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Best of Alan Krigman
How Vig Collected only on Wins Enhances Buy Bets5 July 2004
Most casinos collect the vig up-front. You pay the $1 when you make the bet; the house keeps the buck, however the dice roll. For instance, on a $20 Buy, you put up $21. Lose and you're out $21. Win and you recover the $20 and earn the payoff on $20.
Here's the skinny for $20 Buys on the various numbers. You shell out $21 in each case. Going for four or 10, wins return your $20 and pay $40; you net $39 on a $21 outlay. Profit is $39/$21 or $1.86 per dollar invested. Buying five or nine, you get back your $20 and a $30 payout, so your net on the original $21 is $29. This is a gain of $29/$21 or $1.38 per dollar. Moving to six or eight, a win would reclaim your $20 plus $24. This nets $23 on your initial $21, earning $23/$21 or $1.10 on the dollar.Compare Place and Buy alternatives in terms of net profit per dollar taken from the rack. Placing four or 10 for $20 gets back your $20 and pays $36. Profit is $36/$20 or $1.80 per dollar at risk. The Buy, at $1.86, is accordingly preferable at the $20 level; and it improves as the bet increases to $39. On five or nine, a winning $20 Place bet is recovered completely along with a $28 payoff. This is a net of $28/$20 or $1.40 per dollar. A $20 buy was worth less, $1.38, so Placing is the wiser choice. The downward rounding of the vig reverses the situation on the five or nine for Buys above $24; a $26 Buy nets $38 on $27 out, or $1.41. On six or eight, you could go $18 to win $21 or $24 to win $28; $21/$18 and $28/$24 each equal $1.17 per dollar down. A $20 Buy was only $1.10, so Placing is more propitious. And, going higher doesn't help. Buying the six or eight for $35 is a net of $41 on $36 out or $1.14, still not as good as the Place bet.
A few enlightened casinos collect vig on Buys only when players win. The cut is still usually 5 percent of the wager, rounded down to the nearest whole dollar. But solid citizens put up only the face value of the bet. The vig is deducted from the payoff.
Winners' nets are therefore same as with vig paid at the getgo, but the amount
you can lose is less. For instance, a $20 Buy on a four or 10, with vig on the
win, pays $40 minus the $1, for $39. But $20 rather than the conventional $21
of your bankroll is up for grabs. The benefit boils down to $39/$20 or $1.95
per buck at risk. On five or nine, $20 Buys earn $29/$20 or $1.45 per dollar
tossed on the table. And $20 Buys on six or eight would bring $24 minus $1,
for $23/$20 or $1.15 per dollar flipped onto the felt.
Place bets on six or eight continue to be more propitious than Buys at the $20 level, paying $1.17 as opposed to $1.15 per dollar. Does the vig-on-win nudge Buying ahead of Placing on the six or eight as bets grow within the $20 to $39 range, given that the fee represented by the edge on Place bets rise in proportion to the amount at risk but the vig stays at $1? The answer, to the chagrin of shooters looking for loopholes, is negative. Place the six for $36 to win $42, for instance. Profit is still $42/$36, or $1.17 per dollar bet ($1.1667 to be more precise). The Buy at $35, paying $42 minus $1 vig, nets $41/$35 or $1.1714 on the dollar. The Place bet remains ever so slightly more remunerative.
You may think that differences like those between $1.6667 and $1.1714 are insignificant. For a single session, you're probably right. But contrasts like this are the fuel with which gambling engines drive dough from players' pockets to casino coffers. This is the very concept underlying the veritable verse by the shooters' Shakespeare, Sumner A Ingmark:
Distinctions you don't think worth noting,
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