be subsidizing those not betting it. In other words, if somebody else hit the bad beat, and you got an equal share as somebody who didn't make the bet, then that would lower the value of making the bet, indeed by 25%.

This thread seems to be asking if the Bad Beat is a good bet or not.

I don't know if that's a valid question.

The BB funded from is $1, taken out of a pot of $20. It is not optional. The only way to avoid that $1, is to play at a casino that doesn't have the BB.

Sounds like you only want to play when the BB is high. You know how the lines at the corner lottery agent get long when the prize hasn't been hit for a few weeks? Same thing happens in a poker room when the BB is high.

It was over $300K at Caesars AC recently. There was a 7 hour wait to get a seat. They cancelled all tourneys because players wanted to play cash games (tourneys don't participate in the BB) and they needed the tables and dealers for the cash games!

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Quote: FootofGod

...typically BB jackpots are are really an excuse to rake more...

"Rake" generally refers to the casino's take from the poker table. And that certainly seems like what you're implying.

In some poker rooms, the BB tote board displays the FULL amount withheld, where only 75%-80% gets distributed when it hits. The other 20%-25% is to re-seed it for the next hit. In other poker rooms, the tote board shows the portion to be divided when it hits.

Either way, 100% of the money collected goes to the players - either on the current BB, or the next one.

Oh, sure, the casino technically could be earning interest while the money is waiting to be paid, but that's another story.

On a side note, it is my understanding that the Hilton in AC maintains poker tables just waiting for the former bad beat to finally get paid. Their poker 'room' is just 4 tables, at the end of the craps pit. It's generally open only on weekends and holidays, and rarely has more than two tables open.

Quote: Wizard

In this case, however, I still say as long as people betting the bad beat split up the money somehow, the split doesn't matter.

Hmm, I don't think I'm getting what you're saying, or we're talking about two different things.

What I'm saying is there is 25% of the value displayed that the players are not getting- 10% goes to the casino and 15% seeds the new jackpot. The 75% is what the players are splitting up, and I understand that it doesn't actually matter how they split up this value (albeit a realization I made right before my first post), but what I'm saying is the payout is basically 3/4 what it advertises as the jackpot, and that this payout amount, not the advertised jackpot, is the critical number to use to calculate the return, meaning when the jackpot SAYS it's $173k, the amount paid out to all players is about $130k, which means you're paying $1 for a 1/12,900 chance in winning $130,000 divided, in some way, by 10 people (I assume if there's less people it should equivalently effect the odds because of less drawers, no?), meaning an average profit of $13,000 per person... here we have our $13,000/12,900 > $1 and our positive return.

Sorry if this is a tad redundant and the math is rough (I'm an engineering student- go figure), but I want to make sure I'm being specific and clear because this seems correct to me.

Quote: FootofGod

...which means you're paying $1 for a 1/12,900...

Let me state again, "You're" not paying $1. The $1 comes out of the pot. ONLY $1 per pot, when the pot is at least $20.

And it's NOT optional.

Okay, thanks for the correction that the $1 is deducted from the pot (of at least $20) and is not like a side bet. That said, I still maintain you are getting back $1.16 in return from the $1 taken out of the pot. Tax issues aside, it is worth 16 cents per pot.

Thanks for the input, guys.

I know you can't choose not to pay it, but i usually play tournaments and sit n gos. I just would play ring games more when there was an incentive, like a +EV side jackpot. Also, this casino is slow most days of the week, so there are times when I know there'd be no problems getting a game.