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Best of Alan Krigman
Playing It Smart: Can you save more by betting more? - Part 225 April 2008
Casinos grab all the money when bettors lose, but pay somewhat less than a fair share when they win. Averaged over many coups, the bosses bag the difference. The phenomenon is commonly described in terms of edge or house advantage, a percentage of the cash patrons put at risk on one or another proposition.
Most table games have a rock-bottom edge. But, how do you achieve it? In some instances, this involves following a statistically-optimum decision strategy as in blackjack. In other cases, choice of propositions does the trick for example, edge is lower on Banker than Player at baccarat.
Additional opportunities for solid citizens to reduce the edge on their action may arise by betting bigger bucks. This can be a two-edged sword, though. Lower edge ultimately translates into a greater likelihood of a profitable session. But a smaller fraction of a larger wager can still mean more funds siphoned off by the casinos and a higher monetary loss, as well as greater likelihood a normal downswing will deplete a given fanny pack.
Roulette provides a classic model. The majority of wheels today have 38 positions 0, 00, and 1 through 36. The rest have 37 0 and 1 through 36. The odds and payoffs at 38-position "double-zero" tables are such that the edge on almost all bets is 5.26 percent. One anomaly is the consolidated wager on 0, 00, 1, 2, and 3; with edge over 7 percent, this is rarely made. Another exception can be found mainly in Atlantic City, where even-money "outside" bets lose only half when the outcome is 0 or 00; edge on these bets is 2.63 percent. In contrast, at 37-position "single-zero" tables, edge is 2.70 percent on all bets.
Unless you're planning to put most of your moolah on outside wagers at tables where 0 or 00 lose only half, why not bypass double-zero games in favor of the single-zero flavor? The answer lies in the minimum the casino will let you bet at the respective tables. You'll often find double-zero games where you can participate for as little as $5 or $10 per spin. Single-zero games generally require minimum exposure of $25 or more.
The most obvious problem with boosting your bets to shave the edge is that the casino can still get a heftier theoretical bite from your bankroll. The virtual penalty on a $10 round at 5.26 percent is $0.526; at $25 per round at 2.70 percent, it's $0.675.
Subtler but more crucial to most players, however, are the chances going into a session of a desired duration with a certain budget. Pretend you have $250. And further, that you don't have a win goal at which you'll quit; rather, you'd like to have an hour (about 50 spins) without going bust, and hope a hot streak makes your day. Results depend not only on edge, bet size, and bankroll but also on how your choice of wager affects the volatility of the game. Betting everything on one spot for one chance in 37 or 38 to win 35-to-1 induces wilder swings than dropping it all on a column for 12 chances out of 37 or 38 to win 2-to-1.
As an illustration, say you make a single wager per spin on a four-number corner. That's four ways out of 37 or 38 to win $80. Betting $10 against 5.26 percent edge, you have a 76 percent shot of still being in action after an hour on your $250; prospects of hitting $250 profit before going belly-up regardless of duration, are 41 percent. Betting $25 on the corner against 2.70 percent edge, your chance of lasting an hour with the $250 declines to 36 percent; the probability you'll double your dough before going broke, no matter how long it takes, improves to 48 percent.
So, on a fixed bankroll, is raising your exposure to cut the edge worthwhile? Every situation is unique. But the figures presented show the trends. Lower bets make you less vulnerable to a killer cold streak despite the elevated edge. But larger bets and lower edge, together, help put you over the top in an everyday upswing. You have to decide what's most meaningful to you. In advance, not at the post-facto "woulda, coulda, shoulda" stage.
In deciding, remember the erudition of the wise wordster, Sumner A Ingmark:
Courses of action picked when you're finished,
Often are paths to fortunes diminished.
Best of Alan Krigman