Bad Beat Jackpots = Zero Sum?

[Al_Capone_Junior]

He aint played at a harrahs joint lately, has he :-/

Al

[Poshua]

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I suppose yes, if the house does it your way, they could probably get away with it. If at $40 $3 comes out for rake, fine, they can take 10% of the $1 jackpot and be legal and make 10 cents. Or they can just not rake the jackpot and take the full $1 rake at $40. Not sure that's a good trade off for them, but maybe. Does kinda seem like it might make 'em a bit more, at least on games that regularly get >$40 pots. It'd be sorta like raking with dimes instead of dollars, only raking with a single dime only when the jackpot is dropped.

Hope the Harrah's execs aren't reading this thread. If we see 10% of the jackpot drop being raked next year and dimes being used for the rake, we'll know where they got the idea.

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Actually, I think my way would make them 90 cents less only on pots of exactly $20, $30, or $40, and 10 cents more on any other pot of $21 or more. My guess is that would mean slightly more rake to the casino so, yeah, I hope the execs aren't reading.

Similarly, Mandalay Bay used to (still does?) break dollars into quarters in order to take the rake in 25 cent increments. At the time, I didn't realize the no-rounding-up rule, so it seemed really silly to me; now I understand, but it's still [censored] annoying.

[RR]

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I suppose yes, if the house does it your way, they could probably get away with it. If at $40 $3 comes out for rake, fine, they can take 10% of the $1 jackpot and be legal and make 10 cents. Or they can just not rake the jackpot and take the full $1 rake at $40. Not sure that's a good trade off for them, but maybe. Does kinda seem like it might make 'em a bit more, at least on games that regularly get >$40 pots. It'd be sorta like raking with dimes instead of dollars, only raking with a single dime only when the jackpot is dropped.

Hope the Harrah's execs aren't reading this thread. If we see 10% of the jackpot drop being raked next year and dimes being used for the rake, we'll know where they got the idea.

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Actually, I think my way would make them 90 cents less only on pots of exactly $20, $30, or $40, and 10 cents more on any other pot of $21 or more. My guess is that would mean slightly more rake to the casino so, yeah, I hope the execs aren't reading.

Similarly, Mandalay Bay used to (still does?) break dollars into quarters in order to take the rake in 25 cent increments. At the time, I didn't realize the no-rounding-up rule, so it seemed really silly to me; now I understand, but it's still [censored] annoying.

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Long ago there were dimes on the table for rake. Also there used to be a 10 cent ante in 3-6 hold'em.

[Al_Capone_Junior]

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It may be legal, but it certainly destroys any zero sum claims.

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The notion of jackpots being zero sum came from players, not from the casinos. Certain promotions may be zero sum, but most jackpots will be negative.

[NickMPK]

It doesn't seem like this has been brought up before, but it seems important:

Even if the casino doesn't take any cut of the BBJ, it is -EV for the player unless the player doesn't tip any of their BBJ winnings. A lot of players tip 10% on BBJs (a lot more than on a typical pot), which can seriously reduce their equity over the long term.

[Jimbo]

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It may be legal, but it certainly destroys any zero sum claims.

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The notion of jackpots being zero sum came from players, not from the casinos. Certain promotions may be zero sum, but most jackpots will be negative.

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Unless every jackpot ever hit had a full table sitting in at the time the jackpot was hit it can still be +EV. The winner of a jackpot taking the money and running did not effect the chances that you might have won the money. People talk about a so called "poker economy" like some sort of closed loop system exists. Poker is an "open market", for every tourist that stays in Vegas for a weekend then leaves his contributions have added to your EV after the fact if the jackpot did not hit while he played.

Jackpots being +EV is so obvious (even after administrative expenses) I do agree that they are not zero sum but actually that becomes irrelevant. Poker with any rake at all has never been a zero sum game, why should the BBJ be any different? That said since I am a pretty tight player it becomes even more +EV for me. Not just because I will play less pots but also because the type of hands I play are more likely to be a part of the large portion (winners hand or losers hand) than the random loose player who does become more likely to hit a bad beat jackpot in general but will contribute a great deal more to the BBJ than I.


Jimbo

[Poshua]

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Not just because I will play less pots but also because the type of hands I play are more likely to be a part of the large portion (winners hand or losers hand) than the random loose player who does become more likely to hit a bad beat jackpot in general but will contribute a great deal more to the BBJ than I.

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Jimbo, I hadn't thought about this before, but your mode of analysis here is right. Like the rake, the jackpot drop is paid by winners of pots, not by the table as a whole. As such, to determine whether you are +EV or -EV against the jackpot, you need to look at (1) the size of the jackpot vs. the size of the drop, and (2) your likelihood of winning the jackpot vs. your likelihood of paying the drop. Previously, I had thought prong two was simply your likelihood of winning the jackpot.

However, I'm not sure this always cuts the way you suggest. When the jackpot is small, a tight strategy is probably better than a loose one (in terms of jackpot-only EV). As a tight player, what you lose by folding some marginal jackpot hands (like 22 in early position) you more than make up with the non-jackpot hands you fold (and therefore don't win with and subsequently pay drop).

However, as the jackpot gets very large, the loose player's increased opportunities to win the jackpot become relatively more important compared to the greater frequency with which he must pay the drop. Once the jackpot passes a certain amount, the loose player will have better EV from the jackpot than the tight player.

That said, unless the jackpot is truly enormous, the tight player probably still has the better EV for the game as a whole.

[Wyman]

For many players, taxes also make it -EV, even if the casino is paying out a full 100% of the money taken for BBJ. If you pay taxes on every dollar you make in the casino anyway, this will be 0EV -- but if you only pay on a percentage (which I know none of the honest people here would ever do), then BBJ becomes -EV, since you will definitely be paying taxes when you hit.

[Jimbo]

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For many players, taxes also make it -EV, even if the casino is paying out a full 100% of the money taken for BBJ. If you pay taxes on every dollar you make in the casino anyway, this will be 0EV -- but if you only pay on a percentage (which I know none of the honest people here would ever do), then BBJ becomes -EV, since you will definitely be paying taxes when you hit.

[/ QUOTE ] This is like stating that robbing a bank is only -EV if you get caught, not relevant at all.

Jimbo

[Poshua]

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For many players, taxes also make it -EV, even if the casino is paying out a full 100% of the money taken for BBJ. If you pay taxes on every dollar you make in the casino anyway, this will be 0EV -- but if you only pay on a percentage (which I know none of the honest people here would ever do), then BBJ becomes -EV, since you will definitely be paying taxes when you hit.

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Yeah, and this assumes you're an advantage player who already has taxable poker income, and so gets to deduct the amounts paid into the drop as an expense (implicitly-- if you didn't have to pay them, your winnings would be higher). If you're a disadvantage player who would ordinarily have no poker-related tax liability and therefore no tax advantage from the jackpot drop, this deal looks even worse.

Similarly, the deal is also worse if the jackpot pushes you into a higher tax bracket than you would ordinarily be in.