Wednesday, August 22, 2012

Is cynical, self-serving disinformation ever acceptable...or is it only OK in an election year? Seems like telling the truth is the old-fashioned way to go these days!

I ask the question only because every once in a while, I get a reminder that the people who profit by defending the status quo in gambling will do pretty much anything to keep punters in the dark.

Here's an example of what I'm talking about, sent to me by a reader who wanted to know why I'd waste my time butting heads with the powers that be in the world of betting (by which I mean casinos, bookies, and the legions of shills who make a living preaching that it's fun to lose).

I have commented on this prime piece of house-sponsored hogwash before, but it's worth revisiting because new readers are discovering this blog around the clock, day after day, and many of them actually believe that casinos have no interest in controlling how players bet.

And that's really the point: On the face of it, casinos don't decide when or if we bet, or how much, and they don't tell us when to quit (unless, of course, we're winning too much).

But in reality, casino operators have a complete grasp of player psychology, making the most of it to herd us like sheep, not cats.

And while everyone running table games knows that they can be beaten by progressive betting, they also know that most players ruin their own chances of winning in the long run by getting into games with woefully inadequate bankrolls, and betting a suicidally tight spread.

It's behavior the house does its darnedest to encourage.

A dangerously tight spread, the math tells us, is anything less than 1 to 100, meaning that a player starting out with a $10 minimum bet will have enough fire power to bet as much as $1,000 when necessary.

Since even a doomed spread of 1:100 is beyond both the inclination and the means of more than 99% of casino gamblers, it's possible to conclude that the spread argument is pretty much irrelevant to anyone likely to read this blog.

The casinos know better.

So while they don't control individual players or their individual bets, they use psychology to corral their customers in ways that do, in fact, influence how and how much they bet.

Too many players whose bankroll is threatened by a prolonged losing streak tend to sit tight at the same table, hoping that their luck will change before their money runs out. And they will keep on betting at the top end of their range, ensuring that they will crash and burn sooner rather than later.

The myth the casinos work hard to perpetuate is that the wider your betting spread, the greater your risk.

It's dangerous nonsense.  I'll show you some compelling data on that in a moment.

And because most people never bother to look at the numbers or apply mathematics or logic to their play - gambling is supposed to be fun, right? - they simply don't get that as wide as possible a variation in bet values is the ONLY way to win in the long run.

A 1-10 betting spread is rare among weekend punters (1 to 5 is closer to the norm) so the 1: 100 spread I mentioned above happens about as often as hurricanes in Hampshire.

Table limits discourage wide spreads not for the protection or "security" of high rollers but to greatly reduce the likelihood that a well-funded player in trouble will be able to bet his way out of the hole without switching to a layout that takes bigger chips.

It's just plain common sense: The quicker you hit your maximum bet value, whether it's a voluntary cap or one imposed by the house, the more vulnerable you are to the hazards of negative expectation.

You can even lose money in spite of winning more often than you lost!

That's because most players respond cautiously to winning streaks and reserve their biggest bets for hard times, then can't decide whether to chase a winning streak with continued large bets or drop back to small amounts if they are lucky enough to get even again.

Any time a player has to make a snap decision, he's more likely to make a wrong one than a right one - and that's one of the many reasons why a disciplined betting strategy is the only smart option in a casino.

Target, for example, tells you when to press and when to fall back, and that alone will turn a long-time loser into a consistent winner.

Losing streaks won't scare you to death, once a few weeks of practice have given you the confidence you need - and better yet, you'll stop wasting winning streaks.

Winning streaks are, for a fact, less frequent than losing ones, and Target will show you how to win back your prior losses and make a modest profit time and time again by getting out of the hole in fewer bets than it took you to get into trouble in the first place.

You will consistently win more when you win than you lose when you lose, in other words.

Like a politician on the stump in an election year, the Buzzard of Bovada - author of the timeless twaddle excerpted above - makes sure that there's a kernel of truth in his nutty response about table limits.

It is demonstrably true that as long as a player bets randomly or wagers fixed amounts, then the individual and aggregate value of those bets has no long-term effect whatsoever on the house advantage.

So a "whale" who bets $250,000 a hand at blackjack at the MGM Grand in Las Vegas (see past references to the late Kerry Packer) is no more of a threat to casino profits than someone who bets $10 on every hand or spin of the wheel or whatever.

The big difference is that when the whale flounders, the house will make more money than it would on a thousand or so weekend punters, and that's why when wealthy winners win big, there's a flurry of publicity but when they lose, there is respectful (and grateful) silence.

The temporary wins amount to short-term loans to customers who don't need the money, but getting the word out will hopefully tempt a few more high-rollers away from the competition.

Most regular players long ago learned the value of what's widely known as money management, although many of them are amazingly unaware that "MM" is progressive betting wearing a very thin disguise.

Large casinos with the amenities and resources to attract whales do, as the Buzzard confirms, offer games with a bewildering range of table limits, from maybe $10 to $1,000 through $25 to $3,000 and $100 to $10,000 all the way up to hallowed layouts where bets up to $100,000 are accepted without a qualm and higher limits can be approved.

But if the Buzzard's claim that the house edge is unaffected by bet values were true, tin-pot truck-stop casinos in my home state of Nevada would happily allow their customers to bet whatever they wanted.

They don't because, just like the Buzzard, they know that progressive betting can cause them major headaches and even put them out of business.

So in my immediate neighborhood, $5 to $300 is about as rich as table games get, and $5 to $100 is more common.

Bigger casinos with much higher limits are 20 minutes to an hour away, so whenever I hit the green ceiling at one of my locals, all it takes to win back my losses is a set of wheels and some extra time.

Once again: It's all about the math.

And the math is the reason why Bovada, sole sponsor of the Buzzard's eloquently deceptive website, not only applies tight table limits, but uses software that responds decisively and defensively if an online customer has the gall to get caught using progressive betting.

Bovada is not alone in that: It's just one of many crooked operations that may or may not give you a fair shake if you bet like the sheep you're supposed to be, but will bring the hammer down if you're a consistent winner.

Online casinos are especially vulnerable to progressive betting, because they can't do as their bricks-and-mortar competitors routinely do and walk a progressive bettor to the nearest exit.

But like their land-based cousins, online game operators consider progressive betting to be cheating.  And if cheating a cheater is what it takes to thwart a serious threat to their bottom line, they will do it without a second thought.

Years ago, the Buzzard offered a $25,000 prize to anyone who could come up with a betting method that consistently beat a billion or so computer-generated outcomes, and he still boasts online about his defeat of a system-peddler lyrically named Daniel Rainsong.

The $25,000 challenge is no longer offered, a victim perhaps of a computer age in which proving that progressive betting is a long-term winner is a whole lot easier than it used to be.

When I first started talking about progressive betting online more than 15 years ago, people who share the Buzzard's dedication to promoting the invincibility of the house advantage would create breathtakingly complex simulations that would "prove" that no casino game can ever be beaten in the long run.

The irony is that today, anyone with a decent laptop can download computer-generated data offered online by the Buzzard himself, and use that data to expose the fallacy of the claim that a house edge protected by the math can't be beaten by the math.

Take, for example, the 80,000 or so outcomes contained in 1,000 8-deck "shoes" of baccarat posted by the Wizard of Odds.

The summary above confirms that betting Player only through every hand of every one of those 1,000 shoes would run up against a 1.23% house edge (about right for baccarat) and that someone backing Banker all the way would be at 1.07% disadvantage.

Let's be clear: Betting fixed amounts or betting random values would without a doubt result in a long-term loss.  That's what I'm talking about when I say that the house is protected by the math.

But you can see that a "capped" Martingale played against those same outcomes flips the Player-only outcome from -1.23% of total action to PLUS 2.88% - hardly enough to excite the whales of this world, but proof that progressive betting with a wide spread can in truth undo the house advantage.

The rules applied here were more aggressive than the basic Target algorithm, and I will get to that in a moment.

First, let's take a look at what "woulda" happened if we had created a simulation that acted defensively in a way that a human player does, walking away from any shoe that showed a persistent bias far in excess of standard negative expectation for baccarat (about 1.35%).

We're not doing anything complicated here. We're simply saying that we will stop betting against any shoe in which house gets more than five bets ahead, starting from the first hand (meaning that a five-bet losing streak will only trigger a bail-out if we were even with the house or a little behind before it began).

What we see - no tricks, no lies, no bullshit - is an 85% drop in total action, offset by a proportionately smaller reduction in the total Player win which bumps the player advantage from +2.88% to +7.44%.

Now, I have no quarrel whatsoever with any reader who responds to all this with the complaint that he or she can't possibly afford a 1 to 5,000 spread and that progressive betting is therefore a waste of time.

I'm not here to offer anyone a cheap and easy, risk-free way to consistently win at casino games of chance (or sports betting or horse-race punting, come to that).

The reason for that is that there's no such thing, and anyone who claims otherwise is a liar and (if he's trying to sell you a low-risk betting strategy) a thief to boot.

I have been saying for years that anyone who can't afford to win shouldn't play at all - unless, of course, he or she agrees with the Buzz that losing is fun, fun, fun.

And my only motivation (since unlike the Buzzard of Bovada, I'm not selling anything here) is to demonstrate once and for all that negative expectation can be beaten with disciplined, consistent play...and a ton of money.

Here are the numbers for Buzz's six-deck data set:

Once again, we see that damage control - something the Buzzard and his fellow shills dismiss as an irrelevancy - really is a factor even in simulated game conditions.

I have always found it absolutely preposterous that strategy opponents rely on data sets that are nothing like real play to "prove" that the house advantage can't be beaten.

Regular readers will know that I routinely mock what I call the "inertia factor" - the idea that a real player betting in real time with real money would sit through losing streaks so far removed from negative expectation or any standard deviation that he would lose the farm (and the one next door) before being forced to quit.

So what about the Target rules?

Well, in recent months I have seen people claiming to be unbiased evaluators trying to demolish my strategy by deliberately changing the rules, then going online with elaborate data that strangely does not include an explanation of why the published algorithm was ignored.

I like to think I'm not paranoid, but at times I wonder about the motivation of anyone who would commit transparent fraud in order to prove a point.

Then again, I'm so obsessed with accuracy myself that perhaps I tend to forget how many crooks there are out there!

Let's revisit the simplest version of the Target rules, which are very little changed since 1997, except that they have been simplified and sharpened as much as you'd expect over a span of 15 years.

(I sometimes come under fire from people who say, 'See! You changed the rules! You're cheating!' and I wonder how they feel about evolution, or even the simple process of getting smarter as you get older!).

First, Target accepts the obvious, which is that over time, we're going to lose more often than we win. That's what negative expectation means: more losses than wins and therefore, if you bet flat or randomly, more money lost than won.

It then becomes necessary for us to ensure that whenever we win a bet, we win more money on average than we lose when we lose.

A simple Martingale illustrates the point: -1, -2, -4, +8, -1, -2, -4, -8, +16 gives us two wins averaging 12 units and seven losses averaging just over 7 units.

A Martingale is one effective way to apply progressive betting - or would be if casinos didn't routinely identify its use and interfere with it as much as possible.

Target is an uncomplicated approach to progressive betting that is not quite as blatant as a Martingale.

The first step is to respond to an opening loss in a new series or sequence of bets by increasing the bet value next time, hoping that the most common pattern for both sides in a game of chance - win, loss, win, loss - work in our favor.

I recommend that NB (next bet) should be as close as possible to PB (previous bet) x5, but let's dial that down to x2, then freeze the bet: -1, -2, -2, -2, -2, +2.

At the +2 above, we're -7 in the hole, and Target seeks to recover that loss plus at least one unit, first with an 8u bet and then, if that fails, a 16u bet: -1, -2, -2, -2, -2, +2, -8, +16.

In Target language, the +2 in the example is a "mid-series win" and that's always our signal to get aggressive, however cautious we may have chosen to be after losing the first bet.

(You'll find more info about how far you can go with Target rules variations on the Sethbets website).

Assuming a win at +16 above, we see six losing bets and two winners, which indicates a 50% house edge. Never mind, we won anyway, with wins averaging +8u and losses at just under -3u apiece.

(These are big files, sometimes hard to read in the blog platform, so I'll gladly sent more legible versions to anyone who e-mails me)

What we see above is an application of the simplest Target rules set, along with "skips" applied whenever we start to get into serious trouble.

This time, though, we're not skipping entire shoes: We're assuming Big Table play that permits us to sit out one or more rounds any time we choose, avoiding long losing streaks but getting back in the game in response to a mid-skip Player win.

And let me stress that these skips are entirely automated, tied to a consistent trigger (-2 rather than -5, because in essence we're switching rather than skipping) and not to bet values.

There's one sneaky little wrinkle in the summary above involving an aggressive response to ties.

I prefer blackjack to baccarat, and pushes or ties have always irritated me because they're such a waste of time (and I cringe whenever I hear another player or a dealer say 'A push is as good as a win,' which happens way too often).

So...I'll usually double my bet after a tie, and double it twice after a "money tie" (7, 8 or 9 in baccarat, 19 or above in blackjack).

It's not about math so much as doing what works.

Here's Buzz's 6-deck sample without tie boosts:

And here's how the same set looks x2 after any old tie and x4 after a money tie:

The most important thing to watch out for in all these summaries is the screaming red-and-white EXPECTED OUTCOME number to the right of overall Target's win value.

The house edge in this set was 1.68% and the Buzzard of Bovada will tell you that only by cheating could you achieve a positive outcome, or even a negative one that was slightly less than -1.68% of your total action.

But keep in mind that Buzz and his buddies are paid to lie to you, and they do it very well indeed.

Could you afford to bet the way Target did against this data set?

Probably not.

But after a few wins like this, occasional tail-spins and prolonged recoveries (courtesy of "standard deviation") become a diminishing threat.

The 8-deck Buzz set was tough sledding for Target - but the strategy came out ahead with an average bet that, at less than $2,000, was a tiny fraction of what many high rollers push into play with batting an eye.

Big difference: the high rollers lose. Not every time, but always in the long run. It's the arithmetic!

Note that the house edge for this sample was a rather suspicious 2.57%, or about double the accepted negative expectation for baccarat.

Here's how Target did bumping the bet after a tie:

No doubt Buzz will come flapping down out of his dead tree, squawking that I cheated, I cheated, I cheated.

Cheating didn't happen at my end, and won't ever happen.

And let's face it, as a shill for a crooked online casino, that's his job.

So, what about betting these Buzzard baccarat sets (1,000 shoes apiece!) with a spread far tighter than 1 to 5,000?

Here's the compelling data I promised earlier:

The screen shots here should pretty much explain themselves to the smart people who read this blog - but I'll risk offending you by pointing out that the average bet value, and therefore the average overall risk, is LESS at a 1 to 5,000 betting spread than it is at 1 to 500, and only fractionally more than at 1 to 100.

Mathematically, that makes perfect sense, because Target and most other variations on the proven concept of progressive betting push bet values high until recovery, then drop them way back to the minimum until another threat comes along.

At lower spreads, you hit the maximum - say $1,000 at 1 to 100 from a $10 minimum - and sit there forever, because you can NEVER recover your losses.

That's what the house wants you to do, because flat betting cannot do other than succumb to negative expectation in the long run, and that's a fact.

Too rich for your blood?

Well, as I have said here many times, I'm sorry about that.

You have to win more when you win than you lose when you lose in order to offset the fact that in the long run, you will always lose more often than you win.

And once again, I want to respectfully remind you that If you can't afford to win, perhaps you shouldn't play?

Just a friendly suggestion...

To put the whole question of deliberate casino-sponsored disinformation into context (and hopefully to counter claims that I'm paranoid!), I'd like to offer a little extra insight.  Just suppose that you're a casino operator or a bookmaker, and you know from experience that there are players who treat your bottom line like a personal cash machine, risking relatively small amounts, and walking away with profits day after day.  You know exactly how they do what they do, and you're basically powerless to stop them, preferring to eat the losses rather than to make a fuss and draw attention to a method that might spread like wildfire, bringing in punters with big money behind them who could do you even more serious harm. Your greatest enemy isn't the gambler, who's almost always a self-destructive, under-funded dreamer who gets ahead of the game just enough to keep him hooked, and always falls behind again.  Your nemesis is the bettor who is looking for a reliable alternative to conventional investments such as stocks and bonds or real estate.  He's not greedy, and in the wake of the latest worldwide recession, he's not risk-averse either.  He's patient, disciplined, well-heeled and always on top of the numbers, confident that short-term losses will inevitably turn around in time, and reward him with a profit that's puny by most gambling standards, but far exceeds anything on offer from any bank or stock market.  In fact, as a casino operator or a bookie, you're his bank.  And you're none too happy about the fact that his withdrawals far exceed his deposits, and the difference is coming out of your pocket.  So what do you do when someone goes public with detailed information about a betting strategy that you know has been costing you money pretty much every day that you've been in business?  Do you ignore the threat and hope it will simply go away?  Or do you go on the attack?  Think about it!     

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. One more piece of friendly advice: If you are inclined to use target betting with real money against online "casinos" such as Bovada (formerly Bodog, now with a new name that makes about as much sense as the old one!), spend a few minutes and save a lot of money by reading this.