A few years back I cranked up a “get out of your rut” series on the Axis Power Craps forum. The idea behind the article was simple enough. If you’re continuing to do the same old thing at the tables year after year and you’re not getting the kind of results you want then maybe it’s time to do something different.
It’s easy to get in what some people call their “comfort zone.” But sometimes you have to get a little uncomfortable to make progress. Sometimes what we think of as a comfort zone is nothing more than a rut. And as Zig Ziegler once said, “a rut is nothing but a grave with the ends kicked out.”
Whenever we do a betting class at one of the seminars we’ll typically play a mock game for one turn around the table. Everyone plays their favorite strategy. We bet on shooter’s with strong SRR’s who are tossing with an advantage. And yet, in most of those sessions at least half of the class comes up losers.
What? You mean you can play with a positive expectation and still lose? Of course you can. Professional card counters sometimes take horrendous losses. It’s no different than a “bad beat” in poker. You had an edge. You made the right moves. But the other guy got lucky. And thanks to things like variability and volatility we can still expect to see significant bankroll swings in any casino game – positive expectation or not.
In fact, volatility has a much greater impact on short run play than EV. That volatility, which is a function of standard deviation, is why it is entirely possible to bet profitably on the randies over the short run. Yeah, I knew that would get your attention. I’m not suggesting you rush out and bet on every shooter at the table. Over the short run you may win or lose betting on randy, but over the long run you’re pretty much assured of a loss betting on negative expectation shooters. If you’re mathematically inclined and would like to read some supporting documentation to that effect then feel free to Google the “square root of time” rule on the effect of time on your bankroll under different risk models (boring). It’s a “dry” subject but one you need to know.
Betting on DI’s may also result in a short run win or loss. But again, falling back on the same rules, you’re almost assured of a WIN over the long run if you play with positive EV. I said “almost assured” because it is possible to make decisions that pretty much assure you of long run losses – despite playing with positive EV. What are some of those decisions? Well, there are several but today we’re going to take a look at just one:
Under-Capitalized Play
What do I mean by under-capitalized play? Simply put, you do not have enough bankroll to sustain your level of betting. You must have sufficient bankroll to manage the volatility issues. And you will experience volatility.
An individual playing an even money game with no advantage or disadvantage can still expect to have about five consecutive losing sessions out of every thirty sessions played. You will, in fact, have more than five losing sessions total, but those five will come back-to-back. Let’s say you have a $300 loss limit for your sessions. Five in a row will set you back $1500.
If you are playing with about a 1% advantage then you may play two or three times as many sessions without hitting a stretch to five consecutive losers. But you will still experience long dry spells where you cannot win. And remember, we’re only talking about consecutive losing sessions here – not the odd session or two here and there where you experience a downturn.
According to 2005 Las Vegas Convention Bureau statistics, the average gambler brings $627 to play with. If you’re traveling with a non-gambling spouse or significant other then you’re probably packing about $1250 between you. Since most DI’s consider themselves to be serious recreational gamblers I’ll make some allowances and double that. We’ll assume that you’re packing $2000 so play with in Sin City. That string of five consecutive loss limit sessions could put quite a dent in that, couldn’t they?
Now let me ask you another question. Do you have $2000 in bankroll to go play right now? I’m not talking about the rent money or the car payment money or the little bit of cash advance money you have left on your credit cards after the holidays. I’m talking about $2000 in cold, hard, disposable cash? I suspect many of us don’t. Nevertheless, we’ll use that number.
The average Las Vegas trip lasts three-and-a-half days, and recreational players typically get in about four hours play a day. DI’s, of course, put in more time than that but we’ll go with that number and assume it’s broken down into three sessions lasting about an hour and twenty minutes each. That’s around ten sessions on your three-and-a-half day trip.
Based on YOUR half of that $2000 trip bankroll, that allows you about $200 per session to play with. If you maintain a 50% los limit then you really have only have $100 to risk. And with that small of a bankroll I can pretty much guarantee that you won’t have to wait thirty sessions before experiencing five consecutive losers.
Know what the number one cause of failure with new businesses? Under-capitalization. And an under-capitalized DI is no different than any other business. Without working capital – you’re never going to make it. The gap between your “want to” and your wallet is just too great. So what do you do? You have to begin at the beginning.
Any good business begins with a business plan. Begin by taking time to commit your objectives as a DI in writing. Perhaps that objective includes a couple of trips to Vegas as well as play at your local casinos. Put that in the plan. Maybe you want to attend a craps clinic to improve your skills. Put that in the plan. How about taking on the task of training another shooter – your significant other, perhaps – to take up some of the slack during your casino sessions? Put that in the plan as well.
Next, look around at others who are successfully doing what you want to do with your craps business. How have they structured their businesses? How are they capitalized? Is there a lot of competition in your area? Will another successful DI in the market bring added heat to everyone? What if your local casino suddenly decided no more dice setting? Would that impact your business?
Based on your historical return on investment, how much do you think you can earn by working your plan? What was your bankroll level when earning that return? How much return do you want to make under the new plan? How much bankroll will you need to get there? Remember, if you managed to grind out a $1000 win for the year playing with a $2500 bankroll then all you have to do to win $100,000 a year is play with a $250,000 bankroll and adjust your bets proportionately.
Once you’ve established the framework of your business plan go ahead and put it into action. Look for creative ways to build your bankroll. There’s a buyer for every piece of garage sale junk you own over on E-bay. Those aluminum cans you toss in the trash can be recycled for cash. That cash back you get on your credit cards at the end of the year can fund another six and eight. And a portion of you income tax refund can fall right to your bottom line. Then, when your bankroll is where it needs to be, adjust your betting strategy accordingly. Risk a little more when you have an edge. Quit betting on the random rollers. Focus on surviving the short run so you can experience the joys of winning over the long run.
Remember, the day is going to come when you are going to have five – or maybe more – losing sessions in a row. If you have sufficient capital you will survive. And if you’re playing with a positive expectation you will eventually prosper. But it’s only when you start to look at your play within the frame of years of play – and perhaps even a lifetime of play – that you really start to see long run profits.
