The risk formula which you and NOTI are refering to as the "Sorokin formula" would be better named the "jazbo/Sorokin formula". Since I am at least partially responsible for the mis-naming of the formula, I want to jump in here to try to set it straight.
The formula itself has been around for a long time. But jazbo was the first to recognize that it could be applied to video poker: jazbo sent a note to his listserv group about it in December of 1998.
A couple of months later, a Russian mathematics student, Evgeny Sorokin, posted a cryptic RoR question about a 3-payoff game on the old bjmath.com site. He answered the question himself a short time later. His posts languished for several weeks until I realized what he meant, and more importantly, realized that his solution could be applied to video poker.
I posted my "Eureka" moment on bjmath, and MathBoy quickly realized that cashback could be included. We wrote an article titled "Risk Of Ruin for Video Poker and Other Skewed-Up Games" that was published in the Fall 1999 (Vol XIX, #3) issue of "Blackjack Forum".
Neither MathBoy nor I had an inkling of jazbo's earlier contribution until after the article was written.* Nor did any of the 3-4 people to whom we sent a draft. That's understandable--we were all blackjack players who had only recently begun to even think about video poker.
MathBoy and I did not refer to the formula as the "Sorokin formula" in our article. We ackowledged Sorokin's contribution, but referred to the formula as the "generalized risk equation". However, I think it's appropriate to call its application to video poker the "jazbo/Sorokin" formula.
--Dunbar
*In a subsequent issue of Blackjack Forum we tried to set the record straight. 10 years later I guess I'm still trying to set the record straight!
···
--- In vpFREE@yahoogroups.com, Dan Paymar <Dan@...> wrote:
At 9:41 PM +0000 11/4/09, nightoftheiguana2000 wrote:
>It's all about the size of your bankroll. Which is why the Kelly
>system is so important. The Kelly system produces the maximum
>average bankroll growth. The rich get richer, the poor get poorer,
>and the middle steadily disappears.
The Kelly system can work fine for games where you can make
relatively small changes in your bets, allowing you to bet a
calculated percentage of your bankroll, but that is rarely possible
in video poker. The only situation I can think of would be a 100-play
machine that lets you play any number of hands.
Also, Kelly is not very good for games with widely skewed
probabilities and payoffs, including video poker.
The only reliable calculation for risk is the Sorokin formula, first
applied to video poker by (I think) jazbo, and included as a feature
in Optimum Video Poker.
Dan
--
Dan Paymar
Author of best selling book, "Video Poker - Optimum Play"
Developer of VP analysis/trainer software "Optimum Video Poker"
Visit my web site at www.OptimumPlay.com
"Chance favors the prepared mind." -- Louis Pasteur
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