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The Intelligent Game

Video poker, the original skill game, has maintained its popularity for more than four decades

The Intelligent Game

Over the past few years, several slot suppliers have attempted to create a new niche in the market for “skill-based” or “skill-influenced” games. In the regulated market, these new types of slot machines offer players the ability to improve their chances by employing an element of skill, distinguishing them from the pure-chance nature of the traditional slot machine.

Skill on the slot floor, though, is nothing new. It has been available for more than four decades, in the form of video poker. As a game combining chance and skill, poker in machine form is older than the slot machine itself, having been seen in mechanical flip-card machines in late-19th century saloons. The version of machine poker for the modern casino, though, dates to the late 1970s, when Si Redd, an inventor and former pinball machine salesman working for Bally Manufacturing, developed a viable video version of the game.

Famously rejected by Bally for development and sale of the new game, Redd created his own company, originally called A-1 Supply, then Sircoma, and ultimately, incorporated in 1981 as International Game Technology.

By the time Redd incorporated IGT, his video poker was a hot new offering on casino floors. It was unique in that a strategy could be learned that would improve the player’s long-term return, known as return to player or RTP in the trade. Also, with a little research, players could tell by simply looking at the paytable whether or not they were sitting down at a high-return version of the game. Both factors were unique to the slot floor.

“Video poker in the Sircoma days was Jacks or Better,” notes Mike Fields, executive vice president of Action Gaming, a longtime partner of IGT in the production of new video poker variations.

“People liked video poker because it is the only game where you could actually influence the outcome of your gamble. It’s also the only game where you can see the price of the game, because the paytable is publicly shown. So as gaming markets matured and people test-played lots of different games, video poker has always grown in size and stature.”

Video poker also developed a devoted following very early on—a subculture, in fact, of devotees who have swapped information on where to find the highest-paying video poker.

IGT began renewing the video poker genre very early on, and in fact, has been reinventing the game consistently for the past four decades. These days, the company offers variations of the game numbering in the hundreds. But the evolution of video poker actually began not long after IGT was formed.

Bonus Poker to Multi-Hand

IGT’s first changes to video poker came during the watch of Bob Bittman, who joined the company in the mid-1980s after a career as a slot operations executive in Lake Tahoe. “Back then, it was a simple paytable,” recalls Bittman, who retired from IGT as executive vice president of product strategy in 2010.

Bittman notes that when he arrived at IGT, there was only simple draw poker, with paytables adjusted according to the RTP policy prevalent in the markets where the games were sold. The first change to this formula came with a custom game Bittman’s team designed for Binion’s Horseshoe in Downtown Las Vegas. “It was called Aces & Faces,” he recalls. “Four Aces was the top hand, and four face cards paid a 25-coin bonus.”

The new game was an unqualified success for Binion’s. Bittman’s team looked at the success of the Binion’s exclusive game and began to develop the video poker variants that are still the basis of the game’s variety to this day—Bonus Poker, Double Bonus, Double Double Bonus, Deuces Wild and the rest, most employing bonus payments for four-of-a-kind hands.

“Once we saw the success of the Binion’s custom game, we dove right into it,” Bittman says. “We did all these different permutations, and all those became the video poker standard. Multi-game machines came next, so you were able to offer players those variations on the same machine; people could choose their paytables.

“Then came Ernie.”

That would be Ernie Moody, a former Denver stockbroker who became part owner of the Gilpin casino in Black Hawk, Colorado, after which he began to attend gaming trade shows. A natural inventor, Moody began dabbling in development of new table games. He eventually would turn to the slot floor, and in particular, video poker, to become the main product of his new company, Action Gaming.

“For table games it’s much more difficult to get any traction with the casinos,” Moody says. “It’s a very difficult environment, and I tried for a few years to gain some traction. And then it came to my attention that there were about 150,000 video poker machines in the country at that time. I started thinking if I could come up with a new kind of video poker and just get a dollar or $2 per machine, and get 10 percent of the market, that would be a really good deal.”

Moody invented several video poker variations, but the one that showed the most promise was a concept that was both simple and ingenious—Triple Play Poker. Three face-down video poker hands would appear on the screen, and the bottom hand would be revealed on the deal. The player would pick the hold cards, which would appear on all three hands. The draw would then be conducted from a different deck for each of the three hands.

Triple Play Poker was one of several poker variations Moody had developed by 1996, but he knew the way to ultimately get them to market was through IGT, by then the undisputed king of the genre.

“I spent the better part of 1996 developing new kinds of video poker machines, and then took my ideas to IGT and met with Bob Bittman,” Moody says.

Actually, Moody made his initial appeal to Bittman at a Colorado golf tournament held for his casino’s customers, which Bittman attended. “I actually rigged the Colorado golf tournament so I got to play with Bob Bittman,” he says. “So I got to set up a meeting to show him my games.”

“I was a big video poker player back then, so I said, sure, I’ll take a look at your games,” recalls Bittman. “So, he came to Reno.”

Bittman says he was intrigued by Triple Play Poker in particular. “I looked at the game and said, who did the math on this? And it was a reputable (mathematician). I said, there’s no way this doesn’t pay back to the player more than 100 percent. He said, ‘No, we did the math. The base paytable that you use doesn’t change the math at all. It’s exactly the same.’

“I couldn’t get my mind around that, so of course, we had all these mathematicians, Ph.Ds. We sent it up to them. When we ran all the simulations and checked all the math, it was like Ernie said. So we said, my God, this is a firecracker. It ups the bet. It’s a whole new dimension for the game, and the most beautiful thing about it is the base game stays the same, so people are familiar with it.”

The first games went into Sunset Station in Las Vegas. “Verne Holmes was an executive at Station Casinos, and he became a really good friend and supporter of my mine,” Moody says. “When Triple Play came out, I recall he ordered 30 games for Station Casinos. And so that gave me a marquee client, which is really important when you’re trying to sell games.”

It wasn’t long before it was obvious the casino would need more.

“Triple Play hit the streets, and there were players lining up, fighting with each other to play the games at Sunset Station,” says Fields. “It was not uncommon for arguments and fights to break out when they first came out, because there weren’t enough games for people to play.”

Bittman took note immediately. Initially, Moody charged $5 per day per machine as a royalty, a fee he negotiated directly with the casino. By 1997, he was overwhelmed handling orders via a fax machine at his home. “It was such a big hit that we were now comfortable doing the administration of that billing and accounting,” Bittman says. “So we made a new deal with him.” Under the new arrangement, IGT would handle administration and collection of the daily fee—$15 per machine, of which Moody got the lion’s share—and Triple Play Poker was off and running.

At the World Gaming Congress in 1997, Triple Play had moved from Moody’s modest 10-by-10-foot booth to a prime location in IGT’s booth. It was the start of a partnership that has lasted to this day. The partners increased the number of hands—Five Play Poker, Ten Play Poker, all the way up to Hundred Play Poker. Eventually, the multi-hand format revitalized the video poker genre with a wealth of games in which a bonus is added to the basic video poker game.

“We’ve had an extremely longstanding relationship with Action Gaming, going on multiple decades now,” says Darnell Johnson, senior director of product management, video poker for IGT. “And the relationship has been very, very good. We collaborate very well. That relationship’s definitely changed and evolved over the years, but it’s only gotten better.”

Video Poker Culture

What’s also gotten better over the years is the culture surrounding video poker and its enthusiasts. There are no more dedicated players in the industry, and the fact of a common goal—achieving an advantage over the casino—has fostered communication, swapping of data on where to find the best games, and a wealth of available education on the strategies that will yield the highest return on each game.

Action Gaming’s Fields has been in the thick of the video poker culture for two decades. As Triple Play Poker and its derivatives took off, Fields joined IGT to form and run the portion of the supplier’s business dedicated to the video poker product. In 2005, he went to work for Moody, who had just acquired what has been the quintessential internet site for video poker enthusiasts, videopoker.com.

“We created videopoker.com to build a community where people could get online and talk among themselves, and could learn the ins and outs of video poker,” Fields says. “We could teach them to play video poker so they’d be more confident with their gambling dollars, and they would seek out our games.”

Videopoker.com is not only a free tool to learn video poker strategies and identify top paytables, but a forum to showcase new games before they are released. “Whatever game’s coming out from IGT, we put it out about a month or two ahead of IGT’s brick-and-mortar release so people can see it and play it online,” he says, “and then hopefully go and seek it out at the casinos. We also own videokeno.com, and we’ve got some keno games out there as well.”

All this has led to a group of customers who are among the most savvy in the casino, as far as seeking out the highest-returning paytables—known in the video poker community as “full-pay” video poker—and using strategy to gain an edge. Early on, shorthand developed in the community: Everyone knew, for instance, that a “9/6” Jacks or Better game, distinguished by single-coin payout of 9 for the full house and 6 for the flush, is the full-pay version, returning 99.54 percent with perfect strategy.

The high returns also have led to reluctance among many slot operators to offer those full-pay schedules. There are casinos that don’t even offer video poker because of the low hold. There are many others who offer the lowest-returning versions—a 7/5 Jacks or Better, a 6/5 Bonus Poker, etc.

Tourist markets like the Las Vegas Strip typically offer the lowest returns on video poker. Other markets, like Atlantic City, offer mid-level returns but make up for it with a lot of variety.

“Currently, Bally’s Atlantic City does not offer any ‘full-pay’ poker titles, but we do offer 130 poker machines, with 25 percent of those being leased Action Gaming titles,” says Frank Policastro, executive director of operations for Bally’s Atlantic City.

“In the Atlantic City market, we have seasoned players as well as first-timers trying their hand at our poker product. Based on that and not having full-pay deployed on our gaming floor, it intends to even out at the end, and we see holds that are closer to what the game is set at.”

Other operators are insistent on offering the highest returns, or close to it, in their video poker product, considering that volume, player loyalty and the abundance of unskilled players trying their hands even out the low hold on the best pay schedules.

“Video poker players tend to play four or five times a week,” notes Fields. “So the volume is higher in many cases than slots. That’s why with the lower RTPs, they can make as much money as they do.”

Buddy Frank, who ran slots at Reno’s Atlantis and was the longtime vice president of slot operations at California’s Pechanga Resort, is one of the operators who was dedicated to offering high returns in video poker.

“I was a little different than most of my colleagues,” Frank says. “I always wanted to offer the loosest video poker that was available. In California, you could never go above 100 percent like in Nevada, but you could offer loose poker.

“To me, offering 7/5 poker is like having a produce department in a grocery store only offering rotting fruit. If you’re going to offer poker, you should have a good paytable. If you really believe that argument about (low hold on) video poker, then you ought to strip out all your 21 games and all your craps tables. Because they don’t hold much better. But operators don’t, because it’s a product your guests want.”

Frank notes that although a game has a 99.54 percent optimal return, not a lot of actual players are achieving that. “That’s the hold percentage if (video poker pro) Bob Dancer played your game,” he says. “He would play at 99.54 percent. I would bet you and I are not at his level.” He says fairly skilled, frequent video poker players are more likely “to play that game at 98 percent or 97.54 percent. The average player who doesn’t play poker is going to play that game at 95 percent or even 94 percent. So there is a balance.”

Frank adds that in the current environment, where operators are tightening up their offerings by removing underperforming games from the floor, offering high returns in video poker makes sense. “If you don’t have any of that product, you won’t have that customer,” he says. “A lot of people mistakenly think I’m going to get rid of my 2 percent pokers because the hold’s so low, and put in a higher-holding video slot. They’re not the same customer. You just won’t have that customer.

“If a player comes through and can’t find the games he wants to play, he leaves. Don’t just evaluate a good or bad game on the win per day. You also want to look at the handle-pulls. And that’s where video poker always does really, really well. It’s just a popular game. If you take your pokers off the floor, you’ll simply lose that customer.”

And Frank notes that having that customers is a great benefit to the casino. “Video poker players are a little different; they’re there for time on device and entertainment,” he says. “And they’re an important part of the mix in the casino. They shill the casino with activity. They provide tips for your cocktail staff and your restaurants… It’s a revenue stream you wouldn’t get any other way.”

Frank estimates that overall hold on video poker where the best paytables are available varies a little with the market. “If I was at a house where they had a lot of pros, like the Atlantis in Reno, my hold would be about 2 percent better than optimal,” he says. “But at a place like Pechanga where there weren’t a lot of video poker pros, I’d hold 3-4 percent better than optimal.”

The lower hold compared to slots, he says, is more than compensated by the frequency of play. “(Important) evaluators of guest strength are recency and frequency. You’re not going to find anyone with a better recency and frequency than a video poker player.”

He says the proviso to offering high returns in video poker is to balance out the comps. “The pros calculate in those comp balances. You can’t have a half-percent poker and give 4 percent comp rewards. I always balanced it out.”

Some operators in the top local casinos offer the highest returns and the same comps as the slot floor. Cliff Paige, slot director at the South Point in Las Vegas, is one of those. “I’ve seen more and more where it’s costing you more to earn a point on video poker than it is on a video reel machine,” Paige says. “We don’t do that here. We just believe everybody deserves the same.”

The South Point offers some of the highest returns in video poker to be found anywhere. Like Frank, Paige says the majority of semi-skilled and novice players more than outweigh the few advantage players. “There are a lot of people who just can’t grasp optimal play, and that’s really the majority of the public,” he says. “So you still end up with a decent hold, even on a 99 percent game. It’s still a very profitable game.”

Paige adds that offering variety in video poker also is important. “There are well over 800 video poker games at South Point,” he says. “And that’s boxes. There’s just a huge variety. And some are more volatile than others; that certainly accounts for the hold too.”

Variety also means a good inventory of progressive video poker machines. While paytables are normally adjusted slightly downward, the chance at a progressive jackpot keeps the overall return high.

Nowhere will you find a better lineup of progressive video poker than at the Downtown Las Vegas properties owned by Derek Stevens. Expansive video poker bars at the Golden Gate, the D (the “Longbar”) and the new Circa (the “Mega Bar” and “Overhang Bar”) are all linked to one progressive jackpot.

“On our video poker link, we have upwards of 100 machines so far,” Stevens says. “So, our progressives can motor along pretty quickly.”

A $5 link seeded at $20,000 recently hit at the Circa at a record level close to $33,000. Stevens says that level of prize draws incredible volume of play. “There were groups of players who came in, 10 people to a team, and they made the determination they weren’t leaving until they hit it,” he says. “And they got it.”

At Stevens’ properties, video poker is all about the experience. “We try to blend very good paytables with a great consumer experience,” he says. “We’re pretty liberal on the free drink component, and pretty great as far as the interaction with bartenders and the backdrop.”

Reinventing Video Poker

IGT, meanwhile, continues to reinvent the game of video poker, with a parade of new titles both from its internal team and from the partnership with Action Gaming.

“It has a lot to do with the really talented folks we have working on our video poker team, on both products and content across the board,” says Ryan Reddy, senior vice president, global payment systems, VLT and poker for IGT. “But the big thing is that we have stayed true to our roots—what’s made us successful. We’ve stayed and we’ve built on that, and we continue to innovate.”

That parade of new titles consists of inventive new games that each add a bonus—multipliers, extra hands, wild cards—to the basic video poker game. What distinguishes these bonuses is that nothing is taken from the basic paytables. In the past, many specialty video poker games flopped, because savvy players noticed that the bonus was paid for by reducing the basic paytables. Not so with the IGT titles. The bonus features are funded through an extra per-hand wager ranging from a single credit to five credits.

It’s like a side bet on a table game, but unlike tables, these side bets do not increase the house advantage.

“That’s the transparency that IGT video poker has always had,” says Brad Fredella, senior product manager, video poker content for IGT. “Transparency is the ability to look at a paytable and very easily math it out. You can put it into an app or you can look it up online easily, and you can tell exactly what the RTP is. So when we bonus a poker game, we’re always very cognizant to make sure that we maintain those base video poker paytables for for the first five-coin bet, and then any amount that you have to bet over that for the bonus.

“One of the worst things you can do in game design is reduce the payback to the player as the bet level increases,” Fredella says. “So we make very sure not to do something like that.”

“We make sure we remain very faithful and true to our core players, and continue to give them a wide variety of offerings,” Reddy says. “When it comes to to poker players, they are very unique, in regards to their expectations and their behaviors. They are very loyal players. We want to make sure that we continue to give them that same experience that they are used to, but also provide more volatility at times, as well as more interaction at times to continue to pique their interest and grow that audience at the same time.”

Some of the most famous specialty games are Super Times Pay, and the family of titles under the Ultimate X brand. Ultimate X, which adds random multipliers to various hands and, in the latest versions, to several hands, is the video poker variation of which Moody says he is most proud.

The three most recent additions to IGT’s specialty poker lineup are Lucky Suit Poker, out in casinos currently, and two others expected in the coming months, Bonus Wild Poker and Poppin’ Multipliers.

Lucky Suit Poker offers a simple proposition: For a five-credit side bet per hand, the player selects a “lucky suit” at the start of play. If the first card dealt is in the lucky suit, a random multiplier up to 12X is applied to all wins on that hand.

In Bonus Wild Poker, also with a five-credit side bet, on random hands, a wild card will be added. The inclusion of wild cards means there is an extra winning hand—five of a kind. This returns more than the royal flush—4,700 credits at max bet.

Poppin’ Multipliers, slated for summer release, utilizes a three-credit side bet. On the deal, a random multiplier of up to 10X can be won, applied to all hands in play. If no multiplier appears on the deal, random multipliers can appear on the draw for any of the hands in play.

While these games will be offered in upright versions, a lineup of multi-hand specialty games is available on IGT’s hottest new hardware, the PeakBarTop, a bartop unit completely redesigned to offer the best viewing angles and a host of new operator and player features. “The response to the PeakBarTop has been really positive across the board,” says Reddy. “It’s performed very well. Demand is extremely high, and we attribute it to the diversity of content that’s available. It’s attracting new players, and the more experienced players are still enjoying their favorite games.”

The next hot format for IGT in video poker is one that is destined to keep the genre going as new, younger players enter the casino demographic. The CrystalFlex cabinet and PeakBarTop with sports betting, both expected to go live later this year, will add another dimension to video poker—the ability to bet on sports and view games while continuing a favorite video poker game.

“We see this as a huge opportunity to bring in incremental players,” says Reddy. “Sports betting is really taking off, especially in the U.S., and now we’re providing an opportunity for the sports betting player to sit down and bet on sports on that specific gaming machine, either at the bar with the PeakBarTop or with the CrystalFlex upright.

“From our perspective, that is a major potential lever for us to bring in incremental players, because we’re taking advantage of the enormous new opportunity in sports.”

There have been a few attempts, but no other supplier has come close to cracking the market for video poker that IGT has dominated for more than four decades. IGT’s Johnson says to expect the parade of new titles to continue.

“Every one of our games goes through some level of research, whether it be customer feedback or intensive play methodologies,” Johnson says. “And, these games, thankfully, continue to have affinity to our core base. But they also have affinity to an expanding base outside of that. So it really helps us continue to evolve.”

The inclusion not only of sports betting, but IGT video poker titles on various for-money online sites, is adding new players.

“We’re optimistic about the long-term health of video poker,” says Reddy. “We see it as a really a great business to be in, and it’s a really attractive product for players.

“Players really enjoy the blend of skill and chance that they get with video poker. And, in terms of long-term health, iGaming will provide some synergy, and introduce new players to video poker. We have great people working on the product, and wa have a great process, built on focus groups and research, and building off of what has made us successful, but also focusing on innovation going forward.”

Frank Legato is editor of Global Gaming Business magazine. He has been writing on gaming topics since 1984, when he launched and served as editor of Casino Gaming magazine. Legato, a nationally recognized expert on slot machines, has served as editor and reporter for a variety of gaming publications, including Public Gaming, IGWB, Casino Journal, Casino Player, Strictly Slots and Atlantic City Insider. He has an B.A. in journalism and an M.A. in communications from Duquesne University in Pittsburgh, PA. He is the author of the books, How To Win Millions Playing Slot Machines... Or Lose Trying, and Atlantic City: In Living Color.  

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