Today’s article involves sports betting rather than video poker. It’s still “advantage gambling,” so I believe it’s a worthy topic for me to discuss, but I know some of my readers are not interested in any gambling other than video poker. If that describes you, perhaps you should skip this week’s article.
A friend of mine, “Pete,” recently attained Diamond status in the Caesars Rewards system. He now qualifies for a monthly $75 “free bet” (after betting $100 with “real money.”) Since I have Seven Stars status in the same system, I get a monthly $150 in free bets. I’ve mentioned this several times in my writings. Since Pete generally reads my articles, he was aware of this.
Pete wrote to me and asked if I was interested in “opposition betting” with him so as to minimize the risk.
I told him I wasn’t interested — for a lot of reasons.
He didn’t define “opposition betting,” but generally it means betting both sides of a proposition so as to reduce variance. And there are two bets we’re talking about here. The “qualifying” bet of $100 that must be made to qualify for the free bet, and the free bet itself.
Insofar as the free bet goes, you do not get your original bet back, so it’s most profitable to bet underdogs. Betting favorites on free bets is NEVER a good idea, so I’m going to assume he wasn’t talking about these.
So for the qualifying bet, $100 per month, let’s assume he’s interested in betting one side of a game and me betting the other. Let’s say we’re doing it in football. On a given week, say the Kansas City Chiefs were favored by three points over the San Diego Chargers. He’d bet KC, giving up three points, at 11/10 odds against him I’d bet SD, receiving three points, also at 11/10 against me. (Paying eleven to win ten is written as -110 in sports books.) Since we’re each betting $100, usually one of us would lose and the other would win $191 (round numbers) and would pay the other guy $45.50. This reduces variance. (We’ll ignore the case where the game ends with KC winning by exactly three points. It doesn’t affect the point I’m trying to make today.)
This bet costs him $5.50 to get a $75 (or in my case $150) free bet. The thing is, a bet chosen at random, without me on the other side, is also going to cost him about $5.50. What he’s getting is the certainty of the loss of $5.50 on this $100 bet versus the expectation of the loss of $5.50.
He’s making these bets monthly — indefinitely. Over time, the expectation will be pretty close to reality.
I generally do not make -110 bets. I’m not a sports betting expert and have become convinced that betting when I’m a 2-to-1 favorite (odds -200 in sports-book-speak) is a smarter way to go on these qualifying bets. Opposition betting wouldn’t work so well on these bets.
Another reason I would not want to bet in opposition with Pete is Bonnie and I both have accounts at Caesars Sports Book. Since Bonnie and I are often in the same room with each other, and Pete lives 2,000 miles away, it would be far easier to opposition bet with Bonnie (if I wanted to, which I don’t) than it would be with Pete.
The odds of KC minus three points might very well last all week — but it could also shift around quite a bit. If we wanted to guarantee our bets were in opposition, we’d need to do it at the same time. And when he’s ready, I might not be, and vice versa. One or both of us might not even be in a state where we have a Caesars Sportsbook account. Or we might be gambling at a casino with poor Internet connection. Or we might be in the middle of something else and not want to drop that “right now.”
And this rigamarole, to my mind, would be for no gain. I’m betting millions of dollars a month in video poker and slots where my decisions are based on expectation. Locking up a guaranteed loss of $5.50 over an expected loss of the same size strikes me as really pointless.
Finally, to me, it appears that the reason Pete wants to bet in opposition is that he really hates to lose. A $100 loss to him is much more painful to him than it is to me. While he still bets as an AP, he’ll sometimes give up a bit of EV if it will increase his chances for a positive score. I’m looking for the highest EV I can get and I know that means I’ll have some losing sessions.
Pete is one of those APs who is relatively risk adverse. Seems strange for a successful gambler to be this way, but that’s the way he is.
Anyone who stresses over losing even $100 really shouldn’t be thinking about gambling in the first place. And honestly, if he’s already a Diamond player, he’s almost certainly lost well over $1,000 to get there.
Neither statement is correct. Reducing the variance to zero for the same expectation seems like a smart play. Would you coin flip for $10 a toss? Your expectation is zero. Why would you add variance to that?
Secondly, there is generally some cost to become diamond but that is irrelevant to this discussion. Whether someone wins $1000 or loses $1000 doesn’t affect how to play the sports bet benefit.
Jimmy Jazz, you are a solid moron.
“Reducing variance to zero” – that’s adorable. You’re doing differential equations on a $100 free bet while ignoring the $15,000 you hemorrhaged to unlock it. This isn’t sophisticated risk management, it’s a guy who drives 40 miles to save 5 cents on gas because he “beat the system.”
And the cost to become Diamond isn’t “irrelevant” – it’s the entire scam. You’re the mark who thinks he’s the mathematician. The casino didn’t build a loyalty program to reward sharp EV calculation; they built it because people like you will chase losses all the way to bankruptcy while muttering about “variance reduction.”
Keep optimizing that risk-free wager though. I’m sure the house is terrified of your 0.00% edge on a promotion you paid five figures to access. Maybe next you can calculate the expected value of buying a timeshare for the free steak dinner.
Mike, one of us is a moron. If you think I hemorrhaged $15000 to achieve Diamond Elite, you are a bigger moron than I thought.
Where are you getting chasing losses to bankruptcy? You are just making stuff up.
The opposition bet problem is a simple exercise in optimizing an opportunity. Based on your reply, I’d bet ( with a pretty house edge) that your comments apply to you 10 times more than they apply to me.
I believe the correct term is “ risk averse” not adverse
Thank you, John. You are correct
Bob wrote “What he’s getting is the certainty of the loss of $5.50 on this $100 bet versus the expectation of the loss of $5.50.”
Isn’t that what you are really trying to do as a smart player? Have your play on a particular game get to the EV of the play? And if the EV is negative, you should not play?
The reason to opposition bet in this particular case is to get the free bet at the price of the qualifying bet. If there were no free bet, there would be no reason to opposition bet ( and unless you are betting for entertainment, no reason to bet at all)
Say you have to play $1,000,000 through on a dollar , 10 play , 8/5 Super aces game to get a $2500 bonus. This is a one time play. Your expected loss on the game is 0.06% so the game loss on average is $600 so your overall expectation is $1900. Before you start, someone says “I’ll give you $1900 if you don’t play” What would you do? You are trading the expected EV of the game for the actual EV of the game.
Paying $5.50 to get the $75 free bet vs playing with a -$5.50 expectation to get the $75 free bet. That is really the question.
Jimmy, again you are a solid moron. Bob made a correct point though.
“Opposition bet” – my guy, you mean hedging. You’re not at Goldman, you’re exploiting a DraftKings promo like a DoorDash driver gaming referral codes.
Your $1M coin-in for $1,900 example is chef’s kiss. That’s a 0.19% return with enough variance to liquidate you in an afternoon. A 1952 savings account beats that, and it doesn’t require praying to the variance gods on Super Aces.
You’re doing calculus on a $75 free bet while ignoring you paid five figures in negative EV to unlock it. The casino has a file on you. They love the +EV calculations — that’s exactly why your buffet is comped.
Keep optimizing though. I’m sure they’re terrified.
Jimmy:
Trying to educate mike on gambling with an advantage is a fool’s errand. Not does he not understand the concept, he keeps repeating his arguments over and over again.
Bob wrote:
Trying to educate mike on gambling with an advantage is a fool’s errand. Not does he not understand the concept, he keeps repeating his arguments over and over again.
Bob, it took 2 of Mike’s post for me to come to the same conclusion.
Mike, one of us is a moron. If you think I hemorrhaged $15000 to achieve Diamond Elite, you are a bigger moron than I thought.
Where are you getting chasing losses to bankruptcy? You are just making stuff up.
The opposition bet problem is a simple exercise in optimizing an opportunity. Based on your reply, I’d bet ( with a pretty house edge) that your comments apply to you 10 times more than they apply to me.