From: breid@pyrhard2.eng.pyramid.com (Bill Reid)
Newsgroups: rec.gambling
Subject: Re: Betting both sides to get Comps
Date: 18 Aug 92 22:46:27 GMT
Organization: Pyramid Technology Corporation, Mountain View

In article <1992Aug18.111300.22804@trl.oz.au> emmerik@titan.trl.OZ.AU (Mike VanEmmerik) writes:
>jacobs@cs.utah.edu (Steven R Jacobs) writes:
>
>Ok, I looked it up. For 1986 (or possibly 1982-1986 averaged) the
>industry total casino win percentage for Roulette was 24.8%. 

Which is the "hold"/"drop".  When you get chips at the table, 
they put your cash in the "drop" box.  Every hour or so, the guard comes 
by, removes the cash-stuffed "drop" box, and he and the pit boss count 
the chips in the rack.  Then they set up the rack with a predetermined 
amount of chips, and remove the chips in excess of this amount.  These 
chips removed are the "hold" (what the players lost).  So ONCE AGAIN, 
HOLD/DROP=WIN PERCENTAGE.   

>So you tell me, are they
>making money from expectation, or as a result of variance and the poor
>betting patterns of the average gambler?

I'll tell you, they make it from expectation.  They would make it more 
surely without variance, but then nobody would play the game.  

>Sure, variance lets the average player win almost half of the time, but
>typically players just bet it all back again until the next downswing
>wipes it out, and they never get to the theoretical expectation because
>they have insufficient bankroll.
>
Yes, that's the ticket...what we really need is a "log optimal" roulette 
strategy.  It will be developed soon, not long after Steve Jacobs 
perfects the "log optimal" craps strategy (right after the "log optimal" 
BJ strategy is finished, sometime in the year 3067).  Steve realized 
that the standard Martingale was not 
"log optimal" for craps play because you risk 
$128 to win $2 after 7 losing bets, so he deduced it would be better 
to use a b^7 scheme, where you risk $128 to win $126 after 1 losing bet.  
Last I heard he brought the entire power grid of the western US trying 
to compute the "crossover point" to make craps winnable.  Stay tuned.

>Hmmm. I'm starting to suspect a misunderstanding of terms. The same
>table quotes "Win" as 9,247 (million $US, I think) and "Drop" as 37,344.
>Divide the first by the second, and multiply by 100%: 24.8%. I assume we
>mean the same thing by "Drop" and "total action".

When you "assume" you make an...oh, never mind.  "Drop" is the cash that 
players trade for chips to play the game with.  Total action is the sum 
of all bets made by players when playing the game.  The total action is 
MUCH greater than the drop, if the players play for any length of time.  
If you buy in for $40 (your "drop") at a $2min table, after an hour 
you will have bet about $200 "total action".  The "hold" will be, 
within the bounds of variance, expected value*"total action", conversely,  
if you divide the "hold" by the "total action", you get expected value 
(+- a sigma or so).

>>In fact, the casinos would be smart to *encourage* variance reducing
>>techniques by the players.  When you reduce your variance, you reduce
>>the variance for the house as well.  

Exactly.  Which makes you wonder about the smarts of a guy who writes 
a book on casino management telling you to be on the lookout for these 
types of plays.  If you actually bought this stuff, at least you 
would be able to fit in intellectually with 
other pit bosses, so I guess it qualifies as "training material". 
 
>Simultanously betting red/black
>>on roulette or pass/don't at craps GUARANTEES that the house cannot
>>loose money.  This reduces the casinos risk of ruin to ZERO.  They
>>wouldn't have to keep large sums of cash on hand to pay the winners
>>if everyone played this way, since there would be no winners.

In reality, the large number of non-corelated decisions taking place 
in a big casino virtually guarantees they never have a losing day, so 
they keep relatively little cash on the premises.  In the rare instances 
where their bankroll is dented (and it happens occasionally, which 
should be a lesson to BJ "team players"), they phone up a bank where 
they have a credit line, then issue a cashiers check to the big winners.  
They can usually repay the loan within a day or so, so great is their 
money-making ability.