Sat, Jun 15, 12:41pm by Kevin Pitstock
The Newcastle Herald recently took aim at the decision of the New South Wales government to allow a new type of gaming machine into pubs. The machines in question were blackjack and roulette machines. A big part of the furor was over the size of bets on these machines.
Opponents of this latest NSW gaming policy pointed out that the bet limit on these devices was $100, ten times greater than the max bet on pokies. The Newcastle Herald‘s editorial pointed out the pro-gambling advocacy group, ClubsNSW, supported the bet limits, and then suggested they were being disingenuous in showing stats which supported $100 max bet limits.
Anyone familiar with casino games should know why this is so, but the article in question doesn’t explain those reasons. A game like blackjack has a house edge under 1%, often in the range of 0.5%. Since many poker machines have a house edge in the 10% range or more, a max bet 10 times more is equivalent, at the least.
If you play classic blackjack with a payout percentage of 99.5%, the average loss per hour might require $200 bets to be equivalent to $10 bets on most pokies, so the blackjack player is probably better off. The same can’t be said for roulette machines, though their house edge is likely to be at 2.7%–still much better than most of the pokies you’ll find in a pub.
People might not follow our logic, so let’s go over this in detail. The Australian gambling industry isn’t often good at getting its message out, so when it has points to make, they should be understood. It’s important the average citizen know why $100 blackjack machines are no worse (or better) than $10 pokies.
A poker machine might have 25 spins per minute, or 1500 spins per hour. Let’s say you play at the $10 max bet limit and the payout percentage is 90%, which is really the same as saying you lose 10 cents for every dollar you wager. If you make 1500 $10 bet, you’ll wager $15,000 in an hour. With a 90% payout percentage, you can expect to lose $1,500 per hour–an astounding rate. No wonder most people make $1 bets, when the losses per hour would be the outrageous amount of $150.
Blackjack hands are played at a much slower rate, perhaps 45 hands per hour. Also, the max bet of $100 and a payout percentage of 99.54% for classic blackjack with surrender, 3:2 payouts on blackjack, and common features like splitting pairs and doubling down. This means you expect to lose $0.46 for every $100 bet–45 times per hour, or about $22.
A blackjack machine increases your loss rate to a much greater degree. The machines are built to speed up the game and let the house edge work more often. If you assume a blackjack 21 machine allows for one hand every 15 seconds, you end up playing 240 hands per hour. With a house edge of 0.46%, you would expect to lose 46 cents 240 times per hour, or $110 per hour.
As you can see, playing the blackjack machine, even with $100 bets, is a much better playing option than the pokies. The fact you’re betting so much money increases the danger of wild swings of fortune, either good or bad. The chances of losing a few thousand dollars could be great placing those $100 bets, though the chances of winning a few thousand dollars would be almost as great.
Like the $1 pokies players, most gamblers are going to bet $5 or $10 when playing blackjack. When you cut your losses at blackjack by a factor of 10, then you’re looking at an expected loss of only $11.00 per hour. That’s not much different than taking a date to watch the movies, if you assume two hours of twenty-one play against buying a drink and popcorn at the theatre. When you consider the fact the movies are never going to pay you to watch them, playing a blackjack machine in a pub isn’t such a bad bargain.
Keep in mind our calculations only take into account the blackjack games. Roulette is going to have worse odds, though if you play roulette machines at the same bet level as the pokies, it’s still a much better option for players. Also, a lot of blackjack rules and variants exist. Some of them have worse odds, so know your game and know basic strategy, or the calculations above begin to fall apart–though playing blackjack without instruction is still probably a better option. The upshot is this: the Newcastle Herald‘s story misinterprets the facts. Virtual versions of blackjack and roulette are a much better gaming option than playing the pokies.
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