Monday, April 12, 2010

Bodog is the only online casino endorsed by the self-annointed Wizard of Odds, so we can trust it completely, right? So far, that's a NO!

UPDATE: Monday, April 27, 2010. If Bodog or any other online casino chooses to "protect" its table games from progressive betting by tinkering with what is claimed to be random output, it's a matter of concern for everyone, including those players who bet within a narrow range. A reactive game (one that responds differently to different styles of betting or play) is a crooked game. It's that simple. It's ironic, because the conventional wisdom is that progressive betting is long-term suicide, and if that is true, casinos everywhere should welcome and even encourage it. Because it isn't true, Bodog, and presumably other online operations as well, must feel justified in enforcing a crackdown that requires them to cheat. Online betting is of course "illegal" thanks to the lobbying clout of conventional casinos, and is therefore unregulated. So the only regulation we can rely on is an across-the-board boycott of online versions of all the popular casino table games. Michael Shackleford, aka the online Wizard of Odds, has dismissed my comments about Bodog's probably crooked game as "just the ramblings of a sore loser," confirming that his loyalties lie elsewhere than with the players he pretends to work for. No doubt he would say the same to the victims of Bernie Madoff!

(Monday's 7-dog Trial picks are at the bottom of this different kinda dog post...)

Let's first of all concede that anyone putting himself out there as an expert players' advocate has to make a living just like the rest of us, and that's hard to do when your advice is free of charge.

So a gambling website that does not have real-money games has to pay for itself, and probably the only businesses willing to write checks in exchange for endorsements are casinos, conflicts of interest be damned.

Next, let's accept that a truly exhaustive test of the honesty of an online gambling site that does offer games requires thousands upon thousands of outcomes with every spit and cough analyzed to the nth degree.

Then what the hell, how about we allow reality a look-in here and recognize that most online punters need to know that they are getting a fair shake over just a few dozen bets, not a "representative sample" with multiple zeroes and commas?

Bodog's blackjack simulation allows bets from $1 to $500, and like every other online "casino" it is potentially more vulnerable to a progressive betting strategy than its bricks-and-mortar competition.

That's because in a real casino, eagle-eyed dealers and pit bosses can step in and thwart a Martingale or double-up bettor by marching him smartly to the door.

Here in Nevada, progressive players do their best to hide their agenda by betting just a handful of rounds against any one game, wearing out shoe leather as they trudge from layout to layout and casino to casino in search of the single win that will turn all their prior losses around.

Blackjack is their game of choice because a natural payout that coincides with a fat bet will give them at worst a 20% "bonus" on top of the chips they need to stay in the game.

(A quick sidebar here, Judge Ito: Could it be that the growing trend toward 6:5 payouts on naturals, down a whopping 60% from 3:2, has something to do with the Martingale players whom the "experts" pretend do not exist?)

Without debating the merits of progressive betting, let us now ask if any counter-measures that online casinos might put in place to defend themselves against it must also have a negative impact on random bettors.

The answer, of course, is that any self-serving change that Bodog or its competitors choose to make to a standard casino table game is sure to hurt everyone.

And if such a change is made without it being clearly and openly announced before the first card is dealt, then the "casino" is, by default, guilty of fraud and deception.

As announced in previous posts, I am ramping up my online betting activity (from zero to whatever the traffic will bear!), and in preparation for that, have been doing some research.

I have spent most of my time playing blackjack "for free" against Pinnacle's virtual casino, because Pinnacle offers the 1 to 5,000 spread that is ideal for target betting (although very, very, very rarely needed, thank the gods of gambling!).

So far, I have put in less than 10 playing hours at this experiment, plus about double that time to process all the data from pencil logs that tracked every outcome.

I play as close to a perfect blackjack basic strategy game as I can get, given that Pinnacle does not permit re-splits but does allow post-split double-downs.

Right now, the overall house edge is not a house edge at all but a "player advantage" of +2.4%.

That's unusual after some 2,300 rounds against a game of chance with a negative expectation (and there is no other kind) but the cumulative HA has been at or above (-)1.0% for most of the time I have been online.

My funny-money "win" to date against Pinnacle stands at $28,000 - or about $3,000 an hour, reduced to a little under +$20,000 or $2G/hr if the -$2,500 stop-loss I have mentioned in earlier posts is applied (twice so far).

Now, I do not anticipate that if and when I begin real-money betting against Pinnacle's blackjack game, I will maintain that level of profit.

But I do need to know that the game is not rigged against me.

The bad news is that (for economic and logistical reasons that make sense) none of the online casinos offers a bet-by-bet log of its games unless real money is at stake.

So taking $500 of my profits from the ongoing 7-dog sportsbook trial, I logged on to Bodog for a test run.

I picked Bodog for two reasons: 1) The Wizard of Odds, an erudite and articulate fellow with an excellent reputation as an honest broker in the world of gambling, says again and again on his website that Bodog has straight games; 2) Depositing money at Bodog requires just a few clicks, whereas most Internet "casinos" set up a tortuous fiscal fire-walk that can take days.

Knowing that every online "casino" is especially vulnerable to progressive betting, I set out to discover if more high-value bets are lost than low-value ones once wagers climb substantially above the $1 minimum.

If so, it would suggest (but not prove without thousands of outcomes as evidence) that the result of each round is not random but reactive, with the game algorithm deliberately tweaked to cost the online player more big bets than little ones.

And if over a sample of rounds that is representative of an average player's resources of time and money, a house bias greater than the standard negative expectation for the game is found, then punters who trust the endorsement of the Wizard of Odds need to know about it.

Bottom line:

a) The house edge for my 119 blackjack rounds against Bodog's game was (-)15.13%, or about fifteen times standard negative expectation with perfect basic strategy applied.
b) Adjusted to exclude 13 pushes, Bodog's edge was an even more astounding (-)16.98%.
c) For bets below $100, there were 41 winners and 57 losers, giving the house an edge of (-)16.33%.
d) For bets of $100 or more, there were 3 winners and 5 losers, equal to an increased house bias of (-)25.0%.
e) Target betting is intended to win more when it wins than it loses when it loses, delivering an overall average win value (AWV) that exceeds its average loss value (ALV) even when temporarily unrecovered LTDs produce a negative final outcome; the Bodog log confirms an AWV ($25.56) that is 6.65% LESS than the ALV of $27.32. That is an unprecedented statistical anomaly.

Regardless of whether or not Bodog's virtual games are as fair and honest as The Wiz says they are, the rules of fair play require that I allow the following:

1) 119 (or 106) rounds do not add up to a statistically representative sample.
2) I did not like losing my $500 (plus $120 in bonuses), even though I expected that to happen going in, but I am not a sore loser seeking cheap revenge!

Also in fairness, I ran a couple of tests using random numbers to set both the outcome of each round and the value of each bet, then the same random numbers (with the house edge set at a high 1.5%) with a Martingale applied.

In those parallel tests, there were 119 rounds, as in the Bodog logs, and here's what happened:-

Naturally, punching the recalc button in Excel will give a different random result every time, and I deliberately chose one with a high house edge that mirrors the nasty negative number Bodog delivered.

What I wanted to see was a comparison between the house edge for bets above $99 and those at or below $99.

Neither random run-through with the house edge set at a high (-)1.5% produced numbers to match Bodog's apparent tendency to target bigger bets for a higher percentage of losses.

None of the data presented here are definitive.

But what I see is possible evidence of hidden manipulation of at least one popular casino table game that a self-styled leading gambling expert claims is safe, fair and honest for all players.

I ran card distribution and card count tests that did not uncover any glaring anomalies.

But it is no great challenge to stick within finite parameters when it comes to available "cards" while ensuring that disproportionate and statistically anomalous percentages of large bets go south, guaranteeing an overall house win.

Given that the vast majority of casino table game players bet a tight spread that maxes out at 1 to 10 and is generally closer to 1 to 5, the fair way for an online "house" to protect itself from progressive punters is to limit bets from $1 to $10, $5 to $50 and so on, with bettors prohibited from virtual table-hopping.

That would make a lot of potential customers madder than wet hens, and put a major damper (pun intended) on projected profits.

But it would, at least, be an honest and up-front solution.

My guess is that just like their non-virtual competitors, online casinos may privately justify any clandestine jiggery-pokery by telling themselves that progressive betting is no better than cheating.

That's crap, of course: set up a game that fleeces the vast majority of your clientele, and you had better be ready to pay out to a few players who know how to beat it.

Think of it like basketball: First, we devise a game that sets hoops just enough beyond the reach of regular humans to make skill and accuracy essential, and then we breed super-tall players who can drop a ball in the net almost without standing on tiptoe!

Are you a cheat if you stand seven feet tall and have arms longer than most people's legs? Hell no! You're just a player with a slight added advantage.

The Wizard of Odds will tell you that progressive betting is suicide, without informing you that, absent excessive luck or cheating, it is also the only way to win in the long run.

That assumes, of course, that whatever game you choose to play is not crooked.

I was dragged kicking and screaming into the world of sportsbook betting, and after more than six months, have come to agree with my friend "Peter Punter" that it offers a unique profit opportunity for those of us who are not bookies.

Again, target betting - aka progressive betting - is demonstrably the only way to go, since fixed value or random wagers will always fall foul of the house vigorish in the end.

Backing underdogs is especially attractive, because payouts with a potential value above even money that is always known ahead of the game help keep down the overhead.

Obviously you can't know in advance that your next pick will be a winner (wouldn't we all love crystal balls!).

But if your win target is $100, your last bet cost you $600 and the odds you've bought are at +120, you can get ahead with a $600 wager instead of the $700 you would have to risk at even money.

Every little helps.

Betting sports online holds no Bodog-ish hazards because the house cannot manipulate a real-world game's outcome the way it can rig the upshot of a game of chance played out on its own server if it chooses to do so (and let's hope it doesn't!).

Underdogs across all sports except pro-football tend to win around 45% of their games, so you need average odds of a tad better than +120 to stay in the game, assuming flax or fixed bet values.

Toss target betting into the mix and you have a recipe for long-term profits.

My Mom always taught me that it's wrong to talk about anyone behind their back.

So since I doubt that he is among my millions of (oh, OK, several) regular readers worldwide, I plan to copy this post to the Wizard of Odds and let him pass it on to his Bodog buddies if he chooses to do so.

Any response will be posted here.

Underdog selections for Monday, April 11:

NBA: Indiana Pacers 504 (+140), Washington Wizards 505 (+145), Toronto Raptors 507 (+120), Houston Rockets 517 (+115), OK City Thunder 519 (+110); MLB: Baltimore Orioles 972 (+135), Toronto Blue Jays 974 (+100).

An important reminder: The only person likely to make money out of this blog is you, Dear Reader. There's nothing to buy, ever, and your soul is safe (from me, at least). Test my ideas and use them or don't. It's up to you.