+EV side bet?

[1357111317]

A local casino is offereing a promotion on a side bet where if you hit a certain combination of cards you will win a significant amount of money. For this side bet you will win 1.17 dollars for every 1 dollar you bet. However 37 of those cents come from the jackpot which you only hit 0.0015% of the time, or 1 in 66 thousand hands. Now technically this is +EV but playing 66 thousand hands would take roughly 1000 hours give or take a hundread hours. Would you play this side bet?

 

[FLASH1296]

no

 

[1357111317]

What would be your threshold for playing this side bet? 90 out of 100 without the bonus and 1.40 for 1.00 with the bonus?

 

[callipygian]

Using the rule that KellyBet = EV/Variance, your side bet should be 0.00013*Bankroll, or $1 for every $8000 you have as a bankroll.

 

[actuary]

A local casino is offereing a promotion on a side bet where if you hit a certain combination of cards you will win a significant amount of money. For this side bet you will win 1.17 dollars for every 1 dollar you bet. However 37 of those cents come from the jackpot which you only hit 0.0015% of the time, or 1 in 66 thousand hands. Now technically this is +EV but playing 66 thousand hands would take roughly 1000 hours give or take a hundread hours. Would you play this side bet?

Your post is a great reminder of why one should never consider Expected Value alone when deciding if a game is worthwhile to play. We must also look at the Standard Deviation or Variance of the game. This game's standard deviation is sky high! Sure, if you could play an infinite number of hands, you should make this bet, but the problem is our lives are finite and furthermore, when the jackpot is won, the +EV goes back to negative, so this is really a short run game only.

High standard deviation means, in this game, there will be very few winners who will make a lot of money and many losers. It is undesirable to us advantage players because odds are we will not be the lucky ones to be the big winners.

Another example to drive home my point is a slot machine that costs $1 a spin and has only one payout, $50 billion, with the probability of winning 1 in 1 billion. EV = $49 per $1 spin! But would you play this game?

 

[johndoe]

Absolutely right. From another perspective, you can also ignore the payout, and just consider the odds of hitting the jackpot while you're sitting there. How long do you need to sit to have a reasonable shot? Years! No thanks.

 

[sagefr0g]

Your post is a great reminder of why one should never consider Expected Value alone when deciding if a game is worthwhile to play. We must also look at the Standard Deviation or Variance of the game. This game's standard deviation is sky high! Sure, if you could play an infinite number of hands, you should make this bet, but the problem is our lives are finite and furthermore, when the jackpot is won, the +EV goes back to negative, so this is really a short run game only.

High standard deviation means, in this game, there will be very few winners who will make a lot of money and many losers. It is undesirable to us advantage players because odds are we will not be the lucky ones to be the big winners.

Another example to drive home my point is a slot machine that costs $1 a spin and has only one payout, $50 billion, with the probability of winning 1 in 1 billion. EV = $49 per $1 spin! But would you play this game?

maybe i'm off base in my thinking. but this reasoning is the problem i see with video poker. you might find a nearly fair machine but the problem is what makes it fair may be that royal flush that only happens so rarely.
ok if your a comp hound i guess, but otherwise your likely have to play a very long time to end up near even, unless your just lucky.

 

[moo321]

maybe i'm off base in my thinking. but this reasoning is the problem i see with video poker. you might find a nearly fair machine but the problem is what makes it fair may be that royal flush that only happens so rarely.
ok if your a comp hound i guess, but otherwise your likely have to play a very long time to end up near even, unless your just lucky.

Straight video poker play sucks. You can get .7% on full pay deuces wild, but no thanks. If you play during cashback promos, and include mail offers, it gets a LOT better.

 

[standard toaster]

maybe i'm off base in my thinking. but this reasoning is the problem i see with video poker. you might find a nearly fair machine but the problem is what makes it fair may be that royal flush that only happens so rarely.
ok if your a comp hound i guess, but otherwise your likely have to play a very long time to end up near even, unless your just lucky.

My last trip to vegas I hit the royal three times during one session! The only time ive been lucky in my entire life... to bad it was duces wild

 

[jimbiggs]

My last trip to vegas I hit the royal three times during one session! The only time ive been lucky in my entire life... to bad it was duces wild

So I'm assuming you mean you hit a wild royal three times?

 

[actuary]

maybe i'm off base in my thinking. but this reasoning is the problem i see with video poker. you might find a nearly fair machine but the problem is what makes it fair may be that royal flush that only happens so rarely.
ok if your a comp hound i guess, but otherwise your likely have to play a very long time to end up near even, unless your just lucky.

I'd say you are partially correct. Its true about the standard deviation of poker being high due to the weighting of part of the EV on the royal flush.

But, I only say you are partially correct because the odds of hitting a royal (JOB) is 1 in 40,391. It sounds like a lot, but you do play video poker a lot faster than you would practically any other game in the casino. Most agree that an experienced player can play at around 600 hands per hour, and some can even reach 1,000 per hour. At 1,000 hands/hour, you'd expect to hit a royal every 40.4 hours, which is not that rare. This makes video poker with a good paytable a solid bet, in my opinion.