As an example, we are playing slots with a 2.5% house margin. We are betting $1 on every
spin. The jackpot is $500,000. The odds of hitting the jackpot are 1 in 3 million. Without the
jackpot, we have an expected value of $ 0.975 or – 2.5%. But because of the progressive
jackpot, we have gained an advantage and have an expected value of around $1.14. Put
another way, we have a positive advantage of 14.16%*. So much for slots being a suckers
game!
The advantage play strategy has two elements, you need to find slots with a relatively low
house edge and also the largest jackpot. This is why advantage play works best with online
slots. Because of lower taxes, operating costs and having effectively no limit to the number of
slot machines; online casinos set a much lower house edge on their slots. Typically it will only
be around 1-3%, compared to most land casino slots that will have at least 7% house edge. On
top of that, it is very rare to see progressive slots beyond $500,000 in a land casino but its
easy to find online slots with a progressive jackpot with over a million dollars. This makes sense
because most land casinos will only have so many slots linked together. Even the largest
casinos can only link a hundred or so machines. The online casino has potentially an infinite
number of slots linked together to build massive progressive jackpots.
Squeeze the House Edge – Comps, Loyalty Points, Bonus
Playing for the jackpot is really more a long term strategy. In the medium to short run, it is
important for the advantage player to squeeze the house edge by making use of comps, loyalty
points and bonuses.
As an example, All Slots has a Loyalty Program that where for every 10 credits you wager, you
get 1 Player Point. For 1000 Player Points you get $10. This reduces the house edge by 1%.
On top of that most online casinos will give you a 100% bonus on your first deposit, which
again reduces the house edge.
Who's paying for the Advantage?
Slots is an interesting casino game because both casino and the advantage player can come
off on top. The advantage strategies are in fact paid for by the other slots players. The ones
who play any sized jackpot, its their losses that have built up the prize. Also, the casino’s give
out generous loyalty programs because most players are short term tourists and more than
make up the casino’s lost margin.
So be aware of when there's a good slots game going and what to look out for. Good luck!
*EV $1.14 = $1*0.975 + $500,000*(1/3,000,000). In slots our expected value has two parts. We have the regular house edge on normal wins and losses. Then we have a jackpot element that is always positive. You can estimate the EV for different slot machines but in essence you are looking for the biggest jackpots and the lowest house edge. It is interesting that we can get a positive EV while having a positive house edge. The casino continues to make a profit, the
positive EV has in fact been paid for by previous slot losers. |
