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Expected Loss is Deceiving

Discussion in 'Casino Gaming' started by Ben Jammin, Dec 21, 2012.

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  1. Ben Jammin

    Ben Jammin VIP Whale

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    I recently did some research on expected loss but my math was off. So I found a good site that explains it well, Michael Bluejay's "Vegas Click". He worked for years with Michael Shackleford, the "Wizard of Odds, the worlds foremost authority and renowned gambling expert and author of the book "Gambling 102"

    Basically what it is about is how expected loss applies to gambling, and how much it costs you to play any given game for X # of hours.

    Although most statistics are variable the average tourist plays/gambles about 3 hours per day with a budget of around $400 to $500 dollars. Oddly enough most players expect to lose the lions share of their gambling budget. They come to Vegas with the mind-set that they are going to lose, and so they do!

    But, how much and at what rate, and how many trips back to the ATM or cashier's cage to cash a check, cash advance a credit card or take out a marker?

    You'd be surprised at the numbers. I was. It's mind boggling.

    Those of us that are on this board are worlds beyond the average tourist that doesn't have a clue about money management and what and how to play with simple basic strategy and money management.

    So, take a look at what Michael Bluejay has to say about it.

    His site is a labor of love with no advertising except he likes BoDog, that's it.

    click here:

    http://vegasclick.com/gambling/expectedloss.html


    Thanks!


    .
     
  2. Dpin300

    Dpin300 Low-Roller

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    I find it a ridiculous article. 1000 spins at $1 on red? Who would do that?

    Black jack $5/hand x 100 hands/hour = $500/hour x 16hours ($8000) expected loss ONLY $40 ?!? I can't believe that.

    Unless you want to make your living of gambling I'd say just play and have a good time. And if you can't afford to loose don't gamble!
     
  3. WrongWayWade

    WrongWayWade VIP Whale

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    I think 100 hand/hour is on the high side, you'll only get that with zero or one other player at the table. I usually use 80 per hour as a good average. But his math is right. With good rules the edge on a blackjack game is something like 0.5%. So if you risk $8000 over 16 hours your expected loss is only $40. But the variance on the game is large, so it's easy to see actual results of +$1000 or -$1000 over that same time without trying very hard at all. After all, the variance is what we are 'buying' when we gamble; we want the variance (luck) to swing our way over THIS session.

    'Expected loss' is a perhaps using the wrong word, but that's how it's always expressed. The irony is that actually achieving the 'expected loss' amount is almost impossible, (for that BJ player to actually lose exactly $40 over the 16 hours).

    Think of the expected loss as the midpoint of a bell curve. The ACTUAL results of thousands of BJ players are spread all over that bell curve, but the center is at -$40.
     
  4. Sonya

    Sonya Queen of VMB

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    I don't like the term "expected loss". I don't think people really go to Vegas expecting to lose. Those figures are for hosts and casino execs to keep the edge in their favor and to protect their bottom line.

    That said, I do budget gaming money to lose. I don't go to Vegas expecting to lose. That's bad luck. :wink2: What I do when I plan a trip is that I set a budget. For example (and these aren't real numbers, just go with it)

    Hotel: $100
    Food & Bev: $75
    Transport: $25
    Entertainment: $50
    Gaming: $200

    My favorite kind of trip is where I get a host to comp or discount my room, food & beverage. Even better if I bring home some of the casino's money. We all like that. :) But if I have a bad run at the casino or whatever, I am prepared for that loss. It's in the budget and I can keep the bank account in the black and my husband from divorcing me because I am prepared for that outcome. In the event things run off the rails in the casino, I have a set amount I'm comfortable with losing and then I'm done with gambling for the trip. It keeps me from chasing and I like it when I come home from a trip with enough cash in my pocket to cover all the costs of the trip and still have some left over to go into the vacation account for next trip.
     
  5. MikeOPensacola

    MikeOPensacola VIP Whale

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    Great point Wade, anything can happen in the short run. The casino suits use this mainly as a means to work out comps and such.
     
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  6. theshaah

    theshaah Low-Roller

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    I think it's hardwired into our brains that these games are favored twoards the house therefore we "expect" to lose. I however take that to another level in that if I KNOW that I'm going to lose I tend NOT to play. Then when I do play and win it's gravy! I have been going to vegas for cheap or free for a long time now. I'm looking at going to Aruba this January for vacation. The hotel is a whopping 450 dollars a night. I think I'll bag that...that the entire 450 to vegas with me and spend an entire week for the same price and that would include food and entertainment.

    I doubt I could win 450 in 1 session of BJ in Aruba.

    I can however win 20-30 dollars (the cost of my hotel) and therfore my trip becomes basically free.
     
  7. nostresshere

    nostresshere Mr. Anti Debit Card

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    You can do all the math you want, but most people that walk into a casino with $300 to gamble walk out with nothing. That is a 100% loss.

    LOL - and crying.
     
  8. rgerards

    rgerards Low-Roller

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    blackjack expected loss when playing perfect basic strategy is ~0,5%. But anyone that has spend some time at the tables can confirm that a lot of people play so terrible that the expected loss is indeed 50% and up. I understand losing is a part of gambling,but I really dislike playing games that I do not properly understand.
     
  9. mjames1229

    mjames1229 VIP Whale

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    That is absolutely, positively correct.

    Lately (and this may be just a rough string as the gambling deviation corrects itself) it seems that I go through the first $150 in minutes. The goal has almost become to make the $300 last a few hours.
     
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  10. Kickin

    Kickin Flea

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    You're right. Though it still is described by math but most people look at the math too simplistically. The sentiment of the OP's title has merit because people use expected loss figures too broadly to apply to themselves over the long run when even their own personal long-runs are not really long-runs and bankroll limitations play into that.

    For example, let's say you bet $100 on average (including doubles/splits) and you bring $10,000 for a 4 day trip where you play BJ for 5 hours per day. You would play roughly 2000 hands over those 20 hours (according to casino management numbers).

    To wipe out your entire $10,000 bankroll only 5% of those 2000 hand would have to go to the casino's favor while you split the remaining 95% of hands. Does it sound unlikely for the casino to win 1,050 out of 2000 hands? Not at all. Remember while the house edge is 0.5% on the total action, you can check the Wizard of Odds - the probability of the player winning an individual hand is around 42.4% while probability of losing is over 49% (the balance being a push). And with that small margin of 950 hands won to 1050 lost you would be wiped out, and few would say $10,000 isn't enough of a trip bankroll for 4 days of $100/hand BJ (which includes doubles/splits so really means betting less than $100/hand).

    Yet all the while when you lose $10,000 betting $100/hand, or $1,000 betting $10/hand, or $100,000 betting $1,000/hand over the course of a 4-day trip you might be scratching your head about the beating you took. When its actually perfectly reasonable.
     
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