My flight is at 7:25. At 6:30, instead of being at the airport, I'm mashing on the buttons of a video poker machine at The Tropicana, playing $125 hands of video poker. I haven't become a compulsive gambler-- I just found out about a casino loophole worth hundreds of dollars, and I'm trying to cash in before heading back to San Francisco.
The loophole is a promotion that several casinos have implemented to draw in new business. The terms are so favorable to the player that, with correct strategy, it is virtually impossible to lose any significant amount of money, but very easy to win hundreds.
Here's how it works at Cosmo, a new casino on the strip with very straightforward promotion rules: if you lose $100 playing machines, they will refund your $100, which must then be played through once. Most people will play this promotion suboptimally, making the promotion worth only around $20. Many more will succumb to compulsive gambling and lose the $100 refund as well.
To understand how to get the most money from this promotion, you need to understand a few things. First of all, you only get free money if you lose. Therefore, counter-intuitively, you want to employ a strategy that maximizes the chances that you'll lose, while minimizing the action you give to the casino. To do this, you play the maximum amount at the highest EV machine, stopping at a predetermined high water mark. The higher you decide to stop, the more the promotion is worth.
Here's the math:
If you decide to stop at doubling your money, you will double up 50% of the time and lose half the time. Either way, you will give between $200 and $400 of action or so, depending on how quickly you win or lose. The house advantage at a good game (video poker) is around 1.5%, so take another $6 off either way. That means that 50% of the time you will win $94, and 50% of the time you will lose $6. That makes the promotion worth around $44.
If you decide to stop at quadrupling your money, you will get there 25% of the time and lose 75% of the time. That means that 25% of the time you will win $294 and 75% off the time you will lose $6. That makes the promotion worth $69.
Octupling, using the same assumptions, will bring the expected value up to $87.
You have to determine your own set point. If you really need the money, you should probably go for doubling or tripling. If you see it as a shot to make a big win at little risk, go for quadrupling or better. The tradeoff with going with bigger numbers is that you increase the chance you'll go home a small loser.
The game to play is Jacks or Better video poker. You want to play it at the highest stakes possible that allows you to play five "coins". In the high limit slots area you will find games that allow $5, $10, or even $25 coins. For a $100 promotion, I would play two $10 coin hands ($50 each). For a $200, I would play one $25 coin hand ($125) and then three $5 coin hands ($25 x 3). This is a good strategy because the most common payouts on these machines are between 1x-9x, offering you a lot of ways to get above your setpoint. These high roller machines also have a lower house advantage than the regular machines.
If you win, you just cash out and take your money. Some casinos don't stipulate that you get a refund on your first day of playing, just your first LOSING day. In those cases, you can go try to lose again the next day. You should also go with a lower setpoint, because you aren't giving up opportunity when you win.
If you lose, you go back to the players club desk and ask for your refund, which is applied to your card.
Now your strategy changes. You want to give the casino exactly $100 worth of action at a very low stakes game. You'll always be expected to lose 1.5% of the $100, so you may as well play it on a low variance game. I suggest a 10-play jacks or better machine, betting 25 or even 10 cent coins.
You'll see billboards and signs all over Vegas for these promotions, and you can also ask the players club desks. Casinos I know of who have them at the time of this post are Cosmo ($100), Tropicana ($200), and Hooters ($200). With a good strategy, you should be able to cover your flight to Vegas just by playing these promotions. If you have several friends going, pool your play together so that you can have a higher setpoint but still not take much risk. One friend reported to me that just by playing these promos, he started getting even better offers in the mail, like $15 in free money every day he plays.
By the way, I don't expect many people to actually do this. If I had just heard about it, I would book a flight for Vegas immediately. Let me know if you do it.