Should Poker Players Want Jackpots in Their Games?

This is the second in what I hope will become a series of posts on the things that (good) poker players should look for in an ideal casino game. Regular players in poker rooms hold sway with the casino management, and this series can be viewed as my personal commentary on what I think you should be lobbying for if you are a good poker player.

Entering "jackpot" into the search field on this blog yields many instances of my bemoaning their existence in my games, but in truth my disdain for jackpots has waned recently. (This is decidedly not due to the fact that I've won a substantial amount from jackpots, which many of my casino acquaintances assumed would change my negative opinion of jackpots in general. Talk about results-oriented thinking!) There are many different types of jackpots awarded in poker games at casinos. In Los Angeles, the "Bad Beat Jackpot" is by far the most pervasive, but in Las Vegas, I think the "High-Hand Jackpot" might still be more common. Both usually take $1 out of each pot (sometimes only if there is a flop) and award money to players in rare instances such as losing with a very strong hand (Bad Beat) or just winning with certain types of very strong hands (High Hand).

For this post, I'll be thinking primarily of the "Bad Beat" type of jackpot, which I think is the worse of the two. I'll be looking at how it affects the three main concerns I mentioned in my previous post:

1. Maximizing Winnings.
2. Having an enjoyable social experience.
3. Playing a pure, intellectually stimulating game of poker.

I don't have anything to say about concern #2 here, but some players may have a strong personal preference for or against jackpots. Personally, I don't like them much. Let's look at concern #3 and then #1.

If playing a pure game of poker is your main reason for coming to a casino, you will hate jackpots, especially bad-beat jackpots. For purists, putting finely-tuned poker strategies to work against real opponents is the essence of what makes playing poker worthwhile. It can be a joyous experience to put theory into practice and have it work out. Jackpots destroy this by changing the players' incentive structure, thereby interfering with the logical inferences about your opponents' decisions that characterize a pure game of poker. These disruptions are most evident in Bad Beat Jackpot games during hands where there are two Aces on board, because the easiest way to win a jackpot is for a third Ace to hit the board while one player has the case Ace and the other player holds a large pocket pair. Winning the actual pot becomes insignificant, with players focusing only on making sure they do not miss out on the 1/40 or so chance at winning a few thousand dollars.

There is another, subtler, consequence of jackpots on the purity of the game that is often overlooked. The $1 jackpot fee is taken from each pot, and this affects optimal play. A slightly smaller pot means that it's optimal to play slightly tighter (and, if other players make are making that adjustment, it becomes correct to play more aggressively). This is a minor disruption, but it is made worse by the fact that another $5 is usually being taken out for the casino's rake, and my sense is that each extra dollar taken out is marginally worse than the previous. (Consider, for example, the effect of taking the first dollar out of a $1000 pot compared to taking the thousandth dollar out after already removing the first 999!) In No-Limit Hold'em, which already has a problem of having too little action when everyone in the game is solid, the problem is especially pronounced. A future post may explore the possibility of adding an ante to NLHE games in order to liven them up a bit.

The jackpots introduce opportunities for corrupt practices by players, dealers, and administrators. Honest players now have one more thing to be on the lookout for in order to protect themselves.

When a jackpot is actually hit, the game comes to a screeching halt. Winners celebrate, decks are examined for evidence of cheating, administrators skim off the top of the jackpot (legally and sometimes illegally), ID's are taken out, and forms are filled out for tax purposes. A nightmare for a purist who just wants to sit and play poker.

I hesitate to call myself a purist (after all, it ranks third on my list of concerns), but maybe I am. Certainly, I'm sympathetic to this way thinking, and I consider "game purity" to be the major reason to dislike jackpots. I previously would have told you that Maximizing Winnings is my primary issue with jackpots, but the effect of jackpots on winnings is actually pretty complicated. Let's examine the pros and cons.

Having often argued against jackpots, I'm well-versed in the negatives. The simplest possible analysis is to look at the EV of each dollar paid into the jackpot. In California, I've been assured that the casino is allowed to take 15% for administrative costs, so each dollar returns 85 cents at best. (This is assuming you can trust administrators not to skim off the top.) The money you put in will sit around for months, on average, so the net present value of that money is slightly less than 85 cents. Then, you are expected to tip. (Tipping can be forgone, I suppose, but everyone I know has tipped after their jackpot wins.) Most players tip 5-10%, so our return is now down to about 75%.

Things are still worse than that, though, for several reasons. First, jackpots increase the volatility of our win rate substantially. Second, the deck-checking is unfairly biased towards delaying the jackpot payouts, because they are occasionally cancelled. (Once in a while the deck-check reveals a bad deck and the jackpot is not paid, but is it very rare for a deck to be checked when the jackpot is not paid out. This means sometimes payments have gone into the jackpot drop in hands that would have been voided had the jackpot been won and the deck checked. To be fair, the decks should be checked every time a dollar is paid to the drop, but this is impractical for obvious reasons.) Third, the slightly smaller pots mean tighter play becomes correct, and this can cut into the win rate of strong, creative players. Fourth, when the jackpot is actually won, the game will be delayed, eliminating winnings you expected to have during that time playing poker. These factors are hard to quantify, but I would say that between the EV and volatility issues another 5% of utility is lost. So, we are at about 70% return, assuming there is no cheating or illicit skimming by the casino management.

I've heard a few good arguments for having jackpots amid many weak arguments. The most worthy argument is that jackpots attracts amateur players.  All else being equal, having to play the jackpot drop costs me about $4 an hour and in the long run I get paid back about $3 in jackpot winnings. So, ignoring strategic effects and time delays, it really only costs me about $1 per hour. On the flip side, a single fish at the table is certainly worth much more than this. Even just a slightly weak player can make up for that $1/hour jackpot loss. Moreover, a good player will tend to play hands that have a good chance at making a jackpot, such as high pocket pairs or big Aces. This means that, for good players, the return on investment should be slightly higher than for weaker players. My sense is that this is a very minor effect, but I could be wrong. It is something, at least.

In conclusion, I would say that the only very significant effect of jackpots on any relevant concern is on the purity of the game. Jackpots are unmitigated disasters for game purity. However, your bankroll will benefit if the jackpot scares off the other poker purists. Purists tend to be good players. If your only concern is for making money, the jackpot might actually be helping you in the long run by attracting worse players to the game. Keep in mind, however, that if these worse players are not in the game at any particular time, you would certainly be better off without the jackpot drop.

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I did not get into the UMD College Park Applied Math department. I am leaning towards accepting the position in the PhD program in Statistics at UMBC.

Advice That Will Help Both My Opponents and Myself

Most of the advice and analysis on this blog could easily be used against me if readers found me at their poker table. (Indirectly, it can hurt me even if we never play against each other by marginally improving the play of the average poker player.) I enjoy doing strategy and hand analysis on this blog, and I think it's been worth any small amounts of EV I may have lost.

A commenter (Rick) suggested that I give some advice that would actually help me if it were followed by my opponents. This sounds easy: Just give bad advice! An intriguing idea, but it wouldn't make much difference because my poker-playing readers can mostly discern bad advice from good, anyway. Fortunately, there is another way: Give advice that helps not only me but also my opponents. This is clearly the angle Rick was suggesting. This seems like a good idea, so I'm going to devote a few posts to encouraging behavior that will improve the culture of casino poker.

When I'm in a poker room, I have three main concerns. Players will surely differ on the relative importance of these three factors, but I think nearly all players are implicitly concerned with these three things. For me, I would rank them as follows.

1. Maximizing my winnings. This is an explicit goal of most players, and the main concern of most poker pros. Like other poker players, I tend focus on ways in which I can win money from other players, but there are also plenty of things players can do to help not only themselves but also other players (either all the other players or some subset).

2. Having an enjoyable social experience. Poker is a social game, after all. Occasionally, I will come across players for whom this seems to be the primary goal of their poker games.

3. Playing an interesting game of poker. This is the concern of the poker purists, who play for the love of the game.

The first piece of advice I want to give is conventional wisdom but is very difficult for many people to follow: Be nice to the bad players. This helps the other players fulfill Concern #1 because the bad players are likely to stick around for longer. It usually also helps the bad players fulfill Concern #2. Unfortunately, poker players are often too immature to resist castigating bad players for bad beats and the like. Personally, I also wish that people were nicer to the good players, but that is not necessarily good for fulfilling Concern #1. There are a few of players at the Bike who are so unpleasant that I tend to try to avoid them, and I imagine it is good for their win rate to get me out of their games.

That's it for today. Stay tuned for my next attempt to help improve the culture of casino poker.

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I've been taking an online course on game theory run by two professors at Stanford.

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I got into the PhD Statistics programs at UMBC and George Washington, but without funding. I'm still waiting on UMD College Park's PhD program in Applied Math, Applied Statistics, and Scientific Computation.

What is Your Biggest Weakness as a Poker Player?

This is another interview-style question that seemed like the type I might get after my Mathematical Poker talk back on February 14. Since I haven't been playing poker recently, these questions have provided a good excuse to keep this blog alive for the past several weeks. I hope to address some other poker issues in the coming weeks, but this will probably be the last in this question-answer format unless a commenter has another question worth answering.

The one thing I think would most help my poker income would be to put more effort into game selection. I'm not sure if this qualifies as a "weakness": most players neglect game selection as much as I do, so I'm not actually particularly weak. Doing game selection has some drawbacks, especially in live poker: it is conspicuous to scout out various tables before playing, it cuts into the time you could be playing, and it annoys the floorpeople if you keep changing tables (especially at the Commerce, in my experience). Still, the effect of having a good game can overwhelm any effect of marginal improvements in my own strategy when it comes to my win rate. I state this without data; perhaps I'll find the motivation to do a bit of analysis to back up (or falsify) this idea. Drawing from my memory, however, it really does seem that some tables at a casino can be clearly seen to be better than others, I am pretty confident that selecting a good game is far more important to my winnings than any small fluctuations in my own play or adding a few extra minutes of playing to my session. In a similar vein, I have rarely tried to make stabs at higher limits, despite my belief that this can be a useful endeavor, and I've had several strong players tell me I should be playing higher stakes. I guess I just don't consider myself much of a "gambler" and I would like to keep it that way.

Historically, my approach to game selection has been as follows: spend 20 seconds scanning the room for known fish or for a table seeming to have an unusually good time. (Occasionally, it helps to play with players who are good but who are particularly skilled at making other players play badly. Rarely, it can also help to notice recognize a player I know focuses on game selection, and I can be confident that any game he is in will be a good one.) Then, when I'm in a game, I am rather aggressive about selecting against staying there. That is to say, I will ask for a table change within 5 minutes if the game is not great. (This can annoy the floorpeople and gives your opponents some information about the type of player you are.) To improve my table selection would require that I spend an extra couple of minutes watching a few hands at each potential game until I find one that is quite juicy, and there are usually one or two of these if you look hard enough. If I don't find a juicy game, I should still be able to select one that is at least pretty good.

At the table, my biggest weaknesses are probably concentration and exploiting strong players, which are related. Against weak players, I am perfectly capable of focusing and probing their weaknesses, but I tend to just model strong players as "perfect" and try to play optimally against them in a game-theory sense. This creates a sort of feedback loop of being distracted from the game if I'm up against only solid players, because I don't feel the need to concentrate on them and this creates boredom. In truth, I do think even good players are exploitable, and this becomes especially interesting once they start trying to exploit me; I tend to be a step behind the competition in such situations (not a big deal, since I think my standard game is unusually difficult to exploit in the first place). I think the problem is that finding opportunities to exploit these weaknesses seldom arise, and it takes an awful lot of patience for the effort to pay off. Perhaps other players are fooling themselves into thinking that it's more worthwhile than it truly is, but the bottom line is that most other players seem to have deeper wells of patience and concentration to draw from than I do when it comes to studying their opponents.