Video Poker: Bankroll Size vs. Risk of Ruin

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Before playing any game of Video Poker, the player should be aware of an aspect of gambling know as “risk of ruin.” In brief, it is “the probability of losing an entire bankroll.” A number of factors go into determining this probability, the key ones being the size of the bankroll, the volatility of the game being played and the size of the average wager. In general, the larger the bankroll, the less likely it will all be lost, but risk of ruin can also be reduced by wagering less or selecting games with a lower House margin.

Another factor that regular players of Video Poker need to taken into consideration is something called “cash back.” Most casinos today have players’ clubs that allow them to track wagering patterns and reward frequent players. Cash back programs rebate a small percentage of every bet made, either in the form of points that can be exchanged for additional play or as cash rebates. Obviously, the higher the cash-back percentage is, the less the risk of ruin will be.

Acceptable Risk

Each player must determine for herself/himself how much risk can be tolerated. An aggressive player may be willing to accept a 50/50 possibility of losing the entire bankroll, while a much more conservative one might think that even a 1% chance of wiping out all funds is too high.

As an example of how the acceptability of risk impacts the necessary bankroll required in order to play a Video Poker game, let’s consider full pay Jacks or Better, which offers 9:1 for a full house and 6:1 for a flush. The rate of return for this game is 99.54% and the casino provides a 1% cash back incentive. The aggressive player can safely play with a bankroll of 1,092 units versus the requirement of 7,256 or more units for the conservative player.

On the face of it, the conservative player needs to bring seven times more money to the casino than the aggressive one. But that is true only if they are both wagering the same amount per deal. Another way to think of this is that if both players had the same bankroll, the conservative player would only be able to bet 1/7 as much as the aggressive player. That might mean playing a 10p machine instead of a £1 one.

Reducing Risk

Although increasing the size of the bankroll or reducing the size of the size of the average bet are probably the two most common methods of managing risk of ruin, they are certainly not the only options available. Switching to a more favourable game has an affect, too. The game Double Bonus Poker, when played using optimum strategy, can have a return rate of 100.17%. With the same 1% cash back in place, the conservative player would need a bankroll of only 4,929 units—a reduction of nearly one third.

Similarly, if Jack or Better is played at a casino that offers 1.5% cash back, the required bankroll drops to just 3,296 units for the conservative player—a reduction of over 54%. Clearly, players who are averse to losing everything need to think beyond bigger bankrolls and smaller bets as methods of managing risk. Using published table of “bankroll requirements” for various games, it is possible to identify exactly what’s needed to play with peace of mind.

Published on: 10/11/2013

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