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One of the Most Intriguing Products From the Las Vegas G2E

By Jeff Hwang - Updated Apr 6, 2017 at 10:15AM

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IGT delivers a real hold'em poker experience, but don't expect it to challenge the video poker floors any time soon.

Walking the show floor of last week's Global Gaming Expo (G2E) in Las Vegas, I wasn't blown away. I mean, sure, the new wave of slot machines by companies such as International Game Technology (NYSE: IGT), WMS Industries (NYSE: WMS), Bally Technologies (NYSE: BYI), and Konami (NYSE: KNM) have prettier screens, better sounds, bigger seats, more lines per game, and more games per screen than ever before. And sure, there were some cool new bonus rounds and some interesting new themes, including games based on The Hangover and Batman movies.

The thing is, the slot games remain fundamentally the same: You push a button, and then you either:

  1. Lose what you bet
  2. Lose a fraction of what you bet
  3. Win a little
  4. Win more than a little, or
  5. Win a lot.

This is true no matter how much junk they put on the screen.

The new table games are no better. In fact, they're worse. Every year, Shuffle Master (Nasdaq: SHFL) brings to the show a new lineup of games that are little more than repackaged versions of the games the company brought the year before. You might get four cards instead of three, or discard two cards instead of one, but the insult is the same: All of these games require gamblers to take the time to learn how to play a game that is designed to beat them.

And for all of the games that Shuffle Master has designed and brought to the market, none have even remotely been able to approach the popularity of blackjack. Why? Because unlike blackjack, none of them are beatable (or at least not under typical circumstances).

This brings me to one of the most intriguing products of the show: IGT's "Texas Hold'em Heads Up Poker."

Texas Hold'em Heads Up Poker
Since the poker boom began circa 2003, table games makers and slot manufacturers alike have brought to the market more than a handful of new games based on hold'em poker. Incidentally, Shuffle Master has a fairly popular one called "Ultimate Texas Hold'em." However, without exception, all of them are merely bastardized versions of the Texas Hold'em poker game the world has come to love.

IGT's new "Texas Hold'em Heads Up Poker" is different.

The game in question is a video poker machine in which the player plays heads up, limit hold'em against a single computer opponent. In limit poker -- in contrast to no-limit poker -- bet sizes are fixed. In $2/$4 limit hold'em, for example, the small blind is $1 and the big blind is $2; all bets before the flop and on the flop are done in increments of $2, and all bets on the turn and river are made in increments of $4.

"Texas Hold'em Heads Up Poker" is an actual hold'em poker game, rather than a bastardization. Unlike live poker in the casino or online poker, the machine does not take a rake (the money the poker room takes out of every pot, which the room counts as revenue). Consequently, if the player plays better than the machine, the player will have an advantage in the long run.

The catch is that the machine is extremely good. According to IGT, the machine uses an "artificial intelligence-trained neural net," and makes decisions "based on the current game state." I probably spent a couple of hours with the machine on the G2E show floor, and found that the computer is extremely aggressive, is capable of making tricky plays such as bluff-raising (raising with nothing but air), and will call down light when the situation calls for it. I got called down by jack-high, queen-high, or king-high more than a few times, and lost more often than not.

Moreover, it is a very confident machine: When the computer bets and you fold, the computer will show you its cards if you press the appropriate button. In addition, the company also says that the game does not "learn" its opponent's tendencies. In other words, it does not exploit the player by adjusting to the player's tendencies, but rather by playing in such a way as not to be virtually unexploitable.

But as a result, if the game does not adjust to its opponent, does not take a rake, and shows its cards to boot, I suspect that the game must be beatable by a top heads up limit hold'em player.

That said, I think the computer is probably good enough to beat 99.9% of poker players on the planet, casual players or otherwise. And for the few players good enough to beat it, I suspect that both the player's edge and the stakes will be too small for it to be worth their while. As it is, the game is already out on the floor at MGM Resorts' (NYSE: MGM) Bellagio on the Las Vegas Strip, and the highest stakes available on the machine is $2/$4 limit. My guess is that if it is true that a player can be good enough to beat this game, then it is probably also true that he has bigger fish to fry.

Is this the next blackjack?

There is definitely a market for this game, and Texas Hold'em Heads Up Poker will become a standard offering at casinos everywhere. But while the game is probably beatable, I don't see it as the next blackjack. In fact, I don't see it replacing large chunks of the video poker floor, either.

Traditional video poker -- a space dominated by IGT -- has a couple of advantages over this particular game. One is that traditional video poker -- whether it be standard Jacks-or-Better or Deuces Wild -- is relatively simple to play. These games only require one decision point per game -- which cards to hold, and which cards to discard before you draw. Consequently, a player can play video poker for long periods of time, because it doesn't require much (if any) thinking, even to play optimally. In fact, a player can play five, 25, or even 50 hands (or conceivably more) simultaneously on a given video poker machine (see IGT's Multi-Strike machines).

But with "Texas Hold'em Heads Up Poker," there are simply too many decision points for the average gambler to play mindlessly for extended periods of time.

The second advantage that traditional video poker games have is the possibility of large payouts. If you hit a royal flush in a traditional video poker game, for example, you can win a relatively large amount of money for a relatively small bet. But in the basic "Texas Hold'em Heads Up Poker" game, you can only win what you put into the pot.

And while "Texas Hold'em Heads Up Poker" does have a side bet (with a more considerable house advantage) in which you can make a separate bet and get a bigger payoff for making unlikely hands, this is not why people will play the game.

That said, "Texas Hold'em Heads Up Poker" is the type of game that most poker players will want to try, if only as a curiosity. It also offers an opportunity for players to learn to play heads up limit poker against a very tough player, and at relatively small stakes. And while I don't expect the game to dominate slot floors -- or even video poker space for that matter -- I fully expect this game to catch on and become a staple in casinos all over.

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Stocks Mentioned

MGM Resorts International Stock Quote
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International Game Technology
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