the truth behind poker machine mathematics

Poker machines are unique in the gambling world. They are the only form of gambling that has been designed and crafted for the purpose of making money, and where there is absolutely no chance of influencing the outcome. Cards, horses, roulette, sports… with all of these, there are decisions that can be made about what sort of bet to make, who to bet on, what the chances are. These decisions influence the end result. With poker machines, you push a button. That’s it.

But, I hear some of you say, at least poker machines aren’t that bad. They have a guaranteed return-to-player percentage which is pretty high, don’t they? Well, yes… and no. It is true that, by law, poker machines in Australia have to return somewhere between 85 and 90%, over time, to the player. This might seem like a good thing, but it’s not. The reality is that today’s poker machines can satisfy this requirement while still bleeding the public dry. The reason for this paradox? Poker machine mathematics.

Let’s take the case of a stereotypical poker machine player. Meet Gladys, a resident of the Happy Valley retirement home. Every week, on pension day, Gladys hops on the mini-bus with her friends and heads off to her local club for a “bit of fun” on the pokies. She likes it there, the young staff are lovely and helpful and it’s a welcome change from the home. Besides, you never know… she just might win.

So Gladys settles down in front of her favourite game, pulls a $20 note from her purse and gently feeds it in to the machine. It’s a 2 cent machine, with 50 lines, so that’s a dollar a game. There are multipliers, but Gladys doesn’t like those. They’re for the big spenders.

Gladys likes to take her time and enjoy the day. She watches the reels spin and, once they’ve stopped, she likes to look at the end combination and see how close she might have been to a big win, or work out which lines she’s won on. She doesn’t play fast; maybe 10 games a minute, which is pretty slow for a poker machine. Pokies will let you play between 20 and 30 games a minute, depending on which state you live in, but Gladys likes to play slowly. So 10 games a minute it is.

Gladys plays, and plays, and plays. She stops for a bit of lunch, which is put on by the retirement home; this is their day out after all. She also takes a short break for a cup of tea, but then it’s back to her machine. She chats a little with her friends, who are playing nearby, but for the most part she’s watching her machine.

By the time the bus is ready to go back to Happy Valley, Gladys has spent about five hours playing “her” poker machine. Over and over again her hands have gone back to her purse to pull out another $20 note and feed it in to the machine; they all add up. She’s spent $300 today, and that’s her pension gone. A little dazed and a little sad, she climbs back on to the bus and heads back to the home… to wait for next week.

This is a familiar tale, but there’s a catch. As mentioned earlier, it’s common knowledge that poker machines have a return-to-player percentage of anywhere between 85 and 90 per cent, depending on where you live and what kind of establishment you’re playing in. For the sake of the story, let’s assume that Gladys’ poker machine was set to 90%. That means that over a long period of time, the machine will return 90% of money gambled to players, and keep 10% as profit.

But wait, I hear you cry. Gladys didn’t lose 10%; she lost it all! Well, no… not according to poker machine mathematics. The rule is that the poker machine has to return 90% of money gambled… not money inserted. And there’s a huge difference.

Gladys played for five hours. She played 10 games a minute; that’s 3,000 games over five hours. 3,000 times that Gladys pushed that little button. And each time she did, she bet a dollar. Sometimes she lost, and sometimes she won; those winnings allowed her to postpone the next $20 just that little bit longer. But by the end of the day, by poker machine mathematics, Gladys had gambled $3,000 in one dollar increments.

Here’s the sting. According to the poker machine, $3,000 was gambled, and $300 (all of Gladys’ money) was kept. That means that the machine paid out $2,700… which is the 90% return. I’m sure Gladys will be pleased to hear that as she sits in the retirement home, waiting for the next pension day.

Those who defend poker machines often point to the high rate of return as one of the reasons that pokies are just “good, clean fun” for most people. The reality is that every poker machine can meet this “rate of return” requirement while still leaving the gambler broke. That’s poker machine mathematics.

One thought on “the truth behind poker machine mathematics

  • April 28, 2011 at 3:45 pm
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    Very good point Cyenne….exactly why ALL poker machines need to be used only by registered players. Then ALL consumers could have these ‘maths’ points fully explained as part of a consumer warning pack that would then be given to all , before they ever used pokies….before any became addicted.

    I wonder if Gladys would show up in the “problem gambler’ stats? I much doubt it. She would still be cared for at the nursing home so could survive without extra money…but she would still have a budget “problem”…does it make her one of those “irresponsible deviates” who succumb to pokies…yet are never counted because they can fly under the radar? Probably. We just never hear about it.

    Now if we had MANDATORY registration, MANDATORY pre-commit and MANDATORY provision of transaction records, poor Gladys’ family might have been able to step in and give her the support she might need, much earlier. Gladys might have been able to help herself to stop gambling earlier, at say $100? She might have socialised at the club with others as well as use the pokies…and could have had a really happy day out all around! With $200 to take home for another few outings.

    Just shows how much the ‘fun-filled’ pokies stories are very different to real life! I also disagree that MOST pokies users are ‘recreational’. We do not know. as that group has never been identified and counted. It is all a ‘smoke and mirrors’ show. We hear a snippet, imagine the rest then by repeating it we believe it.

    Studies say that over 50%-90% of pokies gamblers regularly over-spend and that is NOT safely ‘recreational’. That spending IS out of control, when it blows the budget on a regular basis. It is a worry rather than fun to overspend often and is IRRESPONSIBLE ….SO where exactly are the ‘majority of people who just have fun at the pokies’? WHO are they? We never truly see them it seems, as a group. We just hear of the ‘pathological gamblers’ who hit the wall and imagine that everyone else is fine.

    If it really were only a trifling small few that had pokies gambling problems…WHY are over 80% of Australians whenever they are surveyed and polled…so worried about a group they probably rarely hear about? That level of concern does not add up to me as much as the fact that lots of people are hiding a lot of pokeis problems.

    The stats are wrong…we are listening to a lot of made up stuff and now, looking at most people in a pokies venue…very few are ever having the fun we are told about.

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