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Bob Dancer writes a video poker column for beginners to experts. He also writes a column with Jeffrey Compton, "Player's Edge", featuring information on promotions at various Las Vegas casinos. Player's Edge is published each Friday in the Neon section of the Las Vegas Review-Journal. Click here to send Bob Dancer an e-mail.

For more details and a schedule of Bob's free classes, visit www.bobdancer.com.

May 17, 2009

Taking the Money Home

(Note: this article was written before the Gold Coast changed their requirements to receive mailers, which became effective in March. While that affects how much people need to play at that casino to receive certain benefits, it doesn't change the basic premise of this article.)

I have a friend, Gregory, who plays a lot of (mostly 25¢) video poker at Las Vegas locals casinos. He also keeps very good records. Many of these casinos send out regular free play in the mail. At Gold Coast and South Point, for example, he receives four $50 free play offers a month. At Palms, Orleans, Eastside Cannery, and Sunset Station, he receives smaller mailers. Today's discussion concerns the money generated by the mailers.

He asked me how I recorded the money from these mailers. I told him I recorded face value. If I'm going to be playing at South Point, for example, and today I receive $50 in free play, I'll load up the machine with $950 in cash in addition to my free play and treat it as if I started with $1,000. If I lose all of that, my records show +$50 in the "free play" column and "-$1,000" in the "daily results" column. The "net", of course, is -$950. If I cashed out for $2,500 instead, my records would have +$50 and +$1,500 in those same two columns, for a "net" on the day of +$1,550. My scores go up and down, but free play is always plus.

I understand that $50 in free play is not exactly the same as $50 in cash. I have to play free play through at least once. Sometimes the $50 turns into $0, but I've also hit 4-of-a-kinds and royal flushes while playing free play. Since I'm playing games that return very close to 100%, whether I record the "actual" result or the face value doesn't matter very much.

Gregory records things differently than I do. That's certainly not a crime. There are many ways to do this and while the IRS does give some guidance, a whole lot of wiggle room is out there. (I am not a tax expert. I don't offer tax advice. If you send me an email requesting such advice I'll send you a polite note telling you I don't do it.)

Gregory prefers to record the actual result of playing his free play rather than face value. (I have no problem with this.) He also prefers to play his free play at the end of his visit to the casino. (I have no problem with this either. Clearly this is personal choice.) Gregory believes that "taking the free play money home" with him adds significantly to his bottom line (I have a big problem with this. That's what the rest of this article is about.)

Gregory notes that he played his free play at the end of his casino visits throughout 2008 and it's been his best gambling year ever. (Congratulations, Gregory!) He cashed his free play at the beginning of his plays in 2007 and he ended up with a (small) losing year. (He's not the only one.) He's convinced that taking the money home is a big reason for the turnaround. (He's wrong.) When I talk to him about his "theory," he exclaims that "It's not a theory. It's a fact!" (He's still wrong.) (My theory as to why 2008 was better for him than 2007 is that he's a better player today in both the play of the hands and the game selection, and secondly there is a luck factor. Getting slightly more royals than you're "supposed to" can make a big difference over a year compared to getting slightly fewer royals.)

Gregory plays rather fixed amounts at each of the casinos. At Gold Coast, for example, playing $60,000 between the 16th of last month and the 15th of this month gets you the top mailer for next month. (Remember --- this is the old rule. Today's rules are much different and not as player friendly.) Each casino has its own formula. Gregory has learned all of these formulas that are fixed. (Palms, for example, doesn't publish its formula and it's always a guess as to how much to play.)

Gregory keeps accurate records and so he always plays between $60,000 and $60,100 a month at the Gold Coast. He plays on multiple point days. His experience is that when he plays his free play early, he loses it. When he takes it home, he takes home however much he was able to turn that free play into. So, he argues, it's better to take your free play home rather than to stay in the casino and lose it.

But that's not the way it works. He's going to be playing $60,000 a month whenever he plays his free play. If he plays it early and earns, say, an additional 500 points while he is "losing" his free play, that means he has 500 points less to play later in the month. Whether he takes the money home or not, he still has to play the entire 60,000 points in the month. Whether a specific $50 spent last night in the casino's coffers or in Gregory's safe at home is irrelevant.

Gregory has been to my classes where I say that each session is more likely to be a loser than a winner. Somehow in his mind this is more relevant when he cashes his free play early than when he takes it home with him. It's really all the same. That casino is giving him $200 ammunition a month and he needs to play a total of $60,000 through the machines. When he does this within the month is irrelevant. Whether he plays the free play first or last is irrelevant. Whether he takes the money home with him periodically or not is also irrelevant.

I suspect that Gregory will never agree with me about this. That's okay. His way doesn't hurt him financially at all (nor does it help him) and if it brings him piece of mind, there's nothing wrong with that.