Dan wrote: "I also pay absolutely no attention to the Kelly criterion for video
poker, but for a different reason. Kelly works well for games with near
even odds and payoffs such as blackjack, but it's very misleading on
games with widely skewed odds such as video poker."
OK, I guess, whatever you say. I think anyone who knows even a little bit about Kelly would understand that the above statement represents someone who knows very little about Kelly. The history of Kelly shows it has been used successfully in a wide spectrum of activities, so the notion that it is limited to blackjack is rather quaint.
Dan wrote: "I recommend using the Sorokin formula. Instead of giving guidelines, it
gives very accurate figures on risk of ruin. The formula is difficult to
evaluate by hand, but it's implemented in Optimum Video Poker."
The Jazbo/Sorokin formula is nice, I use it a lot, but there are three problems with the Jazbo/Sorokin formula:
1. It assumes play forever. For the non-infinite human timespan you need something like Dunbar's Risk Analyzer.
2. What do you do if any risk of bankruptcy is unacceptable? In other words, what if your desired ROR is 0%? Other than an infinite bankroll, Jazbo/Sorokin has no answer to that question, Kelly does. Kelly answers the question of how do you play without going bankrupt and on a finite bankroll.
3. What is an optimal betsize or in the case of Jazbo/Sorokin, what is the optimal level of risk? Jazbo/Sorokin has no answer to this question, Kelly does.
I have to say, I find all of this Kelly bashing, well, interesting. As a side note, some readers might ask, who is this Jazbo? Well, I can tell you one thing, he wrote the webpage on "Kelly betting for Video Poker" back in 1998, and, as it's math based, it's still valid today:
Kelly Betting for Video Poker http://www.jazbo.com/videopoker/kelly.html
Kelly Betting for Video Poker http://www.jazbo.com/videopoker/kelly.html 9/6 DB/DJ 9/6 Double Bonus with Double Jackpot. This game is appearing in Atlantic City. It is slightly positive even without cash back, but beware the variance! Pick'em
View on www.jazbo.com http://www.jazbo.com/videopoker/kelly.html
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Posted by: nightoftheiguana2000@yahoo.com
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