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Casino Probability and Payouts

April 23, 2010

In online casino games, players place wagers on an event taking place. If in the game that event takes place then the players received a payout. A fundamental rule in online casino games is that the lower the probability of an event taking place, the larger will the payout be. For example in roulette the probability of a specific number being called is much less than the probability of any red number being called. Therefore the payout for a specific number is 35 to 1, whereas the payout for any red number is only 1 to 1. Similarly in slots the probability of getting five identical symbols on an active payline is much less than the probability of getting three identical symbols on an active payline. Therefore the jackpot payout of getting five identical symbols is much higher.

When online casino software developers innovate and make changes to existing games they offer events or situations that are more likely to occur. New players may sometimes mistakenly believe that such games offer higher returns. But in fact there is nothing like a free lunch. When events are offered that give the player a greater opportunity of success the payouts are somehow toggled so as to keep the overall return to the player in check. Take the example of Deuces Wild video poker. In this game all twos are treated as wildcards and can substitute for any other card in order to form a winning combination. This obviously increases the probability of drawing winning combinations. But the playing field is leveled by removing certain winning combinations from the payout table. In the original Jacks or Better video poker game a pair of jacks or higher pays out at 1 to 1. Also two pairs pays out at 2 to 1. In deuces wild neither of these combinations have any payouts.

In standard blackjack games players can see only one card of the dealer and have to make their decisions accordingly. Some online casinos introduced a blackjack variant called Double Exposure. In this blackjack variant both the dealer’s cards are dealt face up. Since the player has more information he can better fine-tune his moves and has a higher probability of winning. Again the playing field is leveled for the online casino by reducing the payout for blackjack. In normal games blackjacks at paid out at 3 to 2, but in Double Exposure blackjacks are paid out at only even money.

This does not mean that such games are better because they offer higher probabilities of success or they are worse because they offer lower payouts. What needs to be checked is whether the penalty applied is commensurate with the benefit provided. Unless the overall returns to the player are reevaluated it is not possible to arrive at the judgment on the changes made. Jacks or Better offers the return of 99.54%, whereas Deuces Wild offers a return of 99.96%. Therefore obviously the reduced payouts in Deuces Wild to not completely negate the benefit of increased probability of winning and thus Deuces Wild is a better game. On the other hand the reduced blackjack payout in Double Exposure more than negates the advantage of seeing both the dealer’s cards and therefore Double Exposure is disadvantageous for the player as compared to standard blackjack.

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