How to gamble in Vegas - Part I
Wednesday, August 08, 2007
People say "What happens in Vegas, stays in Vegas". Now I know why. I went there recently, and the cash in my pocket stayed back in Vegas. Ironically, the picture cards I was handed out on the strip did come back with me in my jeans pockets.
But not everything was lost. I learnt a lot about the different gambling games, and I think it is worth sharing this insight with you. Optimists like me call it education.
Fundamentally, all gambles - including the one that starts with "I Do" - have an element of luck in them, and the odds are stacked against the common man. But lets examine the situation a little closer. As mentioned before, if you can be completely unemotional, gambling can be lot of fun (might be a reason why my wife would say I like it).
But before we focus on the games in casinos, some generalities about all such games are in order. So lets understand them first.
- In any game of luck, there is a 1 out of N chance (1/N chance) that what you are betting on will happen, where N can stay constant or vary during the game. A fair bet will mean that for such a 1 out of N chance, your 1 dollar will return you N dollars. For example, if you bet $1 on a coin toss turning a head, a fair bet would give you back $2 if you win. Examples of where N remains constant are coin toss (N=2) and dice (N=6), and example of where N varies during the game is a single card draw from a deck (N goes down from 52 as each card is drawn). For the generalities, lets assume that all bets are fair, where you get returns in proportion to risk you took in placing the bet.
- While the outcome of any bet has a 1/N chance, you are only guaranteed that outcome in the long run. In the long run a faultless coin toss will return as many heads as tails, but in the short run it can have a sequence of many heads, and still have a very good chance of turning up a head. The real implication of this theory is that even in a fair bet, if you get N times your money for a 1/N bet, you might go broke betting if you are having a stroke of bad luck in coin tosses. You can start with $5 in your pocket, and bet $1 for each coin toss, and end up with $0 because there were five heads in a row and you chose tail each time.
- One way to avoid being under capitalized, or losing all your money in a fair game, is to change bets to recuperate from earlier losses. For example, if you double the bet every time you lose a coin toss, the very first win you have after a string of losses will win you back all the money you had lost so far. As a result, you do not need to have a string of wins to counter a string of losses. However, it requires even deeper pockets than before. For example, in the five heads in a row situation earlier, even if you had four heads and a tail, you will only end up with $2 in your pocket, and a subsequent two heads streak can wipe you out. As a result, you should try betting in a manner such that a single win can put you back on top. The way to do this is by betting double the amount every time. So, if you could bet $1, $2, $4 and $8 for the first four times and lose, the fifth bet of $16 turning up a tail would have netted you $32. And all this while you would have spent $31 ($1 + $2 + $4 + $8 + $16) from your pocket, coming back on top and ready to play. Of course, as you can see, this requires you to have $32 in your pocket to start with, or limit your bets to a much smaller amount of around 46 cents.
- The bet for any fair game, where the returns match the odds of winning, you should place your bets as such: bet your basic minimum every time after you win. When you start the game, consider yourself a winner, and place the basic minimum bet. When you lose a bet, increase the amount by a certain proportion. It is important to increase it by a certain proportion and not by a certain set amount, because as mentioned earlier, in the short term you are likely to lose consecutively. Lets say that you are are playing a game where odds of winning are 1/N and returns are N$ for every dollar on bet, then p, the percentage by which you should increase your losing bet, is given by this formula: pt-1 N = pt-1 + pt-2 + pt-3 + ... + p0 + N - 1, where we assume you start with $1 and want to get back $N-1 in net winning after your first win that follows t-1 consecutive losses. As you can imagine, this is pretty hard to do, esp when you are drunk, so an easier formula is that if a game returns $N for every $1 bet, raise bet by 1+2/N times. For example, if you bet $1 on a 1/2 fair bet and lost, the next bet should be $1 times (1+2/2), which is $2. If you lose that bet, the new bet should be $2 times (1+2/2) which is $4 and so on. If the bet was on a dice, where you get 1/6 odds and returns, your $1 losing bet could be raised to $1 times (1 + 2/6), which is $1.33. If you win that bet, you get all your money back and then some. Of course, you could even bet a smaller amount for the 1/6 bet, but then it is hard to do that much math just after the cocktail waitress delivers your glass of Macallan 12.
In a casino, for a 1/N bet, you get back an amount of dollars less than N, giving the casino the edge it needs to run a profitable business. In the above example of coin toss, casinos would give you back only $1.75 if you bet $1 on a tail and won, making the bet in their favor. Actually, in reality they will give you free drinks and hope you are drunk and will bet again and again till they get it all, but that is another topic altogether.
Before we get into how you can use the above generalities and receive a better chance (you are never going to get a 'fair' chance at a casino, unless it is run by a charity), I would like to draw your attention to the Part I portion of this post's title.
As a result, more on Gambling for Dummies tomorrow. And do not forget, gambling indeed is just for dummies.
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