Increased volatility in video poker results in more winning players but shorter winning streaks - Evidence from simulations.

Abstract

Electronic gambling machines are a prominent cause of significant gambling harms globally. We use simulations of a simplified video poker game to show how changes in game volatility, defined primarily by the size of the main prize, affect patterns of wins and losses as well as winning streaks. We found that in low- and medium volatility games the proportion of winning players quickly drops to zero after about 30 h of play, while in the high volatility game 5% of players are still winning after playing for 100 h. However, the proportion of winning streaks was significantly higher in the low- and medium volatility games compared with high volatility: the simulated players were on a winning streak about 26.3, 25.6 and 18% of the time in the low-, medium- and high volatility games, respectively. Fast-paced video poker with varying volatility levels but identical return-to-player rates and win frequencies can yield highly different result patterns across individuals. These patterns may be counter-intuitive for players and difficult to realize without simulations and visualizations. We argue that the findings have relevance for responsible gambling communication and for building a better understanding of how cognitive biases influence gambling behaviour.