And since the Gun Blogger Rendezvous is in Reno.

I gamble. Not a lot but often enough. I enjoy it and I only play with an amount of money I am willing to lose. If I engage in a game, all the money I take to the table I consider already spent. Never gamble more than you’re willing to lose. I’m not encouraging you to gamble and assume no responsibility if you lose money. Now, with those lame disclaimers out of the way, here’s Uncle’s brief intro to gambling.

The way you win is to stake money when the odds are in your favor. And that doesn’t happen often or, with many games, at all. And staking money when the odds are in your favor consistently over time. The classic example is in poker and you have a flush draw with two cards to come. If you hit your draw you will win. In the pot, there is $100. Assume your opponent will do one of two things: (longish post, you’ve been warned.)

He will bet $50 or he will bet $200.

And, you need to know that, with two cards to come, you’re about 35% to make your draw.

If he bets $50, you should call. The reason is that you are risking $50 for the opportunity to win $200 ($100 in the pot, plus his $50, plus your $50). Or 25%. Your odds of making the draw exceed that. So call. Put another way, over the long term, this is a winning bet. If this situation presented itself 1,000 times, you would profit $20,000 (you’d win 350 times for a profit of $52,500 and lose 650 times for a loss of 32,500). If you make this call and hit, your opponent will likely call you names like fish and donkey because you sucked out on him. But remind him he gave the right odds to call. And he should have bet more.

If he bets $200, fold. You’re risking $200 to win $500. Or 40%. Your odds of making the draw are less than that. So fold. If this situation presented itself 1,000 times, you would lose $25,000 (you’d win 350 times for a profit of $105,000 and lose 650 times for a loss of 130,000). (somebody check my math, I did this hurriedly)

It’s all about the odds. Every game. But there’s a trade off. Games with poor odds (lotteries and slot machines) pay out higher if you win. Games in which you have better odds (and by better, they’re still not great) if you know what you’re doing (like blackjack or poker – though poker is a bit different in that you have some control of the odds and the house makes money by taking a percentage of the pot) pay out less. In better odds games, you can pretty much double up and that’s that. Slots and lotteries offer ridiculous pay outs but these are dwarfed by the odds you’ll hit it. On lotteries, you’re probably more likely to get hit by a stray asteroid than score the powerball. The payouts are strictly controlled in these games. It doesn’t take a genius to figure out that the winnings are controlled with an advantage to the house/state.

All games give the house an advantage. The classic example is roulette. If you play a single number in roulette and bet $1, you have a one in 38 (1-36 and 0 and 00) chance to hit that number (that’s in the US, in other countries they use 37 numbers – no 00). If you lose, you’re even money. You lose $1 for each $1 you gamble. If you win, you get paid (at most places) 35 times the amount. So, your $1 bet would make $35 if you hit. In an even money game, it’d pay you $38. So, even when you win, you lose. These little variances are how casinos make money. To simplify, say you placed $1 on each of the 38 numbers. You would lose $37 for each number you didn’t hit and win $35 for the one that you did hit. You’d be down $2. The casino is happy to make money $2 at a time.

Another thing about gambling is that, though folks dream of a quick score, they are long term games. That is, games that require skill are long term. I’ve made a decent chunk of money playing poker. Sure, I’ll have bad nights and get felted. And I’ll have insanely good nights when I quadruple my money. But, generally, over the long term I am a winning player.

On specific games that I’ve been known to play:

Slots: They’re for suckers. The way to win is to accept the fact that you will lose but go for the big pay out anyway. And the big pay out only comes with the max bet. Don’t ever short bet. The only strategy, really, is to play a lot since, over time, they will eventually hit. If you watch a player and they hit a big jackpot, don’t play that machine. It won’t hit for a while. Slots can be a short term winner when you score. But so can any game. I’m a losing player at slots. And most people are too. I only play slots when I’m 1) bored or 2) had enough to drink so that I can’t pay attention at real games. Heck, a monkey can push buttons.

Video Poker: Learn the rules for optimal play (i.e., what to hold and what to not hold). Most machines are programmed to payout a percentage based on perfect play. In Indian casinos, the payout is usually 97% or so, which is to say that if you play only $100 and play it perfectly (defined by the optimal strategy – there are books about this), you will, on average, win $97 (i.e., lose $3). Even when you win, you lose. Some casinos in gambling towns have payouts of 101% or so but they know that most folks don’t play perfectly. I’m a winning player at video poker but I don’t play at Indian casinos.

Blackjack: Learn optimal play (i.e., when to double, split, hit, stay, etc.). There’s a ton of books on that. The other trick is to bet more when you’re likely to win and bet less when you’re likely to lose. This involves paying attention (or, it’s more nefarious name, card counting), which will get you kicked out if they catch you doing it. That’s kinda silly since it is more strategy than gimmick. It’s also hard to prove and is not illegal. They will suspect such if you vary your bet sizes. The premise is that a higher number of cards with value of ten or greater in the deck is good for the player. How do you do it? Easy but you have to pay attention. Assign cards values (typically, 2-6 get a value of 1; 10 through Ace get a value of -1; other cards are zero). Start at zero and add the numbers as you see the cards. When the number is high (indicating more high cards are in the deck and more low cards have been played), bet more because you’re more likely to hit blackjack or 20 and the dealer, who must hit on 16, is more likely to bust. High is defined as a multitude of usually four multiplied by the number of decks in use. So, if there’s one deck, bet more when the number in your head exceeds four(ish). I’m a winning player at blackjack.

Poker: It’s a bit different in that you control whether you play a pot or not. You don’t have to enter pots or call bets or make bets. So, you can control the odds you give and, to an extent, the odds you get. It’s about odds, calculating pot odds & implied odds, and observation of your opponents. The latter being the most important and the math being secondary. And you’re not playing against the house. You’re playing against people with the house taking a percentage. In other games, the house has rules in place and can’t make mistakes because the rules dictate the house’s course of action. But opponents can and do make mistakes, hence why observation is key. Other than the rake, poker is not inherently stacked against you. Generally, most people will tell you to play a tight and aggressive game (i.e., only play good hands and when you do, bet it strong). And that’s good for beginners but you won’t make a lot of money. You’ll make some, though. There are literally volumes of books on poker strategy and it’s too much to get into here. I’m a winning player at poker.

I don’t play craps or roulette or any other table games. And I don’t do sports betting. But I’m sure there may be some strategy to them. I just don’t know it. When it comes to poker, I only play Hold Em.

Posted in Poker on April 27th, 2007 by SayUncle | RSS 2.0 |