Captain Cooks Casino - Busted before reaching requirement [Archive]

Ed Miller

06-01-2004, 12:11 PM

Where is the threshold for maximizing EV? And does betting larger really maximize EV? I would think that it would lower it?

There is no threshold. The bigger you bet, the higher your EV. (To be fair, blackjack complicates this because your EV drops when you don't have the money to double down or split.)

But say the casino let you clear using craps (I know, most don't... and the only reason I can fathom for that rule is absolutely ridiculous.) Your EV would be SIGNIFICANTLY higher by betting your entire stake on the pass line repeatedly to clear your bonus than it would be making minimum bets at blackjack. That is, you are better off successively doubling your stake at a house edge of 1.5% than you are betting the minimum at a house edge of 0.5%!

The difference in EV is significant, too. We're talking in the $20 range for the $300 Lucky Nugget bonus.

I'll give you guys a hint... when you sign up for the bonus, you have an obligation to the casino. Your obligation is cleared once one of two things happens:

1. You give 20x the deposit in action
2. You go broke

That should be enough to help you figure it out.

MrFroggyX

06-01-2004, 12:12 PM

I also did it this night!

Here is my results: (used the £1 min bet, Auto play, Vegas Stripe with the modifications)

Site:-----------------Wager Req:-----------Bonus:-------------EV:------------My Result/Profit:
Captain Cooks---------£8180--------------£309=$566---------£279=$511-------£343=$628!!!

As you can see. I ended up £34 over the bonus off £309! Was very lucky when the EV is £279.. /images/graemlins/smile.gif

But I’m still waiting for my money to hit my neteller account. So I haven't got it yet. We will see how it goes..!

Ed Miller

06-01-2004, 12:14 PM

also, it seems that a substantial win gets me on the 'watch' lists faster.

This is an important point. My way will definitely give you big wins a lot more often. If you think you will have trouble cashing out a big win, then what I said may no longer be true. Nevertheless, you guys should definitely understand the math if you are gonna do this for real money (and $2k is definitely real money).

Ed Miller

06-01-2004, 12:18 PM

I was just looking for the lowest SD as opposed to a potentially higher EV.

To each his own I guess.

Making that trade-off is fine. In fact, I might make the same trade-off if I did this. But you better at least know you are making a trade-off and exactly how much EV you are forfeiting by doing it your way.

Audi

06-01-2004, 01:18 PM

[ QUOTE ]
Actually, this is completely wrong. It depends on what your goals are, but if your goal is to MAXIMIZE YOUR EV, then you should ABSOLUTELY make larger bets.

I'll let you figure out why making large bets improves your EV. I have posted about it before, but it'll be hard to find it.

[/ QUOTE ]

AMEN to that!

Not only does busting out early reduce your overall wagering requirements but before the days of viper software (and still the vast majority of casino bonuses come minus a robot) it would take hrs to clear $3000 in requirements placing $1 bets.

Plus - the more frequently you lose, the less likely you are to be labelled an abuser.

LondonBroil

06-01-2004, 06:33 PM

[ QUOTE ]
Also, keep in mind, as much as it stinks to lose the bonus, you are really only "even" right now.

[/ QUOTE ]

True. I just came home, logged into my real money account and set autoplay to play 200 hands of 10 pounds each, then went and got the mail. I came back in 65 pounds richer. /images/graemlins/wink.gif

Freudian

06-02-2004, 04:19 AM

You aren't looking for EV here. You are looking to rock the boat as little as possible. The bonus in itself is the EV, you want to lose as little of it as possible before you can withdraw it (and if you win, great. but thats not whats important). You want to come as close as possible to the expected result of BJ. And the bigger the bets, the smaller chance of that happening.

Ed Miller

06-02-2004, 09:44 AM

You aren't looking for EV here.

Says who? I'm always looking for EV. Frankly, you couldn't be more wrong.

Freudian

06-02-2004, 11:12 AM

Well, if you want to place big bets on BJ and chase EV, feel free. Since it is a -EV game I don't see where you are supposed to make this value, no matter what the bet size is. I do know that the swings during my first run was brutal and if I had had twice the size of the bets I would not only have lost the bonus but also my deposit (simply because I was down to 40% of the original BR a while, only to end up at 105% after the full batch of hands). And that wouldn't have made me very happy, even if in some theoretical framework I maximized my EV.

I am quite happy taking as much of the bonus I can and withdraw my money. If I actually had to play myself I could see an argument for increasing the bet size, since you then could do something productive with the time you save. But since its automagic, I prefer to minimize the risk of busting out as much as possible. The higher the risk of it not only eating my bonus, but also my initial deposit - the less I like this whole thingy.

MKR

06-02-2004, 03:33 PM

Say my fortune is $1000 and if I lose itI cannot replace it and am ruined. Somebody offers me a single bet which pays off at 1,000,000:1 and which I have one chance in 10,000 of winning. I can only make this bet once and must wager my entire fortune. The EV is positive, but it seems irrational to take this bet.

MKR

TGoldman

06-02-2004, 05:50 PM

Ed Miller,

I'm sure we all agree that every single wager placed at an online casino has a negative expectation. The size of your wager neither increases nor decreases the house edge for a particular game.

It is only through the casino's bonus offer that it is possible to achieve a positive expectation. If you play in such a way that you go broke before earning your bonus, you have committed a mathematical catastrophe! The bonus is lost and you are forced to look back and realize you lost your money by placing wagers all of which had a negative expectation. Remember you are NOT playing at the casino to make money from their games. You are playing to earn a bonus, and the wagering method that maximizes your chances earning that bonus is the optimal strategy. Yes, by minimum betting you're more likely to lose part of your deposit before clearing your bonus (After all, it is a game with a negative expectation), but you've maximized your chances of earning the bonus, which is your reason for playing in the first place.

I suspect that your confusion is a result of misapplying the "Gambler's Ruin Formula." This formula is used to calculate the probability of winning a set amount of money before going broke. In a negative expectation game, you are correct that you increase your probability of reaching that amount by increasing the size of your wager. Let me repeat that this is NOT the goal of casino whoring. The existence of a bonus creates a positive expectation opportunity, and only through actually earning this bonus can you achieve +EV.

Ed Miller

06-02-2004, 10:12 PM

I'm sure we all agree that every single wager placed at an online casino has a negative expectation.

Yes.

The size of your wager neither increases nor decreases the house edge for a particular game.

Yes.

It is only through the casino's bonus offer that it is possible to achieve a positive expectation.

Yes.

If you play in such a way that you go broke before earning your bonus, you have committed a mathematical catastrophe!

NO NO NO NO NO NO NO NO!!!!!!!!! This is totally and completely wrong.

I suspect that your confusion is a result of misapplying the "Gambler's Ruin Formula."

I am not confused. I am right. You need to think about this more clearly. Quoting Piers from this post (http://forumserver.twoplustwo.com/showthreaded.php?Cat=&Number=723877&page=1&view=co llapsed&sb=5&o=14&vc=1)...

[ QUOTE ]
High variance is your friend, the potential to go bust on a promotion increases your EV, your hourly rate as well as disguises a little what you are doing. I usually aim to loose my deposit and bonuses about 60% of the time but choose whatever figure you feel happy with.

[/ QUOTE ]

He is right. You are not. Think about it.

Ed Miller

06-02-2004, 10:17 PM

The EV is positive, but it seems irrational to take this bet.

That is correct. If the $50 you use to garner your deposit bonus is your last $50, and you will be digging through dumpsters behind McDonalds for your next meal if you lose it, then you should play it safe.

Why are you people so resistant to improving your EV? I don't get it. Collectively, your arguments are logically equivalent to:

"I don't raise with pocket aces before the flop. Sure doing so increases my EV, but it also increases my variance, and I'd rather just play it safe."

All of you raise pocket aces before the flop. But when someone brings up the idea of increasing your EV by increasing your risk of ruin at a stupid bonus whoring promotion, you all run in fear! I really don't get it. We're talking about a few hundred bucks swing here, guys... and a SIGNIFICANT loss in EV... like $20 or more per bonus. What is so scary about this?

This is, after all, the Internet GAMBLING forum...

GrannyMae

06-02-2004, 10:25 PM

Think about it.

when i buy your book, am i going to have to think about anything, or will it be included at the end of the chapter?

this IS the zoo, we don't do well with puzzles. i just want to know if we will ever get the answers we seek, or if you are going to continue to make us work for the knowledge that you imply is costing us big $$?

i'm very lazy, so spill the damn beans

http://smilies.sofrayt.com/%5E/v/hairraise.gif

Ed Miller

06-02-2004, 10:57 PM

i'm very lazy, so spill the damn beans

Ok Granny, since you asked so nicely... /images/graemlins/tongue.gif

Say you are playing a even-money game with a 1% house edge. For simplicity, there is no doubling down or splitting, so you either win your bet or lose it. Your deposit is $50, and your bonus is $150, giving you a total account worth $200. You have an obligation to the casino before you can withdraw anything, however... and you can fulfill that obligation in one of two ways:

1. You bet $3000 of total action.
2. You go broke.

So say you decide to bet $0.01 a hand (they really let you lowball) for 300,000 hands to fulfill your betting obligation. What is your EV?

Well, your chance of going broke is basically nil, so your EV is just (total action) * (house edge)

EV = 3000 * (-0.01) = -$30

You lose $30 on average each time you clear the bonus, so, this bonus is worth $120 (the origial $150 bonus minus $30).

Now you choose a different strategy. You decide to bet $200. If you win, you will bet $400. Then $800. And finally $1600. At that point, your obligation is fulfilled.

Figuring out your EV is a little trickier this way. The simplest way is the following:

EV = (0.495)^4 * (+3000) + (1 - (0.495)^4) * (-200)

That is, (0.495)^4 of the time, you will win all four bets and win $3000. Otherwise, you lose your $200 stake. Your EV doing things this way is: [(0.495)^1 = 0.06]

EV = 0.06 * (3000) + 0.94 * (-200) = 180 - 188 = -$8!

Your EV doing it this way is only -$8, as opposed to -$30 in the other way! You make $142 off the bonus instead of $120... a SIGNIFICANT increase.

So where does this money come from? Your EV increases because you give LESS ACTION ON AVERAGE when you double your bet. Your obligation is fulfilled when you go broke. When you always clear the bonus, you also always give the full $3000 in action. But when you go broke sometimes, you give LESS THAN $3000 in action (on average) each time you do it. Thus, you lose less to the house edge.

In our doubling scenario, we give FAR less than $3000 in action, on average... since we go broke and finish playing 50.5% of the time after giving only $200 in action!

Increasing your risk of ruin decreases the average amount of action that you must give, thereby increasing your net EV for the whoring attempt! You don't have to double your bet to take advantage of this (though that is the optimal method). Anything you do to increase the chance that you will go broke will improve your EV... since it will lower your average action. So betting $10 per hand is better than $1 per hand. You can fine-tune it to your level of comfort... the more risk you are willing to take, the more money you will make over the long term.

Can't nobody say Ed Miller never did nothing for the peoples.

shandrakor

06-02-2004, 11:36 PM

The problem is that you are basing your example on a situation where the bankroll on the site is a 3:1 bonus:deposit ratio, and thus because most of the money is free, you don't mind losing it.

Most casinos are going to offer bonuses as a % of the deposit, rather than as a multiple. Thus, the whore in question has a much greater personal risk in the bet. Risk of ruin stops being your friend when it's your own 200, or 400 bucks, instead of your 50.

You're missing out on the greatest point of casino whoring: essentially free, low-risk, low-effort money.

If I want to take actions that increase my EV but also increase my Variance, I'm going to do ones that I can take over and over again for as long as I want, like raising AA in poker. There's a limited pool of casino bonus money, and it would be a shame to waste it.

Ed Miller

06-02-2004, 11:48 PM

shandrakor

06-02-2004, 11:57 PM

I'm not arguing with your math, just with your logic.

There are times when it's appropriate to take a lower EV bet, such as when you are only going to be offered a wager once, or a very limited number of times -or- if taking the bet today and losing would prevent you from taking a better wager tomorrow.

I'm confident that a large number of readers on this forum are not large-money professional poker players. I suspect most people reading this site are operating on limited bankrolls, and taking the doubling route you suggested above would lead to a break of their bankrolls long before they hit the 6% chance of the $3000 return.

MaxPower

06-03-2004, 12:30 AM

So basically what you are saying Ed is that when you make small bets you put more money into action than when you make large bets. So your EV has to be worse with small bets because the total amount of money you are betting will be larger.

There is no arguing with that. Its basic gambling theory.

I can certainly understand why people would want to trade off some EV for a lower risk of losing their capital.

Freudian

06-03-2004, 12:50 AM

We aren't resistant to increasing EV. But what you are suggesting is akin to advicing new poker players to play 30/60 with a bankroll of 25 BB (and when they don't will you accuse them of "running with fear"). Surely you won't advice anyone to do that in your new book? So why are you advicing people to do it in this situation? It is possible that you are just injecting some theoretical thoughts into a practical discussion, but if readers take your advice seriously they (at least many of them) will lose money. I think you need to make clear what you are doing here. Are you actually trying to give posters advice on how to act when bonuswhoring?

Minimizing the bet when bonus whoring increases the number of BB's you have and decreses the risk or ruin for this very limited run of BJ hands. You already have the profit when starting. It is all about not losing it during that relatively short run of hands.

Do you think the posts about bonus whoring on this forum would be so positive if people followed your advice and 90% bust out and 10% made more? Of course not. It is the very fact that it is low risk free money for close to zero effort that makes people attracted to the concept, and you simply fail to understand that. As for me, I will take the safe money every day instead of increasing my EV of 10$.

BradleyT

06-03-2004, 12:50 AM

Now you do realize that most of the BIG bonuses that are 200% or more are sticky bonuses right?

Consider them like a matchplay. If I deposit $100 and get $200 free and bet $300 and win my account only has $400 in it now.

BradleyT

06-03-2004, 12:56 AM

However your method of betting IS the proper way to do matchplay bonuses. You're risking $100 to win $300 on the first hand.

However you give up EV when you have a hand that can benefit from splitting such as AA or 88 when you bet your entire bankroll on one hand. How much EV are you losing? Well we'd have to figure out what % of the time you'd be dealt AA or 88 and how much EV you give up by not splitting and I don't know how to do that.

BradleyT

06-03-2004, 01:03 AM

That's straight out of Super System.

If you can never replace the $1,000 then no.
If you can replace the $1,000 then yes.

Daliman

06-03-2004, 01:06 AM

[ QUOTE ]
There is no threshold. The bigger you bet, the higher your EV. (To be fair, blackjack complicates this because your EV drops when you don't have the money to double down or split.)

[/ QUOTE ]

Ok, I'm thinking you know what you're talking about, but I cannot see how you are right.
if I make 100 $1 bets at a 5% disadvantage, my ev is $95, with a low SD
if i make 1 $100 bet at a 5% disadvantage, my ev is $95, with a MAXIMUM SD.

[ QUOTE ]
Your EV would be SIGNIFICANTLY higher by betting your entire stake on the pass line repeatedly to clear your bonus than it would be making minimum bets at blackjack. That is, you are better off successively doubling your stake at a house edge of 1.5% than you are betting the minimum at a house edge of 0.5%!

[/ QUOTE ]

This is just plain dumb.
Let's say i make a $100 deposit get $100 bonus, and have a 15x playthrough, so i need to make $3,000 in action

Playing Blackjack, at $1 a hand, 3000x, would have an average EV of around -$15, therefore a $85 profit.

Playing Craps, at ENTIRE STAKE EVERY HAND, the EV is around -$42, for a profit of $58. Not only is this WORSE EV, but, forgoing the fact that most casinos likely do not allow you to bet such high nembers when doubling your bet(not sure though, $100 a bet is highest i've seen/played) YOU ONLY HAVE A 5.9% CHANCE OF WINNING THE 4 IN A ROW STRING OF FULL STAKE BETS NECESSARY TO GET TO $3000 IN PLAYTHROUGH!
So, basically, 1 in every 17 times you make this play, you will make $3100. Every other time you lose $100.
So...

3100-1600=1500/17=$88.24
/images/graemlins/confused.gif /images/graemlins/confused.gif /images/graemlins/confused.gif

F me, wasn't planning on that....dead serious /images/graemlins/frown.gif

Now, a lesser Daliman may have packed up here, deleted his findings, and continued cleaning the house before DaliMotherinLaw gets in tomorrow, BUT NOT ME!

Obviously, the fact that part of your BR is bonus factors in here. It seems to me that you are effectively using your bonus while betting in the later, while usually only using your own $$$ in the former. This, of course, renders my initial #'s moot,(i think). /images/graemlins/frown.gif You also cannot discount the time spent playing for this. On autoplay casinos, this means little, but in manual play casinos, the time investment can be significant at minimum bet levels, and at $10 or so per hand, your % chance per run of being profitable probably drops to closer to 70% or so, maybe lower. Although, some people enjoy playing, so maybe its a benefit to play too, and the more play, the better, but i doubt most 2+2'ers are looking at it this way.
Still, I don't see this as a SIGNIFICANT difference in ev, and most of the people here are looking for stable +EV income, NOT a big hit every once in a great while with SLIGHTLY higher EV in certain situations.
Also, more than 75% of the time, under the craps vs BJ scenario, you would only get 3x through the bonus, and therefore, unless you plan on never using this casino again,(most, it seems, are looking at this as more than a one-time hit per casino.) , I'm pretty sure you'd have to work through the leftover playthrough b4 receiving any other bonuses. Plus, just because you will average 1 out of 17 times, you are just as likely to go 30 WITHOUT EVER cashing as hitting within the first 5, methinks. Why do that when you have ~95% chance of being profitable EVERY TIME

Hey, this is back to sounding better for my initial argument again! /images/graemlins/laugh.gif /images/graemlins/cool.gif
In closing, I was ready to say, "Ed Miller, you are either misguided, misquoted, or an idiot". I now think none are specifically true.
I think you are misguided in thinking EV is better when betting bigger. Obviously, the higher % the bonus, the more in favor of you this argument goes, but the bigger the bonus also, the higher the playthrough necessary, and even further lower chance of hitting.
I think you are misquouting yourself in a sense by not laying out the parameters under which this system would be more advantageous, when I think you know darn well when, how, and where.
And I don't think you're an idiot at all. Never really did, as I gave your statement benefit of the doubt as an author(not all get this, btw, i.e. John Patrick), but I still think your claims of SIGNIFICANTLY higher EV is way off except in >100% bonus cases, which is likely negated by negative playthrough that must be made up if planning on playing there again.
Now, if you're strictly going the scorched-earth route, and don't mind burning bridges and swinging like Siegfried and Roy on Fire Island, have at it. It DOES have higher EV, used properly [/list]

MKR

06-03-2004, 01:25 AM

[ QUOTE ]
betting $10 per hand is better than $1 per hand. You can fine-tune it to your level of comfort... the more risk you are willing to take, the more money you will make over the long term.

[/ QUOTE ]

Yes, over the long term increasing your risk will increase your reward. Unfortunately there is no long term whoring casino sign up bonuses.

MKR

Audi

06-03-2004, 07:05 AM

The less action you have to give, the less $ you give back to the house. There are several other 'non-mathematical' benefits to betting big also.

Ed is 100% correct.

Freudian

06-03-2004, 07:18 AM

Apart from assuming the player has an an unlimited bankroll he can use for casinowhoring and assuming there is an unlimited casinos where you can do this?

For someone whois not willing to be prepared to lose thousands of $ out of his own pocket looking for that EV jackpot, it's horrible advice.

Audi

06-03-2004, 07:30 AM

[ QUOTE ]
Apart from assuming the player has an an unlimited bankroll he can use for casinowhoring and assuming there is an unlimited casinos where you can do this?

[/ QUOTE ]

I use a less extreme strategy than the example given by Ed, however I follow the exact same concept - betting bigger increase EV. My money management means I will never go broke, my bankroll isn't unlimited but it is more than sufficient for this strategy to work.

[ QUOTE ]
For someone whois not willing to be prepared to lose thousands of $ out of his own pocket looking for that EV jackpot, it's horrible advice.

[/ QUOTE ]

lose thousands?? Who said anything about losing thousands? I thought the idea here is to win thousands. /images/graemlins/laugh.gif

Ed Miller

06-03-2004, 07:45 AM

I use a less extreme strategy than the example given by Ed, however I follow the exact same concept - betting bigger increase EV.

EXACTLY! I'm not telling you guys that you are stupid for not doubling your stake every time. All I'm saying is that THE LARGER YOUR RISK OF RUIN, THE HIGHER YOUR EV. How you decide to bet is a completely PERSONAL decision. If you chose the no risk route, I wouldn't have a problem with it... AS LONG AS YOU KNEW THAT YOU WERE GIVING UP EV. I just don't want you guys to be ignorant, that's all. I could care less how you actually gamble. I just want you to know all the facts before you do anything.

Also, there is a LOT of room in between minimum bets and doubling your stake. For instance, you could bet your entire stake on the first hand, and then (if you win) just bet the minimum. That way, half the time you go bust, and the other half you (roughly) double your stake. Doing it that way gets you more than half the benefit of the optimum strategy with not nearly the risk. Doing it that way probably nets over $10 more EV for most bonuses, and you only assume the risk of one big bet.

If you don't like that, just bet $10 per hand... or $5... or $1 if that's what you are comfortable with. JUST KNOW WHAT YOU ARE DOING. That's all I ask.

I give poker advice intended to maximize peoples' EV. Some people who read this forum can't afford to play poker, so my advice is useless to them. Likewise, some people can't afford the risk when bonus whoring. But that certainly don't mean that I'm wrong to TELL YOU GUYS WHAT'S UP.

Before I came to this thread, many of you had no idea this effect existed. Now you know. That's all I want.

Ed Miller

06-03-2004, 07:47 AM

For someone whois not willing to be prepared to lose thousands of $ out of his own pocket looking for that EV jackpot, it's horrible advice.

It's not ADVICE. I don't care what you do. I just want you to know the math before you do anything.

Ed Miller

06-03-2004, 07:58 AM

The percentage of the bonus compared to your original deposit is COMPLETELY irrelevant. Your EV is ALWAYS higher when you increase your risk of busting out. Frankly, Daliman, I don't think you fully understand the concept yet.

You did calculate the EV of craps versus blackjack correctly, though... and you got the result that you were supposed to... that despite the 3x higher house edge at craps, you are better off doing that (doubling your stake vs. betting the minimum).

I also don't really understand why you guys are so worried about losing your "bonus" money. Presumably, most of you guys play poker or other +EV games. Well, your chance of busting out if you don't play at all is ZERO. You assume a higher risk of busting out when you play, and in return you gain EV. This is EXACTLY the same. There is no need to jack up your RoR to the maximum (though that optimizes your EV). Just jack it up to whatever level you are comfortable with, and you will gain EV.

Ed Miller

06-03-2004, 08:01 AM

However you give up EV when you have a hand that can benefit from splitting such as AA or 88 when you bet your entire bankroll on one hand. How much EV are you losing? Well we'd have to figure out what % of the time you'd be dealt AA or 88 and how much EV you give up by not splitting and I don't know how to do that.

You are correct that betting your entire stake is NOT optimum at BLACKJACK where you sometimes need to double down or split.

Look, I'm not telling you to double your stake every time. I was just illustrating a concept with a simple and clear example. That's all.

Freudian

06-03-2004, 08:35 AM

Lets look at the offers we have here.

The best ones:
50$ 200$ bonus (lucky nugget)
100$ 300 bonus (captain cook)

Most others are matching offers.
100$ deposit 100$ bonus
up to
400$ deposit 400$ bonus

Down to:
1000$ deposit 400$ bonus

If you only plan on doing the first two, you won't have any chance of losing thousands of course. But if you plan on doing 10 of them, you will have to deposit over 1000$, for maximum bonus you will have to deposit much more. Should a player in this situation go for a maximum bets +20$ EV strategy (with a real risk of not making anything at any of the casinos) or as low risk as possible which leads to profit at 90% of them.

If I had unlimited funds I perhaps would go for broke hoping to hit the jackpot. But on the other hand if I had unlimited funds I wouldn't be doing this. I plan on using the winnings from casino 1 to deposit at casino 2, and the winnings from casino 2 to use at casino 3 etc as far as possible. And a gung-ho strategy won't take me very far. I will have to dip into my wallet for most new tries. Which is exactly the opposite of what I intended to do.

Freudian

06-03-2004, 08:37 AM

Perhaps you shouldn't post it as a direct reply disagreeing with someone actually giving advice. I interpreted it as counter-advice (which would be horrible for most posters here).

Ed Miller

06-03-2004, 08:41 AM

Perhaps you shouldn't post it as a direct reply disagreeing with someone actually giving advice. I interpreted it as counter-advice (which would be horrible for most posters here).

The line that got me started on this whole thing is quoted below (form josie_wales's post):

[ QUOTE ]
There is NO reason to use $2 bets.

[/ QUOTE ]

He was WRONG. There IS a reason to use $2 (or bigger) bets. That's what I disagreed with. I'm just here to set the record straight... to give 100% reliable information to clean up fuzzy thinking and errors in reasoning.

NotReady

06-03-2004, 09:17 AM

It looks like your double up strategy would have to work 1 in 25 times (25*120 = 3000) to equal the .01 strategy, and better than that to beat it. Is there a formula to calulate the odds that you will win 4 hands in a row?

You say

[ QUOTE ]
we go broke and finish playing 50.5%

[/ QUOTE ]

but does that mean you will win $3000 almost half the time?

josie_wales

06-03-2004, 09:20 AM

Ed,

Perhaps you are right that the is not NO REASON to use a $2 bet.

I was just saying that for my purposes and the way I was thinking that there was no reason to bet $2.

The reasoning that you are using is if you were able to do this bonus 100's of times.

I am more thinking that if I can only do this once, I would rather get the bonus and be happy.

I think in your one example you could get $120 with very little risk of ruin. OR get $142 with a significantly HIGHER rish of ruin.

In fact, using your numbers you will win a lot 6% of the time and lose it all 94%.

So, here are the choices:

1) A 94% chance of ruin. 6% of a big win
2) 1% chance of ruin. 99% of a keeping the bonus of $100, $200, $400...or whatever it may be.

So, if you used method #1 on ten casinos, mathematically you would not win a single cent as you can expect to bust out 94 out of 100 times.

Where as $1 bets netted me $2340, which was right around what the EV was.

However, if you won just ONE of the casinos using method 2, you would have $3000 and be at a greater amount than what I had, so I can see your point.

So, if I lead anyone in the wrong direction, I am sorry. I was just looking at these bonuses in a completley different perspective.

However, I think I understand what you are saying, Ed. It seems as if you are making more of a mathematical argument.

Thanks for taking the time to explaing your position.

One last question. You have perfectly stated the mathematics of the situation. But taking into account the exact nature of this situation, which method would you chose? Would it be #1 or #2?

OR, would it be somewhere in between?

Just curious /images/graemlins/smile.gif

Josie Wales

Ed Miller

06-03-2004, 09:33 AM

One last question. You have perfectly stated the mathematics of the situation. But taking into account the exact nature of this situation, which method would you chose? Would it be #1 or #2?

OR, would it be somewhere in between?

If I were to bonus whore RIGHT NOW, I would probably choose something in between. I'd probably set my RoR at around 40-60%. That gives me a very solid chance to be ahead after ten to twenty casinos, and it takes advantage of more than half of the total EV to be gained by busting out more often. If my bankroll were bigger, I'd hike my RoR up as high as I could... over 90%.

All gambling is a matter of balancing risk versus reward. Generally, the greater your risk, the greater your possible reward. Generally, I set my risk at the highest level acceptable to me, in order to reap the maximum reward possible.

In other words, this is all "one big session." People say, "maybe if I could do this 100s of times, I'd do it your way. But since I can only do it once, I want the safe money." But that's just the point... every wager you make, be it at poker, blackjack, sports, anything... it's all "one big session." Say you got a bonus from a poker site, but you lost it all because you ran bad. Would that be "a stupid waste of bonus money?" Of course not! You don't automatically step down to $0.01-$0.02 every time you play off a poker bonus, do you? You just play at your normal level, and you treat the bonus money as just normal cash, correct? WHY SHOULD THIS BE ANY DIFFERENT AT ALL? The bonus money is YOUR money... if you lose it gambling, oh well. That's gambling. You ran bad.

A lot of the arguments against my position have been fuzzy thinking in the worst way. "It would be a total waste of my bonus if I lost it." "You are better off just playing it safe to MAKE SURE you get the bonus." "Maybe if I could do it 100s of times, I'd do it your way..."

Advantage gambling is about maximizing EV within the bounds of your bankroll. Any artificial constraints about "bonus" money versus "my" money is just fuzzy thinking, and it will hurt you guys in the long run... not just here, but in all gambling you do.

Audi

06-03-2004, 09:57 AM

[ QUOTE ]
The best ones:
50$ 200$ bonus (lucky nugget)
100$ 300 bonus (captain cook)

[/ QUOTE ]

Those are not the best ones.

[ QUOTE ]
if you plan on doing 10 of them,

[/ QUOTE ]

I have done WAY more than 10 of them; WAY WAY more.

[ QUOTE ]
you will have to deposit over 1000$, for maximum bonus you will have to deposit much more.

[/ QUOTE ]

Yes, you need an appropriate bankroll for the strategy in question to work.

[ QUOTE ]
If I had unlimited funds I perhaps would go for broke hoping to hit the jackpot. But on the other hand if I had unlimited funds I wouldn't be doing this. I plan on using the winnings from casino 1 to deposit at casino 2, and the winnings from casino 2 to use at casino 3

[/ QUOTE ]

Your bankroll doesn't need to approach unlimited. A few $1000 will do. Your plan will make you money, just not as much as it could do....in fact I started out minimizing variance by betting small, but realised a couple of years ago that betting big made me more money.

Daliman

06-03-2004, 10:46 AM

[ QUOTE ]
The percentage of the bonus compared to your original deposit is COMPLETELY irrelevant. Your EV is ALWAYS higher when you increase your risk of busting out. Frankly, Daliman, I don't think you fully understand the concept yet.

[/ QUOTE ]
Without having the time to go through an analysis on this one, I'm gonna have to disagree with you in the way this is stated.

Yes, WITH bonus, you can gain EV by betting bigger, however, if you're also saying that EV can be gained WITHOUT bonus too, i'm pretty sure you're wrong. In a regular casino, emplying this strategy is akin to saying, if the players are all of the same skill, you are better off playing 30-60 with $600 than 3-6. Compared again with blackjack, we get back to the old equation;

action x edge=EV

Make ZERO difference how that action is placed, only thing that changes is standard deviation with no bonus.

But you're right though. I had no idea about the +EV of plunging with bonuses. Doubt I'll ever use it in that fashion, but it's good to know.

Thanks for that, ED /images/graemlins/laugh.gif

Audi

06-03-2004, 10:56 AM

[ QUOTE ]
action x edge=EV

[/ QUOTE ]

Not quite right. Action x edge = the amount you lose to the house. (Or do you mean player edge?)

Less action = less you lose. It's that simple.

Of course this only applies to +EV situations. Goes without saying.

MKR

06-03-2004, 12:21 PM

[ QUOTE ]

Quote:
--------------------------------------------------------------------------------

The best ones:
50$ 200$ bonus (lucky nugget)
100$ 300 bonus (captain cook)

--------------------------------------------------------------------------------

Those are not the best ones.

Quote:
--------------------------------------------------------------------------------

if you plan on doing 10 of them,

--------------------------------------------------------------------------------

[/ QUOTE ]

Be a pal Audi; tell us what the best places are.

MKR

MKR

06-03-2004, 12:37 PM

[ QUOTE ]
It looks like your double up strategy would have to work 1 in 25 times (25*120 = 3000) to equal the .01 strategy, and better than that to beat it. Is there a formula to calulate the odds that you will win 4 hands in a row?

[/ QUOTE ]

Say your probability of winning is .4, your probability of losing is .5 and your probability of tieing is .1. Your probability of winning four times in a row is (.4)^4 or .0256 and your probability of not losing four times in a row is (.5)^4 or .06.

Is this what you were asking about?

MKR

johnnycakes

06-03-2004, 02:32 PM

Argh. I deposited 100 credits. Had it set on $1 bets with Adde's settings.
Busted out after about 4000 hands.
I deposited another 30 credits and busted out again after 649 hands.

This is frustrating.

Johnny.

shandrakor

06-03-2004, 02:52 PM

Thanks for soaking the bad luck for the rest of us, though /images/graemlins/smile.gif

BradleyT

06-03-2004, 03:04 PM

But the difference between losing your deposit and bonus at poker and blackjack is that you know you'll be able to get the money lost at poker back sometime in the future.

Most of us could care dick about blackjack so money lost is money that can't be gained back later on simply by playing more blackjack.

MaxPower

06-03-2004, 03:22 PM

[ QUOTE ]
But the difference between losing your deposit and bonus at poker and blackjack is that you know you'll be able to get the money lost at poker back sometime in the future.

Most of us could care dick about blackjack so money lost is money that can't be gained back later on simply by playing more blackjack.

[/ QUOTE ]

I don't see how this matters. As long as there are positive EV bets out there, if you make enough of them you will win. It doesn't matter what you are betting on.

GrannyMae

06-03-2004, 03:27 PM

fuzzy thinking

speaking of fuzzy thinking...

i was more clear when you were making us guess. WTF is with all this math and crap?

note to self:
don't ask ed miller to spill the damn beans again. just buy his book, get it signed, and like the rest of my collection, never read it.

http://techhelpers.net/e4u/drink/trink35.gif

fnurt

06-03-2004, 03:32 PM

The fallacy that runs throughout this thread is the assumption that because making larger bets results in better EV, you should do it, period. What this ignores is that no one is quantifying HOW MUCH additional EV you get from this strategy, which in turn, says nothing about how the EV of the overall activity (BJ) compares to other +EV activities you might choose to invest your money in (poker, bingo, etc).

If you play for $1 a hand, you don't need to consider this issue because your profit is basically a freeroll, bonus money you make on the side of your normal activities. If you take a more risky approach, then you have to decide whether this is really the activity that it makes sense to gamble your money on.

I do appreciate the time Ed and others have taken to explain the mathematical concepts and I think it is very thought-provoking. But you can only take the reasoning so far.

BradleyT

06-03-2004, 03:38 PM

There is a finite number of BJ bonus offers. Say there's 20 of them where I get over $100 in bonus money. If I do the "higher" EV method but bust out at all 20 I'm completely stuck until another casino comes out with a new offer.

If I do the same thing at poker and lose I simply re-deposit because I know it's +EV when I play. Blackjack isn't +EV so I have to wait for another bonus offer (if and when it comes along).

mmanne

06-03-2004, 03:45 PM

I believe Ed's argument has never ventured into anything more than saying that the higher the bet, the greater the EV. My understanding of that theory hinges on the fact that there is a cap as to how much you can lose, but not how much you can win. Therefore, since there is a lower bound, but no upper bound, the EV goes up.

This has nothing to do with the argument of how much you get in bonus money versus your money (doesn't matter anyway), whether or not this is your last $50(in which case EV is not what you are concerned with, it's SD), or whether YOU should go with the highest EV. Even Ed said that he personally wouldn't bet his full bonus+deposit on the hand. He was explaining a mathmatical concept, that I didn't fully understand, but I think I have a better handle on now (Thanks Ed)

matt

AAmaz0n

06-03-2004, 04:37 PM

Thanks for injecting some insight into the discussion of EV. Like many here, I kept thinking that if the house edge was 1%, the EV was the same at 2500 $1 bets or 10 $250 bets. Now I think I see what is happening; because you stop playing when you lose the bonus money the left side of the probability bell curve is being truncated since you are not really losing any of your own money, while the "tails" of the distribution on the right still give a large payout. You go broke far more often, but occasionally get a large payoff.

I'd like to try this with my next bonus attempt, but I think that I want to protect at least my initial deposit with a variation of the Kelly Criterion. Maybe wager 5% of my deposit + bonus with a stop loss at 50% of that money and lowering the wager 50% and starting again. Also doubling the wager if the session bankroll doubles. This would lower the EV, but also reduce the risk of ruin while I'm building my casino courtesan bankroll. I don't want to take money from my poker bankroll to persue this, but rather parlay the bonuses without any additional outlay (My initial $100 shot at 2 casinos is now $380 with a rather minimal investiment in time).

It's been a while since I've done calculations of risk of ruin, and those all assumed a players edge rather than a house edge at BJ (I never have liked playing -EV games, it galls me to no end that they shuffle every hand). Can you recommend a formula for relating the -0.36% house edge at 4 deck strip BJ to RoR according to bet size?

thanks,

Shauna

OrangeHeat

06-03-2004, 04:39 PM

[ QUOTE ]
There is a finite number of BJ bonus offers. Say there's 20 of them where I get over $100 in bonus money. If I do the "higher" EV method but bust out at all 20 I'm completely stuck until another casino comes out with a new offer.

[/ QUOTE ]

Your missing the point - whether it is poker/blackjack/bingo/tiddly winks/etc... the higher the EV bets you take the more money you will have in 30 years.

For example say poker is +EV for you and I come along and have you play a game which you can play 2 different ways, but you can only play it once.

One way is +EV with Higher ROR and the other is 0 EV with little ROR. Obviously the way to maximize your TOTAL EV is take the highest EV method.

Your thinking of everything in isolation - the more +EV bets you take in your lifetime - the earlier you will be able to retire....

Orange

lostinthought

06-03-2004, 05:29 PM

[ QUOTE ]

Your thinking of everything in isolation - the more +EV bets you take in your lifetime - the earlier you will be able to retire....

Orange

[/ QUOTE ]

Obviously.. but you can't make EV bets if you have busted your bankroll.. not having a bankroll is -ev for time/ev bets missed..

and then the circles of this whole thread continue..

wake up guys..

DanS

06-03-2004, 07:05 PM

I'm (sincerely) glad that NPA Ed Miller has cleaned up my, along with others', fuzzy thinking on the topic. What I've gathered from this thread is that EV and risk tolerance are crucial when determining bet size (in regards to casino whoring), and there's a proportional correlation between the two. Thanks NPA Ed Miller! /images/graemlins/tongue.gif

The one thing that I don't think has been addressed properly is that: though you raise EV by making the largest bet *you* feel comfortable with, you may also indirectly lower EV.

What do I mean? Well, depending on how well the Belle Rock group (or the other one, forget what it's called) synchronize their 'bonus abuser' labeling attempts, you may be kept out of future bonus offers FROM THE WHOLE DAMN GROUP if you are known to "abuse" bonuses. For example, let's say I raise the EV of the Lucky Nug offer ($50 gets you $200) from, say, $182 to $195 by betting larger than $1. I'm phucked if my $13 higher EV means that the Lucky Nugget doesn't offer me their 20% to $50 reload offers, or other offers.

You can shear a sheep a thousand times, but only kick it in the nuts once... or something like that. /images/graemlins/smirk.gif

Dan

MaxPower

06-03-2004, 07:20 PM

I think it is exactly the opposite of what you are saying.

If you just bet the minimum and take no risk of ruin, they are more likely to label you as an abuser. If you occasionaly lose your buy-in they will think you are a good customer.

Most people who work in casinos have no clue about gambling theory. I would suspect it is the same in online casinos. They probably use some pretty simplistic techniques to find abusers

MS Sunshine

06-03-2004, 07:23 PM

Instead of opening another thread about the same online casino, I wish to piggyback this. At Captain Cook's you have a real $$ account and a bonus account. How do you clear a $200 200% bonus there splitting your play between the two acccounts. I asked support and their reply:

If you deposit 20 dollars and claim 60 dollars in your bonus account, and play slots, you will be required to wager:

$200 in your real account (20 x 10)
$600 in your bonus account (60 x 10)

Any wagering done in blackjack or poker will contribute at half the rate of what you wager (So every $2 wagered in blackjack contributes $1 to your wagering requirement)

So, for BJ I need $8000 in play for the $400 bonus account and $4000 in play in the real money account. Extra in the bonus account doesn't help with the real account requirement?

Is this correct?

MS Sunshine

DanS

06-03-2004, 07:38 PM

[ QUOTE ]
I think it is exactly the opposite of what you are saying.

If you just bet the minimum and take no risk of ruin, they are more likely to label you as an abuser. If you occasionaly lose your buy-in they will think you are a good customer.

Most people who work in casinos have no clue about gambling theory. I would suspect it is the same in online casinos. They probably use some pretty simplistic techniques to find abusers

[/ QUOTE ]

Ahh, hadn't thought of it like that. Great point. Personally, I'm at the stage in my (gambling) life where the relative certainty of the $22-2300 doing it the Josie Wales way is preferable to the obtainable $27-2800 ev of doing the bonuses he chased the 'Ed Miller' way. Actually, my risk tolerance is a bit higher, so after some calculations, I might go $2-5 depending on the numbers.

Any thoughts on how I can 'cover' myself other than mixing in some other crappy games, or playing a # of hands which is above the minimum wagering requirements?

Dan

LondonBroil

06-03-2004, 09:32 PM

[ QUOTE ]
So, for BJ I need $8000 in play for the $400 bonus account and $4000 in play in the real money account. Extra in the bonus account doesn't help with the real account requirement?

Is this correct?

[/ QUOTE ]

You are correct. If you play though $9000 in your bonus account, then transfer it over to your real $$ account, you'll still have to play through $4000 before withdrawing any.

Of course, even if I'm wrong, why play more than you have to?

Ed Miller

06-04-2004, 12:19 AM

Most people who work in casinos have no clue about gambling theory. I would suspect it is the same in online casinos. They probably use some pretty simplistic techniques to find abusers

This is further evidenced by the games they allow and those they prohibit. For instance, most prohibit roulette but permit blackjack. Think about why they might prohibit roulette (and craps and baccarrat), but permit blackjack. You should be able to figure out their likely reason for prohibiting these specific games... and it is an absolutely ABSURD reason. They would be FAR better off allowing roulette, for instance... as some people actually would do the thing that they don't want you to do. /images/graemlins/tongue.gif

Flawed

06-04-2004, 03:16 AM

[ QUOTE ]
Say you are playing a even-money game with a 1% house edge. For simplicity, there is no doubling down or splitting, so you either win your bet or lose it.

[/ QUOTE ]

When I casino whored I used the same logic except I always wagered 1/4 of my total. I felt my EV would be greater betting 50% or 100% but wasnt sure. Assume you can double and double on splits does betting 100% still have the greater EV?

As for betting the max not being good advice I dont understand.
Pros
-your done in a few minutes
-you dont have to deal with most of your cash outs
-you decrease your risk of being labeled a bonus abuser
-you increase your EV

If youre relying on this money to whore the next casino than I understand or its like a 20% bonus with no losing clearing requirements, but if you have the cash there really is no reason not to bet atleast 1/4

[ QUOTE ]
This is further evidenced by the games they allow and those they prohibit. For instance, most prohibit roulette but permit blackjack. Think about why they might prohibit roulette

[/ QUOTE ]

I believe they dont want you making a very risky no risk bet

Freudian

06-04-2004, 03:31 AM

[ QUOTE ]
Your thinking of everything in isolation - the more +EV bets you take in your lifetime - the earlier you will be able to retire....

Orange

[/ QUOTE ]

And the more bets you take with a high risk of ruin the less likely are you to be able to make +EV bets at all in the future.:D

M.B.E.

06-04-2004, 04:54 AM

[ QUOTE ]
There is a finite number of BJ bonus offers. Say there's 20 of them where I get over $100 in bonus money. If I do the "higher" EV method but bust out at all 20 I'm completely stuck until another casino comes out with a new offer.

If I do the same thing at poker and lose I simply re-deposit because I know it's +EV when I play.

[/ QUOTE ]
Well, blackjack bonus whoring is +EV too. If you run bad and bust on all 20 attempts, just go back to playing poker. As long as you are playing with positive EV, and at an acceptable level of risk for your overall bankroll, don't be concerned that you might show a loss at blackjack bonus whoring because you had only 20 opportunities.

Here's an analogy. Suppose you have a local 15/30 holdem game that you are able to beat for $20 an hour. Then you go on a Caribbean cruise with a poker room, and you notice they have a 10/20 game with some terrible players. You could beat this game for $30 an hour easily, probably more. But you'll only have a few hours this week to play in that game -- and of course even with positive EV you might show a loss over a few hours.

Surely you would not say, "well -- I only have a finite opportunity to play in this game and I might end it with a loss; therefore even though it's greatly +EV I won't play this game at all".

Nemesis

06-04-2004, 09:18 AM

It seems like the key is... do you have the bank roll to support a higher EV method, or are you relying on that money to go on to the next casino.

Ed Miller

06-04-2004, 10:13 AM

I believe they dont want you making a very risky no risk bet

I have two theories:

1. They don't want you betting red/black, pass/no pass, or banker/player ON THE SAME SPIN/ROLL/HAND. They are "worried" people will play off their bonus this way. Of course, playing off the bonus this way is about the BEST WAY POSSIBLE FOR THE HOUSE.

2. They don't want people making high odds bets like hard ways and single numbers on roulette. They are afraid that a bonus abuser will catch a "big score." Of course, the high odds bets also tend to have a MUCH larger house edge, so again it is absurd that they wouldn't want this.

MaxPower

06-04-2004, 10:25 AM

[ QUOTE ]
Most people who work in casinos have no clue about gambling theory. I would suspect it is the same in online casinos. They probably use some pretty simplistic techniques to find abusers

This is further evidenced by the games they allow and those they prohibit. For instance, most prohibit roulette but permit blackjack. Think about why they might prohibit roulette (and craps and baccarrat), but permit blackjack. You should be able to figure out their likely reason for prohibiting these specific games... and it is an absolutely ABSURD reason. They would be FAR better off allowing roulette, for instance... as some people actually would do the thing that they don't want you to do. /images/graemlins/tongue.gif

[/ QUOTE ]

EV of betting $1 on red = -.05
EV of betting $1 on red and $1 on black = -.108

I'd rather play blackjack any day.

Freudian

06-04-2004, 12:47 PM

Some casinos don't allow BJ, or only allows it you to clear part of the bonus with BJ. I am sure they will figure out that with autoplay and BJ, they are basically giving away their money.

It is not like they don't know what is going on. I suspect the ratio of exploiters vs gamblers who like BJ is at a tolerable level for some of the casinos. When they feel something needs changing, they will change it.

For example, this is from one casinos T&C: "Danish and Israeli players are most welcome at Spin Palace Casino. However, due to the ongoing severe abuse of this promotion by players resident in Denmark and Israel, Danish and Israeli players may no longer claim this 100% sign-on bonus. Danish and Israeli players wishing to claim a sign-on bonus can click here for an alternative bonus."

I had been curious about why most casinos had different rules for Danes. Now I know. /images/graemlins/smile.gif

Barry_G

06-04-2004, 02:33 PM

I think this is the most important statement in this whole thread.

[ QUOTE ]
Advantage gambling is about maximizing EV within the bounds of your bankroll.

[/ QUOTE ]

Make the largest bet you can in relation to the size of your bankroll and the amount of SD you are comfortable with.

cjs

06-04-2004, 10:15 PM

I'm alittle slow so after reading many posts about the easy money in casino whoring I didn't try it. Well I finally could not ignore it and decided to try it. Decided to do the lucky nugget 200 for 50 bonus.

after reading many posts I deposited in pounds and got 200 pound match. The 50 was just small part of my bankroll and decided to take some of Ed's advice and played 500 auto hands at 10 pounds a hand - not really caring if I busted.

My suprise when it finished - my account finished with 519 pounds for a nice ~ 900 dollar win ( I think, haven't figured out the conversion ). I've got to read this forum more carefully from now on.

Al

MKR

06-04-2004, 10:43 PM

[ QUOTE ]
I believe they dont want you making a very risky no risk bet

I have two theories:

1. They don't want you betting red/black, pass/no pass, or banker/player ON THE SAME SPIN/ROLL/HAND. They are "worried" people will play off their bonus this way. Of course, playing off the bonus this way is about the BEST WAY POSSIBLE FOR THE HOUSE.

2. They don't want people making high odds bets like hard ways and single numbers on roulette. They are afraid that a bonus abuser will catch a "big score." Of course, the high odds bets also tend to have a MUCH larger house edge, so again it is absurd that they wouldn't want this.

[/ QUOTE ]

Some of these games would offer the player a chance to earn money without taking any risk at all. In roulette you could bet every number each time. You are giving up 5% of your action. You could bet the player and the bank simulataneously in baccarat and could do no worse than give up 5%. As long as the bonus is more than 5% of the action you have to give, the player would have a sure thing. I think that is why they bar some of those games.

Following a strategy that gives you a sure win is not best for the house.

MKR

MKR

06-04-2004, 11:02 PM

Most people who work in casinos have no clue about gambling theory. I would suspect it is the same in online casinos. They probably use some pretty simplistic techniques to find abusers

It doesn't matter what the employees think or know: Casinos are not known to be charitiable institutions; they do not give money away. The bonuses are a lure. If you can take the bonus and walk away, good for you; many can't. If keep taking the bonuses and walking the pitch has not worked and you are an "abuser."

As to who gets the money, between the house and the punter, I'd back the house every time.

MKR

Ed Miller

06-05-2004, 04:23 AM

Following a strategy that gives you a sure win is not best for the house.

Yes it is! At least when you are doing it at a house edge of 5% or more! You are thinking like the casino execs, and they are thinking very wrongly.

Put it this way - Which option should a casino prefer you take? With either option, you plan to stop and withdraw whatever you have after you give $5000 in action.

1. Bet $1 on red and $1 on black SIMULTANEOUSLY at roulette.
2. Bet $10 per hand on blackjack

M.B.E.

06-05-2004, 05:53 AM

[ QUOTE ]
With either option, you plan to stop and withdraw whatever you have after you give $5000 in action.

[/ QUOTE ]
Actually I think MKR makes a good point -- the terms and conditions of the bonus are designed to maximize the chance that the player won't stop playing after giving $5000 in action.

Remember that generally speaking the gaming industry (like the tobacco industry and the potato-chip industry) derives its profits from our inability to stop at just one. The hook of gambling is that you run good and you run bad. People don't like to stop when they're running good, because they expect to continue running good. People don't like to stop when they're running bad, because they've run good in the past; they know their luck can change at any moment, and don't want to miss out on the upswing.

From the casino's perspective, the deposit bonus is a promotion. The casino knows it will lose money overall as players clear the bonus. The casino also knows it will lose more money (on average) to players who clear the bonus playing blackjack (at basic strategy or something close to it) than to those who clear the bonus playing roulette betting black and red simultaneously (if that were allowed).

However, the casino figures that some of the players who set out to clear the bonus playing blackjack -- even if they intend to stop playing after they've cleared the bonus -- will end up giving a lot more action. Not all players will do this of course, but some will: while they were clearing the bonus they experienced the thrill of hot streaks and cold streaks, and want more of it. On the other hand, someone who cleared the bonus making the "cannot win" bets on red and black simultaneously has little chance of becoming hooked. The casino will lose money to this player (because of the bonus) and has hardly any chance of gaining a longterm customer.

Thus in my view the online casinos probably are behaving rationally in prohibiting those type of bets to clear their bonus, even though it appears at first blush that the casino's EV would be greater by allowing those bets.

Ed Miller

06-05-2004, 06:37 AM

I think the effect you describe exists, but I can't believe that it is significant enough to overcome the downsides of pushing people towards blackjack.

I'm not going to argue that point much, but I did want to mention something else I've been thinking about. Why do these casinos offer Autoplay? I mean, it's a strange feature... tell the software to play X hands for you using basic strategy.

Well, obviously they offer the feature because it makes them money. They must have noticed that their bottom line is better post-Autoplay than it was pre-Autoplay. But why?

It doesn't seem like a feature well-suited to recreational gamblers. Why on earth would someone who is gambling for entertainment choose Autoplay? Furthermore, it cuts the house edge from, say, 2.5% to 0.5%, so even if it did attract a recreational gambler, he'd have to give 5x more action just to break even.

It seems to me that Autoplay targets two groups:

1. Total action-hungry freakshows
2. Bonus whores

The existence of Autoplay probably makes money for the house off BOTH groups. There are no doubt some people who are so hungry for action that they'd happily set up their computer to play for them, and they just watch, so they can get as much action as possible. Even though Autoplay will play much a better game than they would, they get SO many more hands in that it easily surpasses the 5x action mark.

The other group is bonus whores. Before Autoplay, a bonus whore could never play 5000 hands at $1 per hand, as that is FAR too tedious. So they would probably just step it up to $5 or $10 per hand and accept the increased variance. But now, the same people are setting up Autoplay, and therefore cutting their EV.

I bet the effect that bonus whores have on these casinos is quite significant... and therefore the 10-20% loss of EV from Autoplaying for $1 per hand make a significant positive impact on their bottom line.

If that's the case, it seems to me that permitting craps, roulette, and baccarrat would almost have to improve their bottom line as well. Yes, some people would bet "both ways" and stop that would be unable to stop if they were forced to gamble. But many more whores would always stop at $5000, and as we have seen in this thread, many are COMPLETELY risk averse. If given the chance, they would happily trade 50% or more of their EV to ASSURE that they will make some profit. That has to help the casinos out in the long run.

I still think these games are prohibited for psychological reasons. Betting both ways says in absolutely unmistakable terms, "I am exploiting you." They also really don't want someone depositing $100, getting their $100, and withdrawing $10,000 after getting very lucky at roulette. They just feel like they are "being had."

I could be totally off-base, and perhaps prohibiting these games does improve their bottom line... but I can't rationalize it if it does.

M.B.E.

06-05-2004, 07:02 AM

Ed Miller

06-05-2004, 07:27 AM

About the autoplay, I assumed that the player had to program the bot, and the casino is hoping that many players will program their bot with a strategy worse than basic strategy. But I really don't know -- I've never played blackjack online; I'm just speculating about this stuff.

Autoplay comes pre-programmed with basic strategy. Two or three of the decisions might be slightly wrong based on the specific rules of the game (most online casinos offer all sorts of different BJ games with lots of different rulesets... and IIRC, there are some reasonably liberal options available), but if you just play the pre-programmed strategy, you are certainly giving up no more than 0.1% or so.

I know that if I were running the online casino, I'd be looking for a way either to exclude those risk-averse bonus whores from the outset, or to seduce a large fraction of them into becoming gambling addicts.

No doubt. But actually, players playing off the bonus at 2.5% or more really aren't making basically anything off the house. For instance, many casinos force you to play your bonus off at least 20x to 40x (i.e., for a $150 bonus, you might be required to give $3000 to $6000 in action before you can withdraw). At a 2.5% house edge and a 40x playing off requirement, the bonus is completely gone. You are completely correct that a major source of income for these places must be compulsive gamblers... and thus they should clearly try to cultivate the compulsiveness. Obviously, even if a bonus whore is actually making almost zero off the casino because he plays a game with too high a house edge, the house will still make a lot more off him if it can turn him into a gambler.

Frankly, I find this topic to be interesting, simply because there are SO many of these online casinos, and they seem to offer "too good to be true" bonus promotions... that actually are true.

Freudian

06-05-2004, 08:14 AM

[ QUOTE ]

Frankly, I find this topic to be interesting, simply because there are SO many of these online casinos, and they seem to offer "too good to be true" bonus promotions... that actually are true.

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I think the bonuses can be explained right there. Since there are so many casinos online, and most consumers aren't biased towards any of them - bonuses are the best way to attract potential cash cows. If your competitors offer 100%, you don't want to offer 25%. Rather you want to offer 110%. If they try to hard to turn bonus abusers away by making the terms harsh, they will also turn profitable customers away. Even some of the casino-fishes will withdraw a big initial profit, only to go back to depositing.

GrannyMae

06-05-2004, 02:25 PM

i have a 3 part bonus coming from nugget.

i am going to play part 1 with no adjustment to autoplay. part 2 i will make the "adde adjustment", and part 3 i will ask ed miller how much to wager. the ed miller, part 3 is a $350 gets $350 match for $700 total. the WR is only 10X ($7,000)

so ed, with $700 total, how much do i bet?

http://smilies.sofrayt.com/%5E/_950/creator.gif

MKR

06-05-2004, 03:23 PM

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Following a strategy that gives you a sure win is not best for the house.

Yes it is! At least when you are doing it at a house edge of 5% or more! You are thinking like the casino execs, and they are thinking very wrongly.

Put it this way - Which option should a casino prefer you take? With either option, you plan to stop and withdraw whatever you have after you give $5000 in action.

1. Bet $1 on red and $1 on black SIMULTANEOUSLY at roulette.
2. Bet $10 per hand on blackjack

[/ QUOTE ]

The casino's expectation is always better on roulette than on blackjack.

But what happens if the casino matches a player's $300 and the player must bet $5000 before he leaves? The casino has put itself in a position where it is guaranteed to lose $50 to any player follows this strategy: bet every single on each spin of the wheel. True the player loses 5% of his bet each on each spin of the wheel, but he faces no risk at all. The strategy is easy--any one can follow it. The world would flock to the casino's doors and each person would claim his $50. That's why the sure loss is worse for the house.

MKR

kem

06-07-2004, 12:45 PM

[ QUOTE ]
2. They don't want people making high odds bets like hard ways and single numbers on roulette. They are afraid that a bonus abuser will catch a "big score." Of course, the high odds bets also tend to have a MUCH larger house edge, so again it is absurd that they wouldn't want this.

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This might not be so absurd. Allowing roulette would increase the house edge, but also their variance. They might have business reasons for not wanting higher variance. They have serious repercussions if they go broke, so obviously they want to avoid that. Allowing roulette would increase their EV, but there's some chance that players use their $200 bonus dollars to hit 35:1 odds twice in a row, and all of a sudden the casino is out $250+k. Easier to play riskier with "free" money, and enough variance like that will put the casino out of business.

I have to think that casinos have hired people better at math than the avg poster here /images/graemlins/smile.gif I'm sure they've gone through all the numbers, and have huge databases full of data to look at gamblers' tendencies, preferred games, etc. I'd give them the benefit of the doubt that there is some reason why they limit the games.. Theoretical games aside, there are certainly real-life situations where maximizing EV is not the only goal.

Ed Miller

06-07-2004, 12:55 PM

They have serious repercussions if they go broke, so obviously they want to avoid that. Allowing roulette would increase their EV, but there's some chance that players use their $200 bonus dollars to hit 35:1 odds twice in a row, and all of a sudden the casino is out $250+k. Easier to play riskier with "free" money, and enough variance like that will put the casino out of business.

Yes, their repercussions are:

1. Refuse to pay the win that breaks them
2. Declare bankruptcy
3. Reopen under a different name

kem

06-07-2004, 01:12 PM

[ QUOTE ]
Yes, their repercussions are:

1. Refuse to pay the win that breaks them
2. Declare bankruptcy
3. Reopen under a different name

[/ QUOTE ]

Exactly.. and those are negatives which they'd like to avoid. Looks like Mr Boyd is having a hard time on step #3 after his first online failure.. Easier to just limit variance and not worry (much) about going broke.

FlyWf

06-07-2004, 04:22 PM

I dunno, the casinos don't discourage playing of the extremely high variance slots and video poker. And it appears they pay out when people win progressive jackpots.
I'm pretty sure Ed's right about the thinking behind the casino owners.

One question: How does this apply to those monthly match bonuses such as Intercasino? If you go broke, your wager requirement carries over into the next month.

Baulucky

06-07-2004, 06:20 PM

Ed: You make very good points AND you are correct too that EV increases with ROR. But if you have no BR you can't bet.

This problem is very old:

J. L. Kelly's seminal paper, A New Interpretation of Information Rate, 1965

http://www.racing.saratoga.ny.us/kelly.pdf

This is basic gambling theory. Anyone not very familiar with this is missing out BIG.

Betting at the "kelly" has the best return-on-risk taken, AND incredible fluctuations. It is also the safest, fastest way to get rich. Blackjack counters know all about kelly, because their advantage is very small.

When casino whoring, with the terms described in this thread, a casino marketing department entices new players giving them say a $250 bonus that to clear requires, say $5000 of wagers. Basically, they give the client the opportunity to be in an approx. (-0.005+ 250/5000)= 4.5% positive edge game.(est. 0.5% house edge +/- at most forms of BJ).

If one is risk averse and wants to max. the probability of walking out with a profit, one bets the minimum bet allowed at the house lowest edge game till the WRs are met ( A whore does this ). If one wants to optimize his return over the $5000 WR's (You can theoretically make a lot, but never lose it all), one bets the kelly fraction, i.e.: 4.5% of BR, and adjust his bets as he wins/loses, like compounding.( A courtesan does this ).

If one wants to maximize return on time dedicated, one can add all the bonuses of all the casinos that one gets a bonus at, and then make one's bets 4.5% of the TOTAL. This can clear a casino in minutes, or get you broke AT THAT CASINO, but not at the others.

You correctly point out that when one goes broke, one has met the WR's of the casino and hence increased his EV.

Any bets bigger than the kelly point for one's BR, increase variance and diminish EV, and therefore are STUPID.

If one has $1M, with a 4.5% edge game that can play forever, the correct optimal answer is to bet 4.5% of current BR or less, not to get the biggest EV and bet it all on a 52.25% favorite over a 47.75% dog, for example.

Making $1 minimum bets is the lowest ROR proposition, but a waste of time of course. Anything above 4.5% of BR is overbetting, but still +EV with higher flucs, anything above 9% of BR bets (in this particular case) INSURES bankruptcy in the not-so-long run.

This is basically the same stuff that rules 300BBs for a LHE player that is willing to move up/down in limits as he wins and loses, 50 buyins for SNGs or NLHE players, etc, etc.

Depending on one's utility curve, risk aversion and needs one can choose to be a hybrid between a whore and a courtesan , but some people choose to be fools (to the point of playing -EV games, which Kelly won't help them at).

I hope this helps many.

DogRockets

06-07-2004, 07:00 PM

J. L. Kelly's seminal paper, A New Interpretation of Information Rate, 1965
http://www.racing.saratoga.ny.us/kelly.pdf

For the mathematically impaired such as myself, this link explains Kelly in laymans terms.

http://www.dmtc.com/tools/wt_kelly.html

But how does this apply to BJ? How do you come to the 4.5% wager as being optimal using Kelly. Kelly was designed to maximize BR at the track when applied to over or underlays in the odds.

Baulucky

06-07-2004, 07:06 PM

As simple as possible, but no simpler than that. This Kelly stuff is all about math, so for the mathematically impaired may be impossible to comprehend, but you may want to read the risk management section on this website (no spam):

http://www.seykota.com/tribe/risk/index.htm

We can only aspire to become as good as this guy Seykota. He has made Billions playing +EV games in the trading markets.

MMMMMM

06-07-2004, 07:06 PM

[ QUOTE ]
Anything above 4.5% of BR is overbetting, but still +EV with higher flucs, anything above 9% of BR bets (in this particular case) INSURES bankruptcy in the not-so-long run.

[/ QUOTE ]

I believe this is not true (no matter what Stanford Wong might say). I found this out the "hard way";-) several years ago when I argued essentially the same thing, citing Wong and a physicist's paper on the subject. David Sklansky promptly proved me--and Wong and the physicist--wrong, on this forum, much to my discomfiture and I ended up owing him a retraction and an apology.

If you have an edge and bet double your optimal Kelly bet on each roll, this does NOT insure that you will go broke. If you add up ALL the outcomes in a matrix of all possible results you will see that your positive EV is still accounted for, and that some possible successions stay alive no matter how many times you bet. As I recall, Wong also said something to the effect that your edge diminshes as you increasingly overbet until when you are doubling your optimal Kelly you have no advantage and if you go over consistently that you will definitely go broke (this only from memory, could be off somewhat). However just think about this and see why it should not be so: you have the same positive EV on every roll, so you do not lose EV by betting more. And there is no guarantee you will go broke either; as before, chart a matrix and see why, as you extrapolate there are always paths which do not lead to going broke and which have very high winnings.

Baulucky

06-07-2004, 07:17 PM

Of course nothing beats luck. Those paths that you talk about are "lucky" paths. This stuff is a lot more complicated than Kelly, (which was a solution to a simple edge problem), because the games are non-linear and some very weird chaotic paths occur. Kelly is a simplistic approximation. Blackjack is a non-linear game with a variety of payoffs.

I have to say, that the more complicated stuff on this subject is way above my head.(There is even high level academic arguments that as a true-random generator cannot be created, that the outcomes of RNGs are in fact chaotic and not random, and hence some degree of predictability can be exploited using non-linear variations of the kelly concept on a non-normal distribution of outcomes).

PS: Please check the link I gave above, down to the item:
"Non-Balanced Distributions and High Payoffs", and "Almost Certain Death Strategies".

The implications for gambling are enormous.

DogRockets

06-07-2004, 07:31 PM

Excellent link on the risk management. So by reading this, the optimal bet for any 50/50 wager is to bet 25% of your BR each bet, applied over the long run. This percentage would vary depending on the house edge in a game, correct? As in BJ, it would be 49.64/50.36 or there abouts, but it would be a minimal adjustment. Off to set a "play" account up and give it a try. Does anybody know of a BJ simulator that you could program to wager a set % of BR? Would be nice to try this theory out in practice, say over a million hands.

Baulucky

06-07-2004, 07:34 PM

Careful man!. This only applies IF you have the edge. In online casinos, they ALWAYS have the edge, unless you are working off a bonus!!. Please read carefully in the future!.

In the coin-toss example alluded in the link the game is: heads you win 2, tails you lose 1. So you have 50-50 probability of a 2-1 payoff, hence giving you a MASSIVE edge. That's why it's optimal to risk 25% of BR.

Tater10

06-07-2004, 08:29 PM

I've tried proving to myself how increasing betsize increases your +EV. Is this a good example?

I own 85 casinos - casino1.com casino2.com.... casino85.com

i have a deposit $50, get $100 free ($150 total to start with) at each casino.

Game of choice: a deck of 100 cards, 49 say "win" 51 say "lose." There is a house edge of 2% in this game.

To clear the bonus, you have to bet $1050.

Player A decides to bet the mimimum ($0.000000001) until it is cleared. There is essentially 0 chance of him busting, in fact, there is essentially 0 chance he will be off by more than $.01 from the EV of ($1050 * -.02) = -$21. After he hits my 85 casinos, his account should be exactly $129 at each, for a total of (85 X $129) = $10,965.

Player B decides to double up every time. He bets 150, then 300, then 600. You would expect him to be successful (.49 * .49 *.49) = .117649, which is 1 in 8.5 attempts. You would expect him to be succssfull in 10 of my 85 casinos. He has $1200 x 10 casinos, or $12,000. His average account balace is $141.176.

Player B will make $12.176 more per casino on average, or $1035 more. My guess is that when player B busts, he is not going to pay -EV on $300 or $600 bets. 51% of the time, he is only going to lose (.02 * $150) or $3 (24.99% he loses $3 + $300 x .02 = $6, or $9, etc etc.)

Sorry for being a couple days behind on this thread.