I realize this is a thinly-veiled dig at our President, which is against the rules of GQ. But to be fair, he’s not the only developer or casino owner who has lost money in Atlantic City. AC allowed too many casinos to be built, and there have been closings and bankruptcies on a regular basis. The AC casinos seemed to exist to fleece NJ< PA and NY residents within a few hours drive, and they seem to take pride in lousy customer service. Traditionally, dealers in AC are often surly and dismissive of the very customers/gamblers they are dealing to. There has always been a huge difference in dealer friendliness between AC and Las Vegas. And now you have widespread gambling in NY, MD and PA, and the town is in even worse shape.
But, yeah, as to the OP’s confusion, a casino operates on the long-term edge. They want gamblers to get up, or even win. That makes people return. But, overall, they are glad to take 3 to 10 percent of every dollar bet. It adds up.
This may have sounded almost snarky. Let me demonstrate the conclusion with a simple arithmetic example.
Suppose you have $300 and want to walk away with $600 total.
Option A)
Bet $300 on Red. Win with prob. 18/38 = .473684
Option B)
Bet $100 on 1-9. Win with prob. 9/38
If you lose first bet, Bet remaining $200 on 1-12. Win with prob. 12/38
For Option B, your net win chance is
9/38 + (29/38)*(12/38) = .4778393
.4778393 > .4736842. Q.E.D.
Intuition: With Option A, your entire bankroll is subjected to the 5.26% house vigorish. With Option B, almost a quarter of the time only ⅓ your bankroll is subjected to house vigorish. Making 35-1 bet(s) instead of 2-1 and 3-1 bet(s) increases the effect.
Where was this casino and how big was it? I’ve never seen such a sign in Nevada save something like Up to 97% payout!!! over a particular bank of machines.
Also, 97% would be unusually high, even for an average. In Nevada, by law a gambling machine has to have a return of 75% In practice, competition is high enough I never saw anything less than 82% and those were on penny slots; even on nickel slots it would be more like 85% OTOH, anything over 90% is going to be on a dollar or higher slot.
The club I worked at got in a new bank of dollar slots and we put in a 98% payout sign above them for six months. Then the chips were changed to 92% and we took down the sign. Curious, I compared the reel sheets we kept in the shop between the two. These were IGT Red White and Blue slots, the most popular at the time. The reels each have 11 symbols on them and 11 spaces in between for a total of 22, but these were stepper motor slots. That means each symbol and each space almost always had more than one ‘stop’ associated with it making 64 total for each reel. The differences between the 97 and (2% payout machines were very subtle. The high pays were the sevens and those were identical. Even with the bars, reel 1 was identical, reel 2 had two fewer bars and two more spaces, and reel 3 one fewer bar among the 64 stops. This is not enough of a difference to be noticeable to anyone playing, say, 200 games.
Yes, the exotics are terrible bets, but most casinos will let you take or lay odds (scroll down a bit). The casino pays true odds so the house percentage is zero.
Several people have posted the obvious answer - when someone shows up with $100, even if they win back about 97% of it - they keep betting their winnings until it’s all gone. So the casino generally takes all of everyone’s $100, 3% per bet. Some lucky guys will be smart enough to take their winnings and leave, maybe even with a profit - say, 3%. Some will quit when they are down to $50. Most won’t.
So short answer is - 97% is “payout of the amount you just bet”. I.e. 10 people bet $100, someone(s) will get $970 in winnings. But of course, in a normal casino, all that $970 will end up on the table again. $943 in winnings result. and so on… Eventually go home with nothing. A week later, when Joe Sucker has scrimped together another $100, he heads to the casino thinking “at one point I won $970! I gotta try that again…”
Hm, it appears I might have spoken too hastily… it looks like that really does work, septimus. I’ll have to think a little more about that.
Of course, you only have the opportunity to take that bet if you’ve already made some other bet that’s profitable to the house. But assuming that you find variance itself to have some value to you (because if you don’t, then you shouldn’t be gambling in the first place), then it’s still an opportunity to get more variance for the same initial payout.
A average slot player will put in $1K+, play for hours and lose it all. And once they do, put in more. People who play $10k a visit are by no means rare, and that wont even make them a “whale”.
Are you asking how betting in roulette works, or are you confused regarding how one can bet $100 evenly on spaces 1 through 9?
I’m not familiar with any tables where a single bet can be placed on 1 through 9. You’d have to place separate bets on spaces 1 to 9, but of course you can’t do that evenly with $100.
There is a single bet you can make for 1-12. See pic below:
You’re right, of course. My example was “if every single player who ever found themselves up, even marginally, decided to call it a day”. We all know that isn’t going to happen.
Maybe I said something useful without realizing it. The house only has to win on average. The players, psychologically speaking, need to feel like they’ve won.
In a casino, feeling like you’ve won is in fact not what real winning feels like. (Real winning in a casino sounds boring, except perhaps for the excitement that you risk being found out.) And you wanting to feel like you’ve won is how casinos make money, because your effort to get that winning feeling is exactly what makes you lose.
Yeah, the trouble with playing the free odds is that it cycles through your money much more quickly. Thus, if you have $250 to play with and you’re at a $5 craps table (do they even have such tables in Vegas anymore?), you can bet $5 on the pass or don’t pass line and take forever to lose significant money, but if you start taking the 3x free odds, the money can disappear much more quickly. And if you are playing money on every roll (every roll, you bet pass/don’t pass or come/don’t come), it Hoovers up your bankroll at almost the same rate that the Browns suck at being a pro football team.
I gave up on gambling when I realized that I wasn’t losing by losing, but rather losing by winning. This, of course, I should have realized when my dad advised me to learn that gambling was governed by the laws of Thermodynamics, but the young are hard to teach. :rolleyes:
Taking odds should not increase the speed of losing your money. It’s pure varianc, and the house has no additional advantage on the odds bet. So long as your bankroll is large enough, that is.
When you are playing negative expectation bets, variance is your friend. In fact, it’s your only friend.
Or consider it this way: If you want to play $10 per roll, you are much better off putting $1 on the passline and playing 10x odds than playing $10 on the passline alone. You put the same money into action at much better odds.
Mind you, I never play negative expectation bets at all. I have no real interest in gambling when I don’t have the edge. I just came back from Vegas, and never went near a slot machine or any other game that had a built in house advantage.
It sounds like you’re saying that not everyone is going to pursue that strategy. But that’s irrelevant: Even if everyone did pursue that strategy, the casino wouldn’t care (as long as they stay full). The problem isn’t with people not pursuing the strategy; the problem is that, even if you intend to pursue that strategy, it doesn’t always work.
I’m going to a casino tomorrow night to teach my wife to bet craps the “right way” which is what a poster above described as street craps. She’s never been in a casino, and craps is the funnest game to play, IMHO. I’ll check back tomorrow and let you know how we did.
I’m pretty sure if you read what I wrote closely, you’ll see I’m saying the exact same thing as you with different words. I did not make a single argument that you are refuting.
Let’s go paragraph by paragraph:
I apparently said that the house edge and the gambler’s ruin phenomenon were the same or similar.
Incorrect. I said that the house had an advantage with a higher bankroll, but it is merely an advantage to not be ruined by a streak of bad luck, and the house odds advantage is what gets them long-run profit.
I apparently said that a larger bankroll will always mean you will win.
Incorrect. I said a larger bankroll increases the chance you are not ruined by a streak of bad luck.
I apparently said that the casino’s long-term profit was something other than the house edge.
Incorrect. I explicitly stated that the short-term gambler’s ruin was not the source of their long-term profit, but that the house edge was.
I apparently said something other than that the large bankroll means there’s less chance for the house to be ruined by a long streak of luck.
Incorrect. Such a thing was exactly what I said.
In conclusion, I believe you have simply skimmed my post for keywords and processed it without actually reading what it said. Such a thing does not surprise me at all, because all my life I have always run into trouble when people hear certain words out of my mouth and assume I’m talking about one thing and fail to actually listen to the argument I was making. It even got me fired from a job. No one seemed to care that the argument I was making was perfectly reasonable and not at all offensive; the fact that I used certain words together in a certain context apparently made it prima facie offensive even if a more nuanced understanding of what I was exactly getting was absolutely the opposite of what they accused me of arguing.
To conclude:
You can play a positive expectation game (that’s what the casino does) and be ruined by having too small of a bankroll. That’s why there are maximum bets - because they can’t afford people having runs of good luck with bets comparable to their total equity. With maximum bet sizes, the player’s potential larger bankroll than the casino is irrelevant, because they don’t get the ability to leverage it in potentially wiping the casino out, and they can’t grind the casino out of money because of the house odds advantage.
On the topic of bankrolls and games with positive expected value, I feel it’s appropriate to bring up the St. Petersburg Paradox, where the expected value of a ticket for the game in question is entirely a function of how large a bet the house can possibly pay out. It grows very slowly with increasing bankroll as can be seen in a chart on that link.
Hopefully this post was long enough so that you actually take it seriously, because the previous one you seemed to dismiss without a second thought, or indeed without even actually reading it.
Honestly, no one is really watching you at cheap blackjack tables. You can count cards at the $10 table and unless you up and say you’re doing it, no one will notice. I’ve been counting cards at blackjack for years at basically two casinos and ne’er a word has been said to me, because they don’t really pay attention to something that subtle when your monster bet is $20. If I was playing $300 a hand, they’d notice.
Let me demonstrate the conclusion with a simple arithmetic example.