Investing in Video Poker

In this lesson, the final of the series, I want to tell you how to go about 'investing' in Video Poker, because that's really the attitude you have to take towards a game like this. I've written about this to a degree in other articles and what I said then still applies: Playing Video Poker is like making regular purchases of a mutual fund; you pay and pay and pay, until one fine day (hopefully!) you cash in. But mutual funds and Video Poker have their risks and, in the case of Video Poker, the biggest risk is that you'll run out of $$$ before your ship (in the form of a Royal Flush) comes in. But, they do show up, eventually. So, just like any other investment program, your success will be better assured if you have a plan.

Let's say you intend to play quarter machines and you don't have $10,000 or so to commit to your adventure, but you can afford to risk $200 a week at the game. Depending upon the game you choose and the cash-back return, if any, of the slot club offered by your local, friendly casino, you'll lose $$$ at a rate of about 2% until you hit a Royal. What that means is, if you bet $1.25 per hand and play 8000 hands a week (12-16 hours' play), you will, on average, lose the $200 every week until you hit the Royal. The $1000 from that Royal ought to show up some time in your sixth week of play (again, on average), but it could well take 3 months before it comes in. In the meantime, you're investing $200 a week but, if you're playing a game with a 100+% return, it will eventually pay back. At those rates of play, a .25% slot club cash rebate alone is worth $25 a week and that will buffer your loses a bit. Because you're betting $10,000 each week, you're now the proud owner of a nice little $500,000/year business. Isn't that amazing? More about what that's worth a little later.

But let me take another tack here. Let's assume you have an 'extra' $4000, all in one 'bundle' to risk and you have a great game like All American poker available to you. (If you live in St. Louis, there are quite a few of them available.) All American has a long term return of 100.7% when played properly and all the casinos which offer it here also have cash-back slot clubs. So, you may expect a minimum long term return of 0.9% and, if you take advantage of special promotions, should have little problem in moving that to a 1% edge. All American has a very difficult strategy, so it doesn't play as fast as many other games, consequently, your rate of play will likely be about 500 hands per hour. If you can play 16 hours each week, and you don't lose the entire $4000 in a bad swing (about a 1 in 7 chance), and you play 50 weeks a year, you'll total 800 hours' play which is 400,000 hands, which is $500,000 in total bets and will, in time, produce a 1% profit or $5000. That's a helluva return on a $4000 investment. Not to mention that you may get free lunches, dinners, hotel rooms, etc. for simply being such a loyal customer. See, the casino thinks it's earning about 2% of all your 'action', so they figure your $500,000 of bets makes them $10,000 and they'll give you 30 or 40 percent of that back in the form of 'comps'. All that is over and above the $5000 you'll make if you do it right! There are damn few places where a $4000 'investment' can give such a return. Sure, there's risk in this, but there's also risk in crossing the street and, most certainly, there's risk in mutual funds. Want to cut down the risk? Pump your bankroll up to $10,000 or so and you'll have a very small probability of losing it all, IF you are playing a winning game. Now remember that these figures apply to All American; if your game of choice is Double Bonus (100.17% return) or 9/6 Jacks or Better with progressive Royals, the bankroll needed is much, much bigger and the returns will likely be much less. But if you're lucky enough to have full-pay Deuces Wild (100.7%) available, the figures above will work just fine.

It's an intriguing idea, isn't it?