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Best of Frank Scoblete
Bet the Ranch, Buy the Farm7 July 2005
Astute advantage players at games such as poker and blackjack often ridicule the whole concept of money management because they cite, correctly, that no amount of money management can turn a negative expectation game into a positive expectation game. Negative expectation games will kill you, in a monetary sense, in the long run and there is nothing you can do about it, ever, so don't even try. So say some experts.
For example, say you (a basic strategy non-advantage player at blackjack) like to get up and take an hour off after you lose half your buy-in. You might reason that you are avoiding the bad shoe if you do so or that when you return the game can't possibly be as cold as when you left. When you come back in an hour, the cards have no idea that you have been gone and you have no idea of whether the new shoe is going to be better, worse, or the same as the old shoe. Your leaving the table has had no effect on your chances to win or lose or on the house edge. Therefore, your playing choice, a money-management decision not to throw more money out until you've waited a period of time, is an irrelevant choice to be kind and a stupid choice to be unkind. So say some experts.
You can't manage your money to win at the tables or at the machines. That's a fact. So say some experts.
Looked at from the logical perspective of someone who plays with an edge over the house and has a large bankroll, yes, perhaps all the money-management ideas of the plebes (you and me) are silly: leaving a shoe after four losing hands in a row or jumping tables; qualifying shooters at craps; looking for repeating numbers or colors in roulette before wagering, or trying to discern patterns and trends before taking the plunge might all seem like illogical, superstitious claptrap. So say some experts.
But they aren't, even though they are! So says this expert.
So opinion is divided on the importance of money management. All the other experts say it is nonsense; I say it isn't.
In truth, money management, looked at from a coldly logical perspective, is a great preserver of bankrolls and it is irrelevant whether the cards or dice or roulette balls know this fact or not. In fact, I wouldn't share this information with the cards, dice or roulette balls because, as every gambler knows, they are not reliable. I wouldn't even share this information with other experts because you can rely on them to disagree.
Despite pooh poohs to the contrary from the cognoscenti, proper money-management techniques can extend your time but not your risk at the tables and machines; allow you to grow a gambling bankroll that will let you enjoy your casino pastime without worrying about a loss on any given night or series of nights, and make your casino experience richly rewarding, if not in dollars, at least in sense.
The goal of proper money-management is not to change the house edge, a thing it can't do, but to preserve your playing capital so that it is not diminished faster than it can be increased. Now, that might sound like gobbledygook but it isn't. Watch.
START A 401G
The first step in good money management is to start a 401G - the "G" stands for gambling - an account that is used strictly for playing in the casinos. If you've been keeping your gambling bankroll under the bed or in a jar, dig it out and open a money market checking account at the local bank. Get some interest on your gambling stake when you aren't gambling. Don't have gambling money? Then what are you doing reading this magazine? Come back when you've gotten a part-time job whose pay goes into the 401G. Too lazy to work a second job? Then take a small percentage of your weekly income and put it away until you have enough to gamble with.
Before you enter the casino and play, you should have 400 times your average bet in the bank for table games and 10 thousand times your average bet for slot machines. A $25 table game player at blackjack should have $10,000 sitting snugly in the 401G before a bet is ever placed. If you are a quarter slot player, playing full coin (3), then you need $7,500 to enter a casino.
Next, get a line of credit at the one to three casinos you like to play in. This line is to be taken against the money in your 401G. It's an interest free loan while the money to pay it earns the interest.
Once you have your 401G, how much should you bring to the casino for a session? One tenth of your total bankroll is the maximum to begin with. Once you have your initial 401G set up, you can now become a professional money manager at casino games by utilizing the Scobe Betting Scheme. (I always name things after myself.)
Here's the formula, in English: you want to bet an amount the house edge of which loses you less than what you earn in interest in your 401G plus what you regularly put into your 401G. So, if you are playing blackjack against a one-half percent house edge, then you stand to lose approximately one average bet every two hours or so. If you are a $25 blackjack player that means in four hours of play you will lose (in the long run) about $50 every four hours. You go to the casino once a week. You stand to lose approximately $200 per month in the casino.
Between interest and what you deposit, you should put into your gambling account more than $200 per month. Just to be on the safe side, you should add an extra $50 to $100 per month. So make that $250 to $300 a month. That will give you a cushion. Your bank account will go up and down due to fluctuations, which just means good or bad luck; but in the long run, use my plan and your gambling account will increase over time. Not through luck but through design. If you win, you put your win and the extra $250 to $300 a month in the account - but you continue to bet at the same level even as your account goes up. If your account doubles, you can double your bet level but then you must also double the amount you put in each month, too.
The more money in your account, the less upset you'll be on those evenings when you get your head handed to you on a platter. After all, the money you have put aside is to be used only for gambling, not for Lulu's braces or Tiny Tim's operation.
And please do incorporate all those silly things into your gambling repertoire that some will tell you are nonsense. If you are ahead one night and you have a few hours to go and you want to go home a winner - stop playing and go home a winner. Or take half your win and play with that, but don't touch the other half. Sit out if you lose three or four hands in a row. Look for trends in roulette and baccarat and don't bet a penny until you see such a trend.
Why do all that nonsense? Because when you're not playing in a negative expectation game, you are not losing. Looking for trends, sitting out hands after a series of losses and then waiting to jump back in, actually reduces your exposure to the house edge but simultaneously keeps you on edge as you wait to get back into the game. That's the deliciousness of anticipation! In a real sense, you have conned your emotions into thinking that you are, indeed, in the action even when you aren't!
For slot players, I'll devote a whole future column to money management that will set your reels spinning but for now - slow down the pace. Don't put too much into the belly of the beast.
Proper money management as I've outlined is the only way for non-advantage players to live a casino lifetime. Too many players come to the games with too little money backing their play. They bet way too much, often hit a bad streak, and find themselves wiped out. Remember, my money management principles prevent you from betting the ranch only to buy the farm!
This article is provided by the Frank Scoblete Network. Melissa A. Kaplan is the network's managing editor. If you would like to use this article on your website, please contact Casino City Press, the exclusive web syndication outlet for the Frank Scoblete Network. To contact Frank, please e-mail him at firstname.lastname@example.org.
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