10 Things Most People Don’t Know about Casino Gambling

You don’t need to spend much time in a casino before learning what roulette is. It’s the game with the spinning wheel and the metal ball. You bet on which number the ball lands on.  In fact, there are a bewildering number of ways you can bet on roulette. You can bet on a single number, 2 numbers at a time, 3 numbers at a time, etc.

You assume that you’re betting $100 per spin on black, for example. Then you assume a perfect set of 38 spins. (There are 38 numbers on the wheel if you include the 0 and the 00.) You’ll win 18 times, because 18 of the numbers are black. You’ll lose 20 times, because 18 of the numbers are red, and 2 of the numbers are green. This means you’ll win $1800 and lose $2000, for a net loss of $200. The casino’s edge is the average amount you expect to lose per spin, expressed as a percentage. That just means you divide 200 by the 38 spins, and you get $5.26 per spin. That’s 5.26% of $100.

Many gambling experts measure how good or bad the odds of a casino game are by looking at the house edge. This is a fair way to do it, although it doesn’t account for factors like how many bets per hour you’re making. When you compare roulette to blackjack or craps, it looks like a lousy bet. If you use basic strategy when you play blackjack, the house edge falls between 0.3% and 1%. If you stick with the pass line bet in craps, the house edge is only 1.41%.

You can do the same calculations for the house edge here. You bet $100 on red 37 times in a row. You win $1800, but you lose $1900. This makes your net loss over 37 spins $100. $100 averaged out over 37 spins is $2.70 per spin. If you can find a roulette game with a single zero, ALWAYS play that game over a roulette wheel with 2 zeros.

 
I mentioned that the pass line bet at the craps table has a house edge of only 1.41%, and that’s a great deal. But there’s an even better bet at the craps table that isn’t labeled. It’s called the “odds bet” or the “free odds bet.” When a shooter makes a come out roll in craps and sets a point, you can place an additional bet called the odds bet. This bet pays off at the same odds as you have of winning the bet. This mean that the bet has no house edge at all.

The following are the possible point numbers in craps:

• 4
• 5
• 6
• 8
• 9
• 10

The odds bet pays off when the shooter makes the point before rolling a 7. If the point is 4 or 10, the bet pays off at 2 to 1 odds. If the point is 5 or 9, the bet pays off at 3 to 2 odds. If the point is 6 or 8, the bet pays off at 6 to 5 odds. I should point out that you’ll lose the odds bet more often than not, but when you win, the payoff is enough that in the long, you’ll break even.

The more you can bet, the lower your cumulative house edge becomes. The pass line bet plus the free odds bet is the best bet in the casino that doesn’t involve any kind of skill. (Counting cards plus basic strategy is a better bet, but it takes tremendous skill. Video poker requires being able to choose the right pay table and then making the right decisions on every hand.)

 
Some players have a simple system for roulette. They sit at the table and wait until a certain color comes up a certain number of times in a row, then they bet on the opposite.

Here’s an example:

My friend Brian likes to wait until red has landed 4 times in a row. At that point, he figures black is overdue, so he places a bet on black. After all, the odds of red coming up 5 times in a row is pretty low. And in the long run, we know that the game must eventually even out so that black and red come up close to 50% of the time each.

There are 2 flaws with this kind of system:

The first is that you’re not betting on the ball landing on red 5 times in a row. You’re betting on the results of the next roll. The other events have already happened. The probability for that next roll doesn’t change based on the previous rolls. There are still 38 numbers on the wheel. 18 of them are still red. The probability of a red result is still 18/38, or 47.37%.

Trying to make money via a hot streak or a cold streak is a fool’s errand. The 2nd flaw with this kind of system is that it assumes that the long run is much shorter than it actually is. Sure, the results will even out in the long run, but the long run means tens of thousands of spins of the wheel. 5 results in a row certainly does NOT constitute anything close to the long run.

 
I used to work for Hotels.com. I learned quickly that hotel rates in Las Vegas are managed more aggressively than hotels in other parts of the country. Hotel prices are a function of supply and demand. If you’re operating a 1000-room hotel and casino, and you have no reservations book for a specific night, you’re going to sell rooms as cheap as possible—especially if the specific night is coming up soon.

In fact, the average hotel rates on Friday and Saturday nights are probably at least double what the rates would be during the week. Want to save money on your next trip to Vegas? Try to book your rooms in the middle of the week instead of on the weekend. Keep in mind, though, that Vegas is also home to all kinds of conventions and events. When a convention is in town, you’ll pay higher hotel rates just because a larger percentage of rooms are booked during the event.

At 1st glance, video poker and slot machines look about the same. You have a payline, you have symbols on a video screen, and you get payouts based on the combination of symbols that appear on that payline. But there are some big differences.

Slot machines don’t give you any information about the probability of getting any particular symbols. A cherry might be programmed to show up once out over 8 spins or once out of every 24 spins. Sure, a slot machine has a pay table that tells you what payouts are triggered by which combinations. But without the corresponding probabilities of getting those combinations, you don’t really know anything about the payback percentage for the game or the house edge.

On the other hand, a video poker machine uses a virtual deck of playing cards. The odds of getting a specific card or a specific kind of card are based on a 52-card deck. The probability of getting an ace is 4/52, or 1/13. The probability of getting a heart is 13/52, or 1/4. Since you have both the probabilities and the payouts for the various combinations, you can crunch the numbers to get the payout percentage for the game—assuming you make optimal decisions on every hand. This makes video poker superior to slot machines in the respect that you can choose between better games and worse games.

On top of that, the average slot machine game probably has a top payout percentage of 94%. Most are probably considerably lower than that, especially if you’re not playing in a competitive casino like the ones in Vegas. (Good luck finding a slot machine with a 90% payback percentage in Oklahoma, for example.)

But most video poker games have a payback percentage that starts at 93% or 94%, and they go up from there based on how good the pay tables are. With a little study, you can get much better gambling from video poker machines than you can from slot machines. You also have the additional intellectual stimulation of deciding how to play each hand.

 
 
The most common betting system in existence is the Martingale System, where you double your bet when you lose, and re-double your bet when you lose again, and so on until you win. At 1st glance, this system seems foolproof. Your goal is to have a net win after the progression equal to the size of your original bet. If you continue with the system, this will happen pretty often, too.

The problem with this system is that long losing streaks are more common than you think, and when you’re doubling your bet size, the amounts you’re having to bet get bigger than you’d think. Most casinos have a maximum bet of $500 on the even money bets at the roulette table.

How many bets does it take to reach $500?

• $5
• $10
• $20
• $40
• $80
• $160
• $320
• $640

You only have to lose 7 times in a row before your system breaks down in the face of the casino’s betting limits. That sounds next to impossible, but it happens several times a day at every casino offering roulette. Also, think about what you’re having to risk on those later spins just to get a net profit of $5. If you place that $320 bet on your 7th bet and win, you’re only up $5. But you had to risk $320 to get there. And you’ve already lost $315 at this point, too.

 
You don’t really have to memorize which cards have already been played when you’re counting cards. And you don’t need to know which cards are in the deck or be able to predict what’s about to be dealt. You only need to track and estimate (in a rough way) what the ratio of high cards to low cards is in the deck.

Most people just add 1 to the count every time they see a low card come out of the deck. When a high card comes out, they subtract 1 from the count. When the count is positive, it’s time to raise the size of your bets. But in another respect, counting cards is harder than that description might make you think.

Casinos don’t like it when you count cards, so to pull it off, you need to be able to count cards without looking like you’re counting cards. That’s tough. Casinos are loud, distracting places. It’s hard to concentrate in such a place to begin with. To concentrate without looking like you’re concentrating adds a whole new layer of difficulty to the task at hand. So yeah, counting cards is both easier and harder than you think it is.

 
Some players think that the casinos and their managers get mad when you win. They even suspect the casinos of changing the odds on the games to catch up.  These players aren’t looking at the big picture.

Not all online casinos are honest, but the paranoid ravings of some players in gambling forums should be ignored. That’s because online casinos, for the most part, understand that there’s more money to be made in the long run from offering an honest game and not cheating. You’ll see plenty of conspiracy theories based on anecdotal evidence when you read player accounts on forums, but most of the time, these players don’t offer any kind of evidence that anything unusual has happened.

Gambling—even at an online casino—involves short term variance. Anything can happen over 100 slot machine spins—anything at all. A losing streak doesn’t mean the casino is cheating. It just means you’ve hit an unlucky streak. You’re more likely to encounter a casino with confusing terms on their bonus conditions. Or you might find a casino that delays payouts on your winnings. But cheating? It’s rare.

 
Here’s what the IRS has to say about gambling winnings:

If you gamble at a casino regularly, you should keep a diary of your activities—especially your wins and losses. If you win more than a certain amount, the casino will report your winnings to the IRS. They won’t report your losses.

But you ARE allowed to deduct your losses from the amounts of your winnings. This way you only pay taxes on your net win.  You CANNOT deduct more from your gambling losses than the amount you’ve won. In other worse, if you have a $3000 win an $4000 in losses, you can only deduct $3000 of those losses.  In effect, you’ll avoid paying taxes on the $3000 in winnings because you lost more in the year than you won.