Tag: bankroll

Posted on by — 14 Comments

In Case of Recession

Richard Munchkin and I received the following question for our mailbag show on Gambling with an Edge. I think my complete answer is too involved to answer on the podcast, so I’m going to attempt it here. The question was:

Both of you were active APs (I think, anyway) during one of the worst recessions of the last century, in 2008. What meaningful effect did this have on casinos and on your work? Did games tighten up? Comps? Do you have any advice for APs in the event of a deep recession (hypothetically of course…)?

Continue reading In Case of Recession
Posted on by — 6 Comments

When Do You Quit?

At  www.gamblingwithanedge.com , in the comments section for a recent blog post of mine, a poker player said he had two stop limits–one for being ahead and on for being behind. (It’s possible he uses the same amount for each. He didn’t say.) He wanted to know if winning video poker players use this system as well.

In all gambling, money management is important. One of the key elements is being able to stay in the game. If you go broke, you’re out of the action.

Continue reading When Do You Quit?
Posted on by — 20 Comments

History of Your Bankroll

A player, “Alex,” came to one of my video poker classes and chose to tell me how his bankroll developed. I’m guessing he was 45 years old, although I could be off in either direction. He started by borrowing $100 from a friend, hitting a good hand which allowed him to end the first day up $500, and slowly building it up from there. Now he was up to “five figures” with no money input at all from himself. It was a point of pride with him that his gambling bankroll was entirely sourced by other people’s money and his skill. He called this his “pure” bankroll.

He never told me what his “five figures” actually meant. While it could be anywhere between $10,000 and just shy of $100,000, I’m going to assume for this article that it’s $11,000 or less. I’ve never heard of anybody bragging about their bankroll in terms of a number of figures and I imagine he probably passed the $10,000 threshold recently and was quite proud of it.

Playing mostly for quarters while building up a bankroll of that size is pretty impressive, and it definitely took some time. In no way am I putting him down.

He then shared what games he was willing to play and under what conditions. He treated this $11,000 pure bankroll as though if he lost it all, his life as a gambler would be over. Even though he had considerable wealth outside of this bankroll, that other wealth was totally out-of-bounds insofar as his gambling went. But within those parameters, he wanted to grow his bankroll as fast as he safely could.

Is this the right way to look at bankroll? Not to me, but every player has to make that decision for himself.

Let’s say you have ten $20 bills in your wallet. Do you know the provenance of each bill? I don’t, unless I just received all ten of them from the same place. If you spend one of those bills for lunch, is it important to decide whether you’re actually spending one of the bills you got from a jackpot at a particular casino or one of the bills you got from a tax refund check?

Not to me. I might care that I had $200 and now have $180, but exactly which bill I was spending is irrelevant. I’m looking at the total only.

The fact that Alex is proud of “never spending a cent of his own money in a casino,” is understandable. But it’s short-sighted.

Alex is 45 years old now. He will not live forever. Video poker opportunities, in general, are declining. They will probably not be as good five or ten years from now as they are today.

Alex’s insistence of only using his pure money, when he has plenty of other money available, is restricting his opportunities in an environment where opportunities in the future won’t be as good. Does that make sense to you? It doesn’t to me.

Alex should ask himself why it is so important to only gamble with pure money. Is it for purposes of pride? Okay. But who is he going to brag to and do they really care? If someone were concerned about his total wealth, would they be more concerned with the total amount or the pathway it took to get there?

With all that said, I’m not recommending Alex plunge and suddenly start playing bigger stakes because his real bankroll is much larger than his $11,000 pure bankroll. He still has to limit himself to good opportunities.

It’s still possible to find 100.8% opportunities and larger in Las Vegas if you limit yourself to quarter single line games. You won’t always find opportunities that size for dollars. But 100.4% opportunities for dollars offer twice the earning potential per hour played as 100.8% opportunities for quarters, simply because you’re playing four times as much.

Playing for dollars entails larger risks. If things went badly while playing for dollars, Alex could go through that $11,000 bankroll. While he has plenty of actual wealth behind that $11,000, I’m not at all sure how much psychological wealth he has. He’s going to have to figure this out for himself.

There’s much to be said for “making hay while the sun shines,” meaning take bigger risks while the opportunities are bigger. There is also much to be said about staying within your comfort zone. These two philosophies lead to different paths going forward.

There is no unique best path for everybody. The only thing I can recommend with certainty for you is that you should examine your alternatives. Sometimes tweaking your philosophy can pay off more in the long term.

Posted on by — 13 Comments

If You Weren’t Such a Hypocrite . . .

Periodically I receive a version of the following email:

Mr. Dancer:

I have read your books and practiced on Video Poker for Winners. I’m a really good player. I live in Las Vegas and can see there are good games to play — except I simply do not have the bankroll to play at the stakes necessary to succeed.

But you do! So why don’t you bankroll me? I’ll share the results with you 50-50 of course and we can both do well!

If you weren’t such a hypocrite, you’d see the wisdom of this! This is a chance for you to put your money where your mouth is. If what you’re writing is just a bunch of lies in order to sell books, I could see why you’d pass this up. But you’re not doing that at all, are you?

So, when can we start?

Eve

 

Dear Eve:

I’m not interested. For a lot of reasons.

First, even if you are a player with the same (or better) abilities that I have, playing 100% honestly, you’re asking me to receive half of the wins and bear 100% of the losses — on a game where only a tiny advantage is possible. That would not be an intelligent gamble on my part.

Second, Eve, I don’t know you from Adam. Even if you tested out really well when I was watching, who’s to say what you will do when I’m not around watching you?  I’m not saying you’re a cheater. What I AM saying, though, is that some people do cheat and I’m not proficient at detecting beforehand who’s going to cheat me and who’s not. Since I’m not very good at this, I believe it is better for me is to stay away from it.

Third, this is not my business model. I have no desire to form some type of insurance company. Maybe somebody else can see the opportunity here and prosper at this sort of thing, but I’m 70 years old now and that’s not how I want to spend the rest of my life.

Fourth, there’s a big difference between investing in myself and investing in somebody else. Those are very different mindsets. Those involve very different risks.

Lastly, I don’t respond well to “If you’re not a hypocrite then you’ll do what I want you to do” types of arguments. It’s reminiscent of grade school challenges like, “I double dare you to jump off of that building!” No thanks. Go try and manipulate somebody else!

I have bankrolled two players in the past. One went pretty much as expected and I won a bit. The other player lost at a very high rate — possible, but unlikely. It’s been more than 20 years and I still think I was cheated — but I couldn’t prove it at the time and certainly can’t prove it now. I promised myself “never again” at the time and see no reason to break that promise to myself now.

Posted on by — 13 Comments

Paying to Avoid Royal Flushes

Assume you are a 5-coin dollar player playing 9/6 Jacks or Better and are dealt 3♠ A♥ K♥ T♥ 5♥.  The only two plays to consider are holding three hearts to the royal flush and holding all four hearts.

If we check out EV, we find holding three hearts is worth $6.43 and holding four is worth $6.38. That nickel’s worth of EV has always been too much for me to ignore and I go for the royal every time.

BUT, I file as a professional player and get lots of W-2Gs. Let’s say you don’t get a lot of W-2Gs. In that case, each one that you do get has some serious tax consequences. What if you held the four hearts in order to prevent the W-2G?

Once every 1,081 times on average, AKT turns into a royal flush. If you gave up a nickel each of those 1,081 times and ended up getting one fewer royal flush, it would cost you $55 (rounding slightly).

This is probably not too high a price to pay because a $4,000 royal has far more than $55 worth of tax consequences.

AKT (and AQT and AJT) are the weakest 3-card royal flush draws for two separate reasons. First, the presence of the ace eliminates all straight flush possibilities and reduces straight possibilities. Second, the presence of a ten reduces the chances for a high pair.

If we compared the preceding hand to 3♦ A♣ K♣ J♣ 5♣, holding this 3-card royal flush is better than the 4-card flush by a little more than 17¢ and avoiding the $4,000 royal flush over 1,081 opportunities will cost you $185. That’s quite a bit more than the $55 we were talking about earlier.

Going for the flush from 3♥ K♠ Q♠ T♠ 5♠ costs us $683 over the 1,081 draws, and from 3♣ K♦ Q♦ J♦ 5♦, it sets you back $770. Finally, from 3♠ Q♥ J♥ T♥ 5♥ you’ll lose a whopping $1,095 over the 1,081 hands by going for the flush every time.

So where do you draw the line? I’m not sure. I go for the 3-card royal on all of these hands. You’re going to have to decide for yourself what avoiding a W-2G is worth.

Other factors: If it were a multiple point day and/or there was another juicy promotion which gave me a considerable advantage playing this game, I would be more inclined to go for the flush. After all, time is money and it could easily take 5-20 minutes to be paid.

If I were playing in a state where royals were penalized (say Mississippi which has a 3% non-refundable tax on W-2Gs), that would make going for the flush mandatory in our first example and a closer play in the others.

If I were playing near the limit of my bankroll — either actual or psychological — I would tend to go for the flush, which is a play with a much lower variance.

On the first hand, you get skunked about 70% of the time going for the royal and “only” 68% of the time going for the flush.  If I were someone for whom today’s score mattered, I might go for the flush.   I certainly don’t recommend that you worry about today’s score, but some players just can’t help themselves.

This wouldn’t happen to me because I don’t do this, but if you were picking up someone else’s free-play and a royal flush would be awkward and you insisted on playing dollars anyway because you were in a hurry, I would go for the flush every time on these hands.

There are other hands in this game and every other game where it could make sense to avoid the possibility of a royal flush if it could be done at a low cost. But you should look at them one-at-a-time BEFORE YOU PLAY so you know which “inferior” plays are cost-effective. Trying to figure it out at the machine is very difficult. It’s easy to over-compensate when you’re doing this without study beforehand.

Posted on by — 9 Comments

Why Did You Even Ask Me?

My office at home includes a nice chair for reading and sometimes Bonnie will come in and read quietly while I’m working at my computer. It’s not “together-time,” but it’s closer than spending all our time in separate rooms. Such was the case on a recent Saturday when I opened an email from a friend inviting us both to dinner sometime before the end of that month.

“Bonnie, we’re invited to eat with Pete and Gladys. They have a nice comp they wish to share with us — and maybe another couple.  Do you want to go?”

“Okay. When?”

“Don’t know yet. I’ll keep you posted.”

I sent back an email saying that in general Thursdays and Sundays were best for us. Pete asked about the Sunday coming up.

“Bonnie, other than the show at South Point we’re going to, is there any reason the Sunday eight days from now is out? So long as we leave the dinner by 6:45, we can easily make the 7:30 show time.”

Bonnie told me it was rude to accept dinner reservations and then leave early and we were more flexible timewise on the following two Sundays.

“But Pete suggested this date first. For some reason, this Sunday works best for them. Let’s try to make it work for all of us before we move on to another date.”

“I still think it’s rude. Gladys may not want to eat that early.”

“In that case, it’s up to Pete to say that and if he does, then we’ll move on to Plan B.”

“What is Plan B?” she asked.

“I don’t know yet.”

I sent off the email saying that if we could begin around 5:00 and could leave by 6:45 so we could make the show, we’d be happy to attend. Pete shortly sent back an email saying that 5:00 worked perfectly for them and they were looking forward to it.

When I passed on the information to Bonnie, she told me that if I wasn’t going to listen to her, why did I even ask her?

I explained that I did listen to her response. Since her only objection to this Sunday was that it was rude to leave by 6:45, I decided that I was pretty sure Pete and Gladys could easily cope with that level of rudeness. If she had presented a different objection, it could easily have been a show-stopper and I would have aimed for another night.

“Whatever! Just do what you want. Don’t even ask me next time! I don’t care!”

I knew from experience that continuing the “discussion” that evening would be futile. So, I invited her for a walk around the block as long as the dinner invitation would not be discussed at all. By the next day, everything was fine and there was no lasting resentment.

At the risk of being called sexist, I’ve had numerous versions of that conversation with several women in my life over the years. While there’s plenty of evidence that my social skills are occasionally less than stellar, I suspect this conversation didn’t sound too unfamiliar to my readers.

There are direct analogs from what Bonnie and I went through there to gambling intelligently with a partner. In my current case, I am the only one doing the gambling and I have a partner in life. In other cases, the two partners may both be gambling on a common bankroll whether they are life-partners or not.

One of you is going to have to be the decision maker insofar as what, how much, and when to gamble. The other person can offer input, and sometimes that input is sufficient to change the plans, but one person has to be in charge. And once the decision is made, the other one should go along with it without mentioning that she disagrees with the decision every five minutes.

There must be trust between the partners. If you don’t trust each other with money, skill-set, or decision-making, it can make for an unhappy partnership.

In my case, it’s obvious who the decision maker should be insofar as gambling goes. Bonnie and I have been together less than four years and I was already a video poker professional when she came along. Also, I’m the one with the gambling bankroll. In addition, making logical decisions when there are a lot of competing variables is something I’m better at than she is. (On occasion, Bonnie might dispute this last one.)

In other partnerships, it’s not so clear cut who should be in charge. Should it be the one with the money? Should it be the most knowledgeable gambler? Should it be the one with the best organizational skills? Should it be the one who wants to be the leader the most? Should it be the only one willing to take on that role? Can you agree who’s best at it?

Well, each partnership is different and each must come up with its own way of doing things. We’ve had several “team captains” on the radio show explaining different ways they did things. It’s different if you have the same people in a long-lasting partnership than it is if you’re together only for a weekend for a 3-day play. (I know I’m riding roughshod over the difference between being a two-person partnership and a multi-person team. For today’s discussion, I don’t think that difference is important.)

Can it create hard feelings sometimes along the way? Of course. This depends at least partly on how abrasive the decision-maker is and how sensitive the other person is.

I’ve known of marriages that have broken up because of gambling. I’m not talking here about problem gamblers (who have their own set of problems and certainly many marriages have been ruined by problem gambling). I’m talking about winning players who couldn’t agree on things such as how much, how often, and when — and when you should get away from gambling for a while. Just having money coming in is not nearly enough for a happy life.

Posted on by — 28 Comments

Is it Wrong?

I’m glad my articles are now posted on the GamblingWithAnEdge.com website. That provides a forum and often people take the time to respond to what I’ve said — or to comment on other responses.

A while ago somebody posted there, “Is it wrong to see someone drop money and you don’t tell them?” I want to tackle that one today.

My answer today is probably different than it was twenty-four years ago. Twenty-four years ago, I was brand new to Las Vegas and had moved to town with $6,000 in cash. My car was in decent repair. I wasn’t broke — but I was one or two unfortunate incidents away from being broke. I was playing blackjack with a girlfriend-partner, and that $6,000 had to cover bankroll AND living expenses.

At that time, I would probably have kept my mouth shut, waited until the person who dropped the money had stepped away, picked up the money, and left the area. This exact scenario didn’t happen to me, but similar-enough situations occurred that I’m pretty sure that’s what I would have done. I REALLY was in survival mode. Not literally, but psychologically. Since I hadn’t caused the person to drop the money, I wouldn’t have felt I was stealing the money. I could have slept at night.

Today I’m in a different situation in life. When I see people drop something, I normally speak up — basically by reflex. It’s usually not money which is dropped, of course, but sometimes it is. Today, the pleasure I get from an “extra” $100 is usually less than the grief felt by the person who lost it.

Even when I was barely getting by, there would be situations where I would speak up. Such as:  If a mother was struggling with three young children and one of the kids caused her to drop some money — even if I was in a survival mode, I would have spoken up. Whatever her financial status, a mother with three young kids is having a difficult time and I wouldn’t want to make it any more difficult. Keeping the money would forever have me worrying about, “What if she was getting medicine for one of the kids and that was the only money she had?” Best to play it straight and not have those worries.

Picking up money that has been inadvertently left behind has lots of analogs in a casino. You see credits left on machines. You see multipliers left on Ultimate X machines. You see players leave “must hit by $500” machines when the meter is at $498. Sometimes you know who left these things and sometimes you don’t. Collecting credits left on the machine may be against the law in some jurisdictions (usually you won’t be caught), but often there’s no law telling you what you must do. Often, you’re free to make your own judgments and decisions.

Is there a moral difference to what my actions should be based on whether I was poor or I was rich? Probably not, but the world sure looks different depending on whether things are going your way or not.

I like living in a world where random acts of kindness are not all that unusual. And to have that world exist requires that I do my share. So, I do.

Posted on by — 10 Comments

Is it Guaranteed?

I recently published an article on quitting when you’re ahead which may be found here. The article referred to a particular $100,000 royal flush I hit at Dotty’s and why circumstances at that establishment led me to quit gambling there for a few months after the jackpot. Some of the follow-up comments about the article were, to me, very strange and irrelevant. I wouldn’t call them stupid questions. I would call the questioners uninformed. Continue reading Is it Guaranteed?

Posted on by — Leave a comment

Picking Up Free Play

Richard Munchkin received a note from a Gambling with an Edge listener about a subject to talk about. The note referred to a casino where the formerly 8/5 Bonus machines were recently downgraded to 7/5. Part of the note said: Continue reading Picking Up Free Play

Posted on by — Leave a comment

Going Down in Stakes

More than a decade before I started playing video poker, I was doing my best to make it as a backgammon player. In the 1980s, I regularly played at the Cavendish West, located in West Hollywood, California, right where the Sunset Strip met Beverly Hills. Continue reading Going Down in Stakes