Other examples of the house charging a commission for a bet are the buy and lay bets in craps, where the payout odds are the same as the true odds, but the player must return 5 percent (or so) of their winnings.
Paying less than the true odds
Another way the casino makes money is to pay out less than the true odds (see the earlier section “Factoring in the odds”). Take roulette: With 38 numbers on the wheel, your odds of guessing the winning number are 37-to-1. So, you bravely place a $100 bet on a single number and hit it. Congratulations! After you quit jumping up and down and kissing the cocktail server, dealer, and anyone else who couldn’t quickly escape, you collect $3,500.
But, wait a minute. $3,500 means a payoff of 35-to-1. What happened to the true odds of 37-to-1? The fact is, even though you win, your payoff is less than the true odds. The bottom line? Casinos take $200 out of every $3,800 wagered, which leaves the house with a hefty edge of 5.26%.
Calculating the Odds in Casino Games
If you’re good at math, you can often detect when the casino payout odds are lower than true odds. (See the section “Factoring in the odds” earlier in this chapter.) For example, with a pair of dice, you have 36 different combinations, so it’s easy to calculate the true odds for any combination of dice. But with other games, the odds can be impossible to calculate. Take slots, for example: The thousands of possible winning reel combinations and ever-changing progressive jackpots make it difficult for anyone to calculate the odds of winning.
This section ties together the joint concepts of payout odds and true odds that will get you on the road to understanding the house edge (or advantage). Armed with a full understanding of that key statistic, you’ll be able to discriminate between good and bad bets in a casino.
Identifying payoff odds
In almost all cases, the payoffs favor the house, and you lose in the long run. However, some bets have no edge at all — for you or the house. Then some unusual situations arise that give astute gamblers an edge.
Zero expectation
When true odds equal payout odds, it’s called a zero expectation bet. Neither house nor player has an edge. This balance means that both sides can break even in the long run. For example, if you remove the two extra green numbers (0 and 00) from the roulette wheel, the game now becomes a zero-expectation game because it has 36 numbers — 18 red and 18 black. Any bet on red or black would be a zero-expectation bet. In other words, when you bet on one color, your chances for winning and losing are equal, just like flipping a coin.
Negative expectation
However, casinos aren’t interested in offering zero expectation games. In order to make a profit, they need to add in those two extra green numbers to change the odds in roulette. Now, when you bet red or black, your odds of winning are
Most bets carry a negative expectation because the house doesn’t give true odds for the payouts (as is the case for roulette). Craps provides another good example. Say you bet that the dice will total seven on the next throw. If you win, you are paid 4-to-1. However, the true odds of this occurrence are 5-to-1 (
That difference may not sound like a major change, but the house edge on that bet is a wallet-grinding 16.67 percent! And a negative-expectation bet for you is a positive for the casino. (The casino makes an average of $16.67 on every $100 bet in the previous craps example.)
Positive expectation
In a positive-expectation bet, the tables are turned on the house so that the players have the advantage. Most people can’t believe casinos actually allow a positive expectation for the gambler, but surprisingly, some are out there. One example is in tournaments, where, in many situations, more money is paid out by the casino than is taken in. (Look for more on tournaments in Chapters 18.)
Getting an edge on the house edge
It’s a fact: In most casino games, the house has the edge. But you can get an edge over the casino in three ways:
Using match play coupons to double your fun. You can often find match play coupons in the free fun books distributed by many casinos. Rip these coupons out and tuck them underneath your bet. In most cases, they essentially double your wager without you having to risk any more money.
Taking advantage of promotions. Promotions can be the best way to secure a positive expectation. Here are a couple of examples: You might see a temporary rules change where blackjacks pay out 2-to-1 instead of 3-to-2 or 6-to-5. This change tips the odds enough so that even basic-strategy players have an edge of nearly 2 percent over the house.Another great promotion was when the Pioneer Casino in Laughlin, Nevada, offered Double Jackpot Time on some slot machines. Twice an hour, for a short period of time (approximately 30 seconds), they generously doubled the payout on certain jackpots. Most people shrugged off this opportunity as just another marketing gimmick, but it was very lucrative. It’s not unheard of for experienced gamblers to make six figures a year there playing only a few minutes every hour.Finding out about these great deals isn’t easy. However, one helpful resource for casino promotions and coupons is the Las Vegas Advisor (see Appendix B). Another tactic is to sign up for casino email lists to keep abreast of upcoming special events.
Arbitrage in sports betting. Because payout odds on sporting events are dynamic and may vary between bookmakers, there are rare occasions where you can place a risk-free sports bet. How is this possible? The simple version is: You place a bet on all outcomes of a certain game. Imagine the Golden Waterfall Sports Book offers 3.75-to-1 payout odds on Team A and 1-to- 4 odds on Team B. And across the street, the Silver Cascade Sports Book lists the odds as 4.25-to-1 on Team A and 1-to-5 odds on Team B. If you were to bet $25 on Team A at the Silver Cascade, and $100 on Team B at the Golden Waterfall, you’re in a no-lose situation. Your outlay on both bets totals $125. If Team A wins, one bookie pays you $131.25. If Team B wins, the other bookie pays you $125.Sports books work hard to keep their odds in line with other outfits, so these situations are quite rare. Not only that, but bookmakers frown on arbitrage betting, and if they identify you as one, they’ll either reduce your betting limits or invite you to take your business elsewhere.
Avoiding