Progressive Jackpot is a jackpot (highest payoff)
for a gaming machine, where the value of the jackpot increases
a small amount for every game played. Often, a set of gaming
machines is linked to one progressive jackpot.
Progressive Jackpot Meter
The amount of the jackpot is shown on a meter
as a money value. Usually, the jackpot can only be won by
winning the combination with the highest payoff, e.g. a royal
flush at a video poker game or five of the most valuable symbols
(lemons, cherries, alligators, it could be anything) on a
slot machine. Once a player wins the jackpot, the jackpot
resets to a preset minimum level.
The amount on the jackpot progresses (increases)
a small amount for every play on a connected machine. The
amount that the jackpot advances by is set by the casino or
other machine owner ("the house"). For example,
on a machine whose house edge is 5%, a generous jackpot contribution
might be 1% (one fifth of the expected profit). The house
is prepared to contribute some of the profit of a jackpt linked
machine because players are attracted by the:
- relative novelty of progressive jackpots
(generally, only a small fraction of the house's gaming
machines will be connected to a progressive jackpot)
- the constantly changing meter, often displayed
on large, fancy LED displays
- eventually, the large amount of the jackpot
will induce more players to play the game.
Qualifying
Usually, only players playing maximum credits
per play will qualify for winning the jackpot. All players
(regardless of the number of credits per play) will contribute
to the jackpot. As a result, a game that requires 10 credits
to qualify for the progressive jackpot will tend to have the
progressive jackpot rise to higher levels (relative to its
break-even level) than a game that requires only 5 credits
per play to qualify. For example, many players who find themselves
playing three credits per play might reason that five credits
per play is not much more than three, so why not play five
and qualify for the much higher jackpot payoff. However, there
is a much bigger gap between 3 and 10 credits per play, so
at a game where 10 credits per play are required for qualification,
more players will stick with 3 credits per play, and contribute
to the progressive jackpot without ever winning it.
The break-even point
In some games such as video poker, it is possible
to compute an optimal play stragegy, and hence the frequency
for each payoff, including the frequency of a jackpot. From
these the break-even point can be computed. At reset and when
the progressive jackpot is less than the break-even point,
there is a negative expected value (house edge) for all players.
When the progressive jackpot is at the break-even point, the
game is fair. (If the qualifying player were to play an infinite
number of games, s/he would break even). When the jackpot
is above the break-even point, then the game has a positive
expected value for the qualifying player. In other words,
if the player were to play a very large number of plays (several
tens of thousands for a typical game), it would become more
and more likely that s/he would make a profit. Whether a profit
is realised or not is of course a matter of chance, but the
more plays made while the progressive jackpot is higher than
the break-even point, the more likely it is that the player
will end up ahead.
Player advantage
Unusually, a player that chooses only to play
when the progressive jackpot is higher than the break-even
point, is still making money for the casino, and so is welcomed
and may earn complimentary gifts. Consider a game with a 5%
house edge, and a 1% progressive jackpot contribution. This
game is 4% in favour of the house. What happens is that the
one percent jackpot contribution is "saved up" in
a sort of account, to be won by a lucky or skillful player.
The mechanics of the jackpot ensure that while some jackpot
winners will be taking home more than they put into the machines,
any amount that they win over an above a four percent loss
is made up from the jackpot "account".
An example may make this clearer. Suppose the
game has percentages as above and the jackpot resets to $5000.
Each credit is $1, and five credits are required to qualify
for the jackpot. That means $5 per play to qualify for the
jackpot. From the house's point of view, 4%*$5 = 20c is profit,
and 1%*$5 = 5c is contributed to the jackpot. Let's say the
frequency of the jackpot with perfect strategy decisions is
1 in 50,000. That means that the player will bet 5*50,000
= $250,000 on an average game cycle. Because the base game
has a 5% house edge, the player will get 95% of that back,
or $237,500, in payoffs ranging from nothing to getting his/her
money back to the $5000 minimum jackpot payoff. A further
$0.05 * 50,000 = $2,500 is contributed towards the jackpot.
The average cost of buying a jackpot is $250,000 - $237,500
or $12,500. Hence the break even point for this game is $12,500
+ $5000 = $17,500. Note that without the final jackpot payoff,
the return is worse, such that you'd expect to be $17,500
behind (down 7%) when you won the $5000, to be $12,500 behind
at the end (down 5%). If the jackpot is $17,500 on a perfectly
average cycle, you would expect to be $17,500 down just before
hitting the jackpot, and you would break even after the jackpot.
If the jackpot was say $23,000, then you'd expect to be ahead
by $23,000 - $17,500 after an average cycle, or $5500 ahead,
for a $5500/$17500*100% = 31.4% return on your expected $17,500
investment. Of course, it might take 2 or 3 or 5 times as
long as average to win a jackpot (costing the player a lot
of money); that's why it's called gambling. There is also
a chance that the player will win the jackpot in fewer than
the expected number of plays ("it might come early").
Let's take the $23,000 winner case. Joe makes
his $5500 and is happy with the month's work. But Joe only
played 50,000 games, contributing only 1% * $5 = $0.05 per
game. That's a total of $2500. In order for the jackpot to
progress by $12,500, other players must have played games
totalling $12,500 - $2500 = $10,000. Most likely, it wasn't
200,000 plays at $5 per play, because on average the jackpot
goes off every 50,000 plays. More likely, there were almost
a million plays by people playing mostly $1 per game, contributing
their cent each to the jackpot, but not able to win it. Let's
say it was a million plays at $1 each. Of that million plays,
about 20 received the highest payoff (say $800 for a royal
flush), but even with all those payouts, the house still got
its 4% edge (5% for the base game, less 1% for the progressive
jackpot). So the way to look at it is this: the house still
made $10,000 off Joe ($12,500 less Joe's own jackpot contribution
of $2500), made $50,000 from the other players, but kept $10,000
of that in the jackpot "account" for Joe to win.
So while the house made $12,500 from Joe and $40,000 from
other players, Joe made $5500, because he had the $5000 reset
jackpot amount (part of the house 5%), plus the $10,000 from
the other players, and the $2500 of his own jackpot contributions,
to offset the "cost of buting the jackpot" ($12,500),
for an overall profit of $5500. When you think about it, the
house is organising for other players to pay Joe, via the
jackpot "account".
Savvy gamblers are aware of this, and sometimes
organise groups of players to play machines where the progressive
jackpots are favourable. Such teams can sometimes displace
ordinary players, making the machines unavailable jusst when
they are at their most interesting. As a result, some casinos
have a policy of "no team play", and will eject
players suspected of playing in such teams.
|