The Lucky Donut

I have read, albeit with some scepticism, the account of Richard Brodie being barred from all Harrah’s casino properties on the grounds that he is simply a lucky player.

Brodie is the author of Microsoft Word, a ball and chain that will no doubt follow him to the grave.  It’s only fair to say from the outset that the person responsible, however indirectly, for that goddamn talking paperclip will receive very little sympathy from me.

Besides an overpriced, bloatware word processor, I am unfamiliar with his work and his adventures as a gambler and I had not read his blog until today.  After a little research, there appears to be enough respect for his writing that I decided that I should not immediately call BS, even though the tale seems a somewhat far-fetched.

I will, however, hold reservations that, just maybe, the story is fabricated (after all, he is a poker player) or that Harrah’s in fact have barred him for some other reason than simply being lucky.  We cannot assume Harrah’s will automatically reveal personal information about a high roller, however there’s always a chance that Jan Jones will open her gob again.  Let’s hope so.

Brodie has been barred from Harrah’s casinos because they cannot work out how to make money from him.

How ridiculous is that statement?  A Las Vegas casino cannot win money.  Sorry, I’ll correct that.  The world’s largest gaming corporation cannot win money.  It really shouldn’t be that hard, and if they’re sweating the action on a $300 per spin video poker machine then the answer should be simple.  Pull the machine.

This photograph (click to enlarge) shows Brodie grinning next to his machine having just hit a natural royal flush – on the deal – for $240,000.  The machine is almost full pay deuces wild.  There’s one variation: 8 coin payback for a straight flush instead of 9.  I plugged the paytable into Frugal Video Poker and it checks in at 100.35% payback, compared to 100.76% for FPDW.  At $300 a pop, with perfect strategy this machiine is worth $1.08 per spin to a knowledgeable player. 

Add on Total Rewards benefits for some extra value.  It’s only a paltry 0.05%, but then each hand becomes worth a theoretical $1.23.  Grind out 600 hands an hour and you’ve got a job that pays over $700/hr.  If you can cope with the swings, of course.  Typically you need a bankroll equal to five royal flushes to deal with the huge variance of video poker.  That’s only $1.2 million then.

Obviously this figure requires perfect play, which is not that simple, when you have to work out which one or two gap straight flush draws to hold and which to discard, taking into account the slightly reduced payout for that hand.  So you have to play a little slower to make sure you make the right holds… maybe it’s only worth $300/hr.

This paytable is rather surprising, given the downgrades Harrah’s have made to the video poker at Caesars (and indeed to Caesars in general) over the last couple of years.  Once the best paytables on the strip, they’re now a poor imitation of their former selves.  The 9/6 Jacks or Better machines have become 7/5 machines, reducing the payback from a healthy 99.54% to a dreadful 96.15%.

Slightly fewer players with a much larger house edge (in this case, more than eight times larger) generates a bucket load more money for the Evil Empire, and since Harrah’s has the marketing clout to ensure a constant volume of players through their doors, they have absolutely no incentive to offer ther players a good gamble any more.

Claire has been researching video poker availability for her summer assault and has found that although there’s a handful of positive expectation machines scattered around downtown and off-strip, they only exist at the 25c level.  The hourly rate, with the very best slot club cashback deals, is about $6/hr.  It would take a really creative use of slot club points and fancy free drinks to come close to 100% payback on a $1 machine.  For anybody interested in all the numbers, vpFREE is the definitive resource.  They don’t even mention the three-coin, $100 machine at Caesars though.

That Brodie has been been lucky is not his fault.  Anyone can run hot, but the odds of hitting a royal flush on that machine still remain in the region of forty thousand to one.  In fact, on Deuces Wild games you should hit less royals than on other types of video poker, if you are playing correctly – you’ll never discard a 2 to draw to a natural royal flush.  The Frugal VP simulation shows that it comes along once every 45,409 hands.

Brodie has indeed been exceptionally lucky, hitting three royals at Caesars in the past year.  To hit three royals should require, on average, 136,000 hands, which is a ten day stretch with no sleep if you can maintain 600 hands per hour.  However over the course of a year, this is certainly achievable although Brodie doesn’t appear to have played anything like that many hands to get his three jackpots.

Brodie claims he’s given about 80% of the winning back, which would put him at about $144,000 profit on the year (20% of $240,000 x 3).  This is the figure I found most interesting though: for an advantage player that would actually grind through 136,000 hands to hit three royals without being exceptionally lucky, their expected return would still be in the same region: $146,000 won plus about $20,000 in comp.

So clearly the thing to do here is to reduce the paytable or bin that machine completely.  It’s a major leak in Harrah’s game.

Instead their answer is to find players who seem to be winning more than their fair share and then do their best to remove the lucky element from their casinos.  Is this not just the same as a player who has to sit in a particular spot at the blackjack table, or has to set the dice the same way every time, or has to wear his lucky underpants before going out to gamble?

That kind of thinking is for suckers, so who’s the sucker now?