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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.

Oct. 13, 2009

Diversification of Income

This article is addressed to those of you who are successful at being a net winner in the casino. I don't know what percentage of my readers fit into that category, but today's column is for them.

Making money from video poker is a good thing. Making money from video poker AND something else is even better. Making money from three or more sources is better yet.

If video poker represents the bulk of your income, you are living a very small edge. Many players regularly operate on a half-percent edge or less. Having a losing year or two under those circumstances isn't unusual. If casinos pull good games or restrict your welcome, you are up a creek. All of us hope that there will continue to be suitable money-making video poker opportunities, but how can we know for sure? It's clear to everybody that the opportunities this year are different than those from last year or five years ago. Who can predict the future?

If we have additional income from other sources, then having a bad year at video poker is a disappointment, not a disaster. I've met players who get so angry that they froth at the mouth when another casino removes Full Pay Deuces Wild or slows the machines down. If that's your only source of income, such changes things can be very painful.

Some players have other casino skills -- perhaps blackjack, sports betting, live poker, or casino tournaments. Many of us don't have such skills, but that's relatively unimportant. Whether our additional income comes from the casino or not is relatively unimportant.

Some successful players still have a regular job. For most of these players, the money earned from video poker is a relatively small part of total income. The advantage of this is that you are insulated from many of the swings of video poker. The disadvantage is usually there is limited flexibility in when you can take advantage of video poker promotions.

Many successful players have retired from working. Having a pension and/or social security is a good source of income, if you're fortunate enough be set up that way. Stocks and bonds can provide passive income, but those of us in that boat have had a rather painful past year -- although things seem to be rebounding quite well now.

One of the principles of diversification is that the sources of income should be unrelated. That way, when one type of income is down, the other one might be up.

If you are currently in a position where most of your income comes from video poker, it isn't too late to diversify. The exact nature of the second source of income isn't particularly important. The important part is to have a second source. Even something as mundane as driving a cab ten hours a week makes a huge difference in diversification. If bad things happen in your video poker career, you're not up a tree.

For some reason this isn't a topic we talk about much in video poker. While there is no doubt that we need bankroll to play the game, for some reason it's assumed that we have that bankroll and we go from there. I believe that addressing this some of the time is important, if only as a checklist to make sure we're on the right path.