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Academic Looks At Video Poker Returns
According to Clemson Master's thesis video poker doesn't necessarily add up
A Master's degree candidate at Clemson University spent approximately 500 hours researching video poker gambling in South Carolina. His findings? That too often the numbers just don't add up in the bettor's favor.
"I was surprised," said Todd Mateer, the mathematical sciences student who authored the thesis. "I found that an expert-level player can average a positive wage (about minimum wage) if he played 40 hours a week over a two-year time period on a casino-style video poker machine in Las Vegas. But that's impossible for even an expert in South Carolina because of state-mandated caps and lower pay-off tables. And, realistically, most people are far from being experts."
Since its debut in South Carolina in 1986, video poker has become a game of great popularity as well as controversy. Machines number more than 33,000 and are ubiquitous in most Palmetto State gas stations and convenience stores. A recent state Supreme Court ruling could ban video poker by next summer, but that measure is likely to face fierce opposition by gambling proponents. Currently, by state law, the maximum payout per machine to a video poker player in a 24-hour period is $125.
Mateer's Master's degree thesis doesn't take sides in the issue but is purely a mathematical study, he said. Because of public interest in the issue, he and his research advisor Joel Brawley have co-authored a just-released research summary.
Using the theory of probability and extensive computer simulation programs that Mateer developed, the thesis examines the precise moves which should be made by a player for optimum expected return, and assuming such play, reports the probabilities and expected returns of various forms of the game currently existing in South Carolina.
His research verifies claims made in gaming literature that some machines have expected pay-off levels of 99.54 percent if played perfectly - meaning that for every $100 put into one of these machines, the player can expect about $99.54 in return. A player who does not use a perfect or expert strategy plays at a much lower expected return - sometimes as low as 50 percent - and loses money at a much faster rate than the expert player.
Other video poker games, if played perfectly, are considered winning games because they have expected returns of just over 100 percent. But the so-called positive statistics assume the players play at an expert level for 40 hours per week for roughly two years. In the short term, the player must be willing to go deep into debt before hitting the jackpot, which occurs, on average, about once in every 40,000 games.
But that's the best-case scenario in Las Vegas.
South Carolina's mandated $125-per-day payout means that even those expected pay-offs are dramatically lower. In one sample, the expert player would lose money about six times faster than if he were playing on a full-pay nickel machine in Las Vegas.
"The mathematical effect of the pay-off limit is that it has reduced the expected return on nearly all South Carolina machines and has transformed the perfect-play winning games on the fairest machines into losing games," Mateer said in his research paper.
Savvier players have stopped playing South Carolina video poker machines, according to Mateer, who said that most machines would still run losing games even if the pay-off limit were increased to $500.
Brawley and Mateer said they steered clear of the emotions at play in the video poker debate.
"We were determined not to take any side in this issue but, instead, to study the mathematical facts," said Brawley, an award-winning Alumni Distinguished Professor. "As a land-grant university, one of the responsibilities of Clemson is to undertake research which has some potential to benefit the citizens of this state."
Now that the research is over, though, the 25-year-old Mateer said he has advice for players, like him, who enjoy the thrill of the game. "Save some cash and trouble and just buy a video poker simulator for your home computer."
A detailed summary of his thesis is available online at http://www.strom.clemson.edu/future/...st/topics.html
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