GETTING THE EDGE WITH CASHBACK by Henry Tamburin
Note: Henry Tamburin is the Editor of the Blackjack Insider newsletter and host of www.smartgaming.com. An astute reader sent me this email. "Most of the video poker games have an expected return (ER) of less than 100%. So how can you become a winner when the house has the edge over you when you play?" This reader is correct when he says that most of the video poker games nowadays have an ER that is less than 100%. Let’s take the example of 9/6 Jacks or Better (JOB), which has an ER of 99.54% (assumes you play every hand perfectly). When a video poker game has a 99.54% ER, then the house has a 0.46% edge over the player (100.00% minus 99.54%). This means players will lose 0.46% of their coin in (the latter is the sum of all the money wagered, regardless of whether it wins or losses). So how can a player come out ahead if he is facing roughly a half-percent house edge? The answer is cashback. I’ll give you a real-world example of how this works. A casino I frequent offers 9/6 JOB and their cashback rate is 0.13%. The latter means I’ll get back 0.13% times the amount of my coin in. Therefore, for a specific amount of coin in, I can theoretically expect to get back 99.54% of what I bet plus an additional 0.13% of my coin in in cashback (or free play, which is the same as cash). The latter is a sure thing. I know at the end of the day I’ll get 0.13% times my coin in regardless if I won or lost playing the game. Therefore, my overall return is the sum of 99.54% and 0.13%, which is 99.67%. I’ve boosted my return playing 9/6 JOB from 99.54% to 99.67% by using my player’s card and taking advantage of the casinos cashback (or free play). Even though a 99.67% overall return is better than 99.54%, I’d still wind up losing money in the long haul because my overall return is below 100%. My goal is to play only when I can get my overall return greater than 100%. How can I do this in this example? By taking advantage of casino promotions. In the above example, on specific days of the week this casino offers multiple-point promotions (or sometimes called bonus points). Once you earn a specific number of points from playing video poker, you are eligible to play a kiosk game in which all the points you earn for that day are multiplied from 4 to 12. This means instead of getting the normal 0.13% cashback, I have a chance of getting 4 to 12 times more (i.e., from 0.52% to 1.56%) for all the points that I earned playing during the day. There is no skill involved in playing the kiosk game and the multiplier you earn is random (i.e., sometimes I’ve gotten 4 times, and other times 12 times). Now let’s do some simple math to see how this works. Let’s assume I only get the 4-times multiplier. This boosts my cashback to 0.52%. If I add the cashback return (0.52%) to the return on the game (99.54%), my overall return is 100.06%. This means I have a 0.06% edge. Grant it, that’s not a big edge, but nevertheless, in the long run, I’ll win slightly more than I lose if I always take advantage of this promotion. Suppose I get lucky and get the 12-times multiplier on the kiosk game (which has happened a few times). Now my overall return would be 99.54% plus 1.56% or 101.1%. That’s a nice 1.1% edge over the casino. The key to getting the overall edge to over 100% when you play video poker is to play a game that has close to a 100% return and then schedule your play time when a casino has a multiple-point (or bonus points) promotion (this is important). For example, the two video poker games that I frequently play are 9/6 JOB and NSU Deuces Wild. The ER for these games is 99.54% and 99.73% respectively. My first preference is to play NSU because it has a slightly higher return but this game is not always available in all casinos. When NSU is not available, my fall back game is 9/6 JOB. Some casinos don’t have kiosk games; instead, they might just specify a certain day where all the points you earn are multiplied by a specific amount (known as multiple-point promotions). For example, one local casino in Las Vegas has given video poker players 7-times points on specific days. Their normal cashback rate is 0.10%. With the 7-times promotion, the cashback rate jumps to 0.7%. The inventory of their Double Bonus Deuces Wild (99.81%) Not So Ugly Deuces Wild (99.73%) 9/6 Jacks or Better (99.54%) Playing any of the above games with perfect strategy with 7-times points (i.e., 0.7% cashback) would give a player an overall return that exceeds 100%. You can boost your overall return even more by taking advantage of the bounce back coupons that you will receive in your mailings from the casinos that you frequent. Bounce back means you have to "bounce back" (or return) to the casino in order get the cash (or free play). (For example, I get $100 per week from one casino in free play. The amount of your bounce back will depend on your level of play.) Calculating the return from bounce back is tricky and in a future article I’ll give you tips on how to do it. (Bounce back can be lucrative, as much as 0.5% to 1% or more each month. For now, consider the bounce back as icing on the cake to your overall return.)
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