Difference between EV and theo is a good question....
First, lets talk about EV vs ER.
ER = expected returnEV = expected valuetheo = theoretical house win
ER is a static number. It is the average return per dollarinvested, usually expressed as a percentage. So, forexample, the ER for 9/6 Jack or better is roughly 99.54%On a progressive, the ER moves as the progressive valuesrise, but for each play, that number is still a fixed valuebased on the current payouts.
EV is rooted in value, i.e. money. If we toss a coin andI pay $2 if I lose and you pay $1 if you lose, your expectedvalue for the game is 50 cents. Sometimes EV is expressedas an hourly expected value. This is especially importantfor gamblers. A 10% edge is useless if you are only ableto bet $1 an hour. Those who intend to make good moneyin their gambling must accurately asses their hourly EV.Note that this must include all potential gains, such ascash back, drawing, bounce back, etc. So EV, though very tied to ER, is a very different concept.
Theo is, in a sense, an attempt by the house to gauge theirEV. When the house uses a 4% theo, this comes from theirbelief that they will win 4% of all monies wagered. This number is often used to determine comps. The casino maydecide to give 25% of their theoretical win (theo) to theplayers as comps, free play, etc. This is why the housetheo can matter to gamblers. If I am actually playing ata 99.5% ER, and the house has a 4% theo, and the housegives me 25% of that in perks, I am gaining 0.5% becausetheir estimate of what I will lose is way off. The 4% theomay even be correct, when ALL play is tracked. Of course,that will stop if a play gets heavy skilled play or if the publicskill level elevates. So, theo is very much an invented numberand only relates to ER in a crude way.
QZ
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Posted by: James Morgan <what7do7you7want@yahoo.com>
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