Three Small Misconceptions with Big Impacts by Frank Scoblete

Some things sound logical but are not. In gambling you’ll find this all the time. People will promulgate a concept, say to themselves "hey, this sounds great," then go out to a casino, employ their new design and -- get creamed. This creaming often occurs over time, so that only the truly astute gambler knows what a mistake his seemingly logical construct had been. The other players, who just don’t follow their long-term results, will continue to throw more good money after their original good money and continue to think they are doing something logical.

In order to save you, our dear readers, from the logic of such above errors and misconceptions, we are going to tackle three small misconceptions that can have devastating consequences on your casino bankroll should you allow them to become a part of your gambling zeitgeist. They are the following:

Misconception # 1: "It’s just a small investment for a potential big win!" Craps players who make those Crazy Crapper proposition bets such as Box Cars (12), Snake Eyes (2) or yo-eleven (11); Let It Ride and Caribbean Stud players who put up the jackpot side bet, and most slot players looking to gain 15 minutes of fame and a lifetime in fortune on those giant progressives fall for the small risk/big reward logic.

Looked at one way, it does make sense. If you bet the 12 at craps, the payoff is 30 to 1. Not bad. You risk a measly dollar and you can win $30. However, the house edge on the bet is staggering 13.88 percent. That means for every $100 you bet on Box Cars, you’ll be out an average of $13.88.

How does this translate into real, gambling life? If we assume approximately 120 rolls of the dice every hour, a person betting $1 on the 12 on each and every one of those rolls will "invest" $120 per hour. His reward will be an expected loss of $16.66 per hour. In a day of play, say, four hours, he can expect to average $66.62 in losses on that one bet. Ouch!

So how come the person who buys into that low-risk/high-reward logic doesn’t see the flaw once the losses start building up? Simple. Gambling is anything but smooth. You have ups and downs. The person who bets the 12 will sometimes win, maybe quite a lot, at any given moment or in any given session. This encourages him to keep making the bet. The non-smoothness in gambling, sometimes called "volatility," makes it a rollercoaster ride. So those times that Box Cars come rolling your way giving you a whopping payout of $30 for your $1 bet, will blind you to the long-term destruction such a poor wager is having on your bankroll.

The same can be said of all the high house edge bets at craps, they are just siphoning tubes going directly into your bankroll and draining it slowly but surely of its liquidity.

Now, what of those tantalizing side bets at Let It Ride and Caribbean Stud? A measly $1 opens you up for rewards in the tens and, perhaps, hundreds of thousands of dollars. True, some lucky so-and-so will occasionally win those wild jackpots but what about the hundreds of thousands of players who don’t and never will? Here is what happens to them: Most jackpot side bets come in with house edges of approximately 25 percent, some more, some less, in order to fuel the big jackpots that you see. That means for every dollar you bet, the house keeps 25 cents. This is worse than the worst slot machine in the casino! At Caribbean Stud you get to play at least 50 hands per hour, so you can expect to give the casino a gift of $12.50 per hour (or $50 per day, assuming four hours of play). At Let It Ride, you might get in 65 hands per hour, so the cost to you will be approximately $16.25 per hour or $65 per day.

As you can see, those little investments become awfully big investments when you look at them over time.

Misconception # 2: "If the house edge is small, the game must be good!" This is a very powerful misconception because for the most part it is true. When deciding what games to play and how to play them, the house edge is one of the two most important factors. As witnessed above, those large house edges crippled players’ chances to make a profit.

But there was another factor working against the players in misconception #1, the speed of the game. A simple example should suffice to explain how speed can make a good house edge a dangerous game. Let us take two different versions of the same game, baccarat and mini-baccarat. Both have the same rules, the same house edges on their two low-end bets (Bank: 1.17 percent, Player: 1.36 percent). For all intents and purposes, we must acknowledge that as far as house edges go, these are some of the lowest you’ll find in any casino.

Yet one of these games can really cost you big time in the long run and the other is relatively mild. How can that be? Baccarat is played on the big table, usually in high-roller rooms for stakes ranging from $25 to thousands of dollars, while mini-baccarat is played on a blackjack-style table for minimums of $5 and $10. In baccarat, the players deal the cards and there are a whole bunch of meaningless rituals associated with the game. That makes it a very slow game of between 30 and 50 hands (excluding ties) per hour. For our purposes 40 hands per hour will do.

Mini-baccarat, on the other hand, has no rituals. The dealer deals all the hands and the game is lightning in its quickness, so much so that 150 hands-per-hour (excluding ties) is not an unheard of figure. The player playing $10 per hand, making the Bank bet only (the best percentage bet in the game) will stand to invest $1,500 per hour and his expected loss will be $17.55 per hour of play. However, the player at regular baccarat betting $25 per decision will invest $1,000 and his expected loss will be 11.70. So your average bet can be 2.5 times as great but your average loss is a third less if you play baccarat instead of mini-baccarat.

House edge times speed of the game is the formula for judging just how much a given game will cost you over a given period of time.

Misconception # 3: "Big players are smarter than small players." In the casino players’ hierarchy a special place of awe and envy is reserved for players who bet big. We’ve seen players betting the equivalent of what we, the entire table games staff of ACI, make in a single year -- betting all this on a single hand of baccarat! Kerry Packer, the Australian billionaire, is said to wager anywhere from 100 thousand dollars to one million per decision at baccarat. At blackjack, he’ll play all six or seven spots for 50 to 100 thousand dollars each. Yikes! Does this mean that he is an astute gambler? No. It just means he bets BIG.

Since we have never seen Packer play personally, we will tell you about a guy we did see a few summers ago. He easily wagered over 50 thousand dollars per roll at craps. But he made all the worst possible bets. In a single evening, he won close to a million dollars when luck was with him. But after several days, when he left the casino, he was down multiple-millions of dollars. He was one of the dumbest players we ever saw -- despite his obvious wealth. Smart in business? Perhaps. Dumb in gambling? Definitely.

There is absolutely no correlation between how much you bet and how intelligent a gambler you are. People bet the kind of money that gives them a thrill. The $5 player is getting just as much of a bang risking his money as the $500 player. But who plays the smarter game, who is the savvy player, is not a product of money, but of brains. We have yet to see a price tag placed on that! Intelligent play is priceless at any level of betting.