CasinoCityTimes.com

Gurus
News
Newsletter
Author Home Author Archives Author Books Send to a Friend Search Articles Subscribe
Stay informed with the
NEW Casino City Times newsletter!
Newsletter Signup
Stay informed with the
NEW Casino City Times newsletter!
Recent Articles
Best of Fred Renzey

Gaming Guru

 

Money Management Cannot Help You Win at Gambling

13 January 2007

I was reading some posts in one of the gambling chatrooms on the internet and people were expressing their various money management techniques for playing casino games. Each poster took turns describing his own self-styled method of "turning the odds in his favor".

One person emphasized the importance of quitting while ahead. Another painstakingly detailed his "push/pull" method of betting. The variations went on and on.

Finally, somebody logged on and asked which betting method would be the best way to double his money at the roulette wheel. I didn't hang around for any replies, but the answer to that question is very simple: just bet all your money on the first spin – and never play again!

Sound too wild and crazy? Let me put it to you this way. Roulette carries over a 5% house advantage with an inanimate wheel that never has any numbers removed from it. You just can't overcome that. If you bet on "red", you have a 47.5% chance to win your first bet. The longer you keep on betting, the more likely it becomes that you'll win 47.5% of all your bets – making you a loser. After 10 bets, there's roughly a 40% chance you'll be ahead. If you bet 50 times, you're down to a 35% shot. After a long while, you'll have almost no chance at all. So your best shot at doubling your money is to step up to the table and go "all in" – then leave, win or lose.

The thing of it is, this gambling principle doesn't apply just to roulette. It applies to any game where you have an overall disadvantage. At the beginning of a playing session, a little good luck may put you out in front. But as time goes by, luck has less and less to do with it while the real percentages begin to take over.

Because this is true (and for a few other reasons), all "money management" betting systems go for naught. All this nonsense about sizing your wagers according to how you're doing, or using strategic quit points to end your session are just that – nonsense. They can't improve your year-end bottom line one iota.

Okay, I know that wagering your whole stake on the first bet is not a very fun way to play, whatever your game. You'd like to stay in the hunt a while. That's why gamblers devise so many different betting strategies. Just understand that none of them can help you become an overall winner.

No doubt, many of you reading this just aren't buying it. Down deep inside, you feel there must be some way to manage your money so as to turn a disadvantageous game into an advantage. Many past articles in these columns have dissected and exposed the futility of betting progressions, so I won't revisit that area of money management today. But I will present an interesting riddle to challenge those of you who insist it pays to quit when you're ahead. It's called...

The Quit Winners Riddle: You and your friend work at the same office and agree to bet on the flip of a coin every afternoon during your coffee break. You'll play for $1 per flip – even money. You can quit anytime you want, be it after the very first flip, or when your 20-minute coffee break is over.

Being a staunch believer in quitting when you're ahead, you decide in advance that you'll quit anytime you get one bet in front for the day, then come back tomorrow with the same game plan in mind. Using this rigid "money management" technique, it's a fact that you'll actually end up a winner on over 80% of your coffee breaks. But the important question is, what will be your financial status in this game at the end of a 25-year career?

Answer: Chances are you'll be even, within a couple tenths of one percent. How can that be if you were a winner over 80% of the time?

Having more winning days than losing days is no big trick. Since you'll generally find yourself ahead at some point on the vast majority of the days you gamble, all you have to do is quit right then. In fact, you can almost select whatever session win frequency you want.

If you quit every time you got either one flip ahead or one behind, all your sessions would be just one flip long and you'd win 50% of them. If your stop-loss point was two units while still quitting whenever you got one unit ahead, it can be easily demonstrated that you'd win 66.6% of your sessions – but – each losing session would be two units vs. one unit for each winning session. And if you put no ceiling on your daily losses, but still quit the instant you got ahead, your session win rate would climb to over 80%. Through it all though, the one thing you can't get away from is that you're eventually going to end up winning 50% of your flips. And where does that put you?

Quitting just to lock up a winning day amounts to stopping and admiring our progress at a favorable hand chosen interval, without altering that progress. It's like driving down a long hilly road towards an ultimate destination. We can nearly always choose to stop and rest on a hill rather than in a valley – but the road is still taking us to the same place.

Fred Renzey
Fred Renzey is a high-stakes, expert poker player. On a daily basis he faces--and beats--some of the best players in the country in fierce poker room competition. Now for the first time, Renzey offers his perceptive insights on how to play winning poker. For Fred's 13-page blackjack booklet "Ace/10 Front Count", send $9 to Fred Renzey, P.O. Box 598, Elk Grove Village, IL, 60009

Books by Fred Renzey:

> More Books By Fred Renzey

Fred Renzey
Fred Renzey is a high-stakes, expert poker player. On a daily basis he faces--and beats--some of the best players in the country in fierce poker room competition. Now for the first time, Renzey offers his perceptive insights on how to play winning poker. For Fred's 13-page blackjack booklet "Ace/10 Front Count", send $9 to Fred Renzey, P.O. Box 598, Elk Grove Village, IL, 60009

Books by Fred Renzey:

Blackjack Bluebook II

> More Books By Fred Renzey