When the Game Goes Down

In my extra bedroom I have a hand painted ceramic picture that has been passed down through the generations. The picture shows a group of four guys standing at a bar and has the caption “Waiting on a Live One”. The idea is that the good players are not interested in playing against one another. They work together to take the money from the live ones. There are going to be times in your life when it absolutely does not make sense to continue playing in the game you are in.

The real question is what you should do while you are waiting for the game to improve. I prefer to read and try to distract myself. There are times when I do not know the line up when I will sit nearby and watch the game. I try to study how players play and learn the patterns and tendencies that they have. If there is no game at all, I like to sit with other players and talk about poker.

Over the years a couple of these late night discussions have led to productive problem solving sessions. I always like doing statistical analysis and given enough time and enough excel spreadsheets I can usually come up with an answer. Questions include, how many perfect shuffles before you have returned the deck to its original position? What are the odds of making a bingo in four numbers? 0.000003 What are the odds of a bingo in nine numbers? 0.000473 What are the odds of a bingo not being possible after nine numbers? In a heads up game of Texas hold’em can the player in the lead going to the river be the underdog? Give an example? How many players and what hands are required for a player to be drawing dead pre-flop? What hand is the best draw in 9/6 Jacks or better video poker? What is the value of that draw on a quarter machine? How many starting hands in Hold’em? 169, 13 pairs, 78 suited and 78 off-suit. What are the odds of being dealt kings? 1326/6=221 When somebody else has aces at a ten handed table? 1225/6= 204.2/9=22.78 The heads up starting hand challenge where the first player can never win; what are the three hands you offer to the player?

I should offer the above questions in the form of a quiz and the first person to respond with correct answers wins an autographed book.

The starting hand challenge was particularly educational. This was a game we would play while we were waiting to get a full ring game started. The way we played was everybody throws in one dollar per hand. We deal face up two card starting hands and deal one more hand than the number of players. Whoever has the first choice picks his hand. We go in order until all the hands are picked except one. We put up a board flop turn and river and the pot goes to the best hand. If the unpicked hand is the best, the pot is a carry over. There is more strategy to this game than people think. After thousands of hands, I assure you that skill wins out in this game. The analysis is so complex that even the sharpest are reduced to an educated guess. When playing heads up and offered AK, 84, and 22. The first choice is obvious and so is the second choice. The reason we added the carry over rule was the following scenario. AK, JTs, 22 this hand without the carryover would always offer the second choice an advantage. In heads up play JTs is favored over 22. AK is favored over JTs. 22 is favored over AK. The classic rock paper scissors scenario. The carry over rule makes the 22 far less desirable.

The bingo questions were all the result of a nationwide progressive bingo game called bingo mania. The game featured progressive jackpots that were finite and calculable. After a few nights of observation and way too much time on my hands, I decided to take the challenge and solve the game. I was the rare person with the $3000 personal computer at home. I had DOS based software including hold’em analyzer. Black Paul is married to a computer professor at the college and also has a computer at home.

Microsoft Excel became my weapon of choice. In a couple weeks I was able to solve the game and know exactly when it was appropriate to play. Yes the game could become an overlay. Would the game be an overlay often enough to make it worthwhile to observe and play? More analysis. More assumptions. I made tables to show the parameters and when it was correct to play. I had calculated a return rate of $15 per hour. I would play for $15 per hour. Paul would play for even less. Typical engineer, my assumptions and calculations were conservative. I should have been playing more often. Paul was playing using my guidelines and playing more hours.

Over the next six months, I paid for my computer. Paul bought his wife a new Saturn. Most of the poker players knew we had figured out a system to beat the game. Soon all the bingo machines were occupied by the poker players. The thing that really stood out is that we only played about 10% of the games. We would sit and talk, drinking free sodas, until it was time to play and we would all jump in when it was profitable. The game lasted six months and the end came suddenly.

An accountant somewhere in the Midwest noticed a variance, the game was operating in 70 casinos nationwide and was profitable in all but one. For six consecutive months EVC had recorded significant losses. A representative made the trip to Crescent City. Had he known that Crescent City is at the end of the Earth, he may have done something different. The representative met with the General Manager, and the GM assured him that everything was on the up and up. The players have a system. The laughter was real and tangible. After a few seconds, they looked at each other wondering if a system were possible. The rep assured the GM that the players had won six months in a row. “How much?” “Over thirty thousand last month.”

The GM began to think a little more and decided maybe a system is possible. The GM told the rep, “you need to go talk to Victor.” Terry Westrick, General Manager, is a personal friend of mine and I know that he will always look after me and make sure I don’t get killed. Terry called me and asked that I come in for a meeting. “Victor, they need to hire you.”

They offered me a thousand dollars for an hour of my time. Consulting is a good business. I hated to spill the beans. On the other hand, I knew the end had arrived. This became my way to exit gracefully. I pulled my little color coated laminated chart out of my inside jacket pocket and sold for $1000 a piece of paper that I had sold many times for $20. They wanted to know where the chart came from. I smiled. The rep looked at Terry and said, “What did we pay for?” Terry, smirking and giggling “He made it.” The looks were incredulous. “He is an engineer.” I told him that I have all the calculations to back it up at my house. “Can I have my engineer’s call you?” You pay me a thousand an hour, I will tell you what you want to know. They unplugged the games, which I expected.

Paul and I made a road trip to another California casino that had the game and was only 450 miles away. The games were unplugged there also. They took the game off-line nationwide. The game was down for two months and came back up with different pay structures and a much slower nine ball bingo progressive. I calculated the new game and it could be beat. I figure you can make almost three cents per hour. Even with free soda this seems to much like work and not enough expected value. Nobody would play the machines at EVC. A couple months later the machines were gone.

I had figured out a way to make money and I could have kept it to myself and made hundreds of thousands of dollars. I gave away my hard work and let others benefit from the opportunity. I was also able to escape the scam without any physical harm. No matter how legitimate your system may be, always consider your exit strategy before you take money from others.

A year later, Paul came to my house with another idea about a game that could be vulnerable. Paul had been commuting to Trinidad, 60 miles each way, to play a bank of video poker machines that were quarter 9/6 Jacks or Better with a 1% progressive meter on the royal flush. This game has been studied to death and plenty of books detail the strategy and return on the machine. At the start with the royal flush at $1000 the machine returns 99.54%. When the progressive reaches $1060, the machine is over 100% and becomes profitable to play. The progressive meter would often go up to $2000 and leave the machine over 105%. A good player can run $1000 per hour through the machine making your EV over $50 per hour. A player that plays 800 hands per hour will hit a royal flush about every 50 hours. Paul hit 59 royal flushes of over $1200 in one calendar year. Either Paul was lucky or he played over 3000 hours of video poker. I believe Paul made over $50,000 dollars that year. He made $16 per hour before taxes. I ran some calculations and verified the story for him. I decided the time and effort were too great.

The next time Paul came to me with an opportunity, I was the most skeptical of all. Paul had found a slot machine he was interested in. How do I calculate a slot machine? This is a new type of machine. I am listening and I have almost none of my brain engaged in the conversation. You push a button to stop each of the three reels. Electronic reels, not mechanical reels. Paul, I need to know the pattern or sequence of symbols and I need to know if it is the same every time. Paul leaves and I forget about the concept. This is borderline goofy and I have wasted too much time on it already.

Paul is at my place waking me up too early. Paul has a spiral bound notebook and he has the symbols recorded. I have no idea how many hours Paul spent recording the reels symbol by symbol. Paul is sure he has it right. He laughs and tells me that he knows how patient I am and how tolerant I am of mistakes. He made me smile. How do you stop the reels and can you stop them? The sequence is 168 symbols per reel and each reel is not unique. The speed of the reels is too fast to reliably stop the reels. I agree to go look at the machines.

The key symbol is a gold colored apple and there is only one on each reel. I watch the reels and decide I can see the oranges the best. They are bigger and the color is more distinct to my eyes. I quickly realize that by the time you see the golden apple it is too late to push the button. I spend some time working on my reactions. When I see the plum that comes before the golden apple I need to push the button. This will deliver the golden apple to the center line. After three hours of study and about $40 dollars invested I lined up the three golden apples and won $1000. The problem being that you can bet anywhere from a quarter to five dollars and to win the thousand you have to wager five dollars.

We leave the casino convinced we have the strategy figured out and we will be able to win money at will. We discuss it and decide to keep it quiet. We start to make money and immediately it seems to be getting too hard to stop the third apple. The first two are no problem. The final one slides past or stops early every time. I am getting frustrated. I start to study the machine more. Sure enough if I do not have the first two apples lined up, I can stop that reel on the apple every time. I decide the machine has adjusted the time slot down so small as to make it impossible to win. This machine is interactive. Paul and I leave it alone for three weeks. When we return to it, I stop it on the three golden apples for $1000 on my very first try. I really believe the machine adjusts to return the proper payout percentage. If the players are too good it gets harder to win, if not impossible.

Paul and I have a way to win $1000 every month or so. Unfortunately, a security guard has watched too much and knows what is happening. He starts to try the machine pretty regularly and can hit the apples too. He is getting some of our money. The customers have figured out that you can’t win right after somebody has hit a big winner. Our system is effectively thwarted. We do not make any money or spend any time on the machines for a few months.

I feel like I understand the machines and how they work. I can only make money if others lose money first. I think about the adage, sheer the sheep don’t rip the hide off. I want to try making a little bit of money. Sure enough when it tightens, it tightens and you can’t win. I am ready to give up. I remember the win-win negotiating technique of changing the frame of reference. Think like a machine Victor. The machine does what it is programmed to do and makes first level decisions and adjustments. The machine will do what it wants, figure out a way that you can profit from the machine doing exactly as it is programmed to do.

Why does the machine adjust? Because the players are winning. How does the machine adjust? Reduces the time slot of the winning combination down to zero and forces the symbol to land one past ore one short of where it should stop. Does the machine do anything else? Do the reels get faster? No, I am pretty sure that is all the machine does and all that it knows. I need to think about a way to make that profitable for me.
I find my win-win position almost by accident. I am studying the symbols and what happens when the machine adjusts. I run different scenarios with paper cards I have made. I slide my strips up and down next to each other and I find a combination that works. Too bad I can’t line it up like this. Then it occurs to me to put the golden apples on the top line and not the middle line. This will make me win $7 when the machine stops short and $10 when goes past. If it stops on the $1000 that is great. I know the $1000 won’t happen.

I retrain myself to stop the golden apple on the top line and it is easy to get the first two reels where I want. The third reel keeps pushing past and stopping short no matter how hard I try. The good thing is I am making money every spin. Problem solved. This is a grind and I can make $300 an hour as long as my reflexes stay sharp.

Paul is older and can’t perform as consistently. He is good enough to win and is making close to $200 an hour. We take some money and I decide we better stop for the night. We go away and discuss a strategy to make money on our new system. We will play off hours when people aren’t around to see what we are doing. We will cash small tickets and not take too much.

After a week our system is still working. I have them beat and they do not know it. Terry Westrick has heard a rumor and comes by to tease me about the slot machine system. I tell him that I have it beat. He laughs and asks if I need a plane ticket to Las Vegas. Vegas is full of guys like me with a system to beat machines. I tell him if Vegas has this machine I will go. Paul and I continue to win for another week and nobody even believes that we are truly winning.

Terry calls me into his office and asks me if I have something figured out. I tell him that I do. He mentions that the machines adjust and they will clamp down and get the return percentage down to the programmed 90%. I agree with him and tell him I have already figured that part out. He tells me to enjoy my luck and that I need to realize that it will run out. I tell him that is the way the machine is programmed. I explain a little about reverse engineering. He says he knows that I am a couple thousand ahead. He is watching. I nod in agreement. I have him beat and he has no outs. The couple thousand is really ten thousand I am ahead of him and his machine can’t save him.

The next visit to the office is more serious and very real. Terry tells me he knew I was good. That is why we hire you. Thanks Terry. Terry point blank asks me, “Can you beat that machine?” I tell him, “You already know that I can.” The company doesn’t believe me. Terry tells me to get all I can because the days are numbered. He can’t stop me and the company has guaranteed him that I will lose. The company will pay the losses from this day forward.

Paul and I begin an around the clock vigil playing the machines and soon the machines fill up with people trying to duplicate my play. The company rep is on site and Terry brings him to meet me. I quit playing and sit there. He asks me how I am doing it. I tell him that I am an engineer and my time costs money. Terry tells him questions are $1000 each and the truth is guaranteed. He wastes $4000 dollars accusing me of cheating. His fifth question is will I explain my system to him. I tell him he gets one hour and I will show him. I do a live demonstration while he watches. He leaves dumbfounded. When he returns he simply watches. I turn the machine over to Paul and go home to sleep. When the phone rings a couple hours later, I know the game is over.

Paul and I make the trip to Chicken ranch outside of Sonora to play a bank of identical machines. When we walk in the security guard is there to meet us and show us our pictures. They were expecting us. The machines are all dark. I have found a flaw that has left a second company vulnerable. These machines never returned.

When the game goes down and you have nothing to do, look for opportunities to make money doing something else.

After all, He is an engineer.

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