allowing your opponent to martingale you
 

I found myself in a situation the other day where I was playing against an opponent who was not horrible but whom I outclassed pretty significantly. We played a series of heads-up freeze outs. We played for $40 and I won, rematch for $40 and I won, another $40 and I won, $100 and I won, another $100 and I won, so at this point I am up $320 and have won 5 in a row. He now wants me to offer him 200 to 180 odds (so if he loses, he'll owe me an even $500 but if he wins, he'll only owe me $120). I decided that I thought I was easily enough of a favorite to offer these odds and did so. I lost and we quit (he had an appointment to get to or I'm sure we would've played more).

Thinking about it later I realized that I essentially was letting him try a martingale-ish/double-or-nothing-ish stragety against me. Of course it wasn't quite a martingale as the bets didn't actually double each time, but it was similar. If he didn't have to leave and I had won the last freeze-out, he could have then offered to play for $300 or $400, which, while not strictly a martingale, would get his debt back into very small numbers if he won -- if he lost this, he could've offered to play for $550 or $700 or whatever, etc.

So my one thought is that the general thinking seems to be that if the game is good you should keep playing. In this case, I know the game is good and I have a rather significant advantage over my opponent and I am a big favorite to win any individual match... but if I keep letting him increase the stakes I'm bound to lose one sooner or later which lets him get even (or close to it). The situation would be even tougher if he was doing an exact martingale ($40 on the first game, $85 on the second game, $175 on the third game, etc or something like that).

Obviously I have the opportunity to refuse to play each subsequent game, so I could've for example stopped after I was ahead $320. This seems to be my only advantage in this scenario.

So I guess my questions are:
1. How many times should you (as the favorite) accept rematches against an inferior player using a martingalish strategy against you... Obviously this is dependent on exaclty how big a favorite you think you are... I'd say I was probably at least a 60/40 favorite and maybe as high as a 75/25 favorite against this particular player... feel free to use other numbers though if it makes the example easier/clearer.

2. Is there a better way to handle this type of situation? Like accept N rematches while allowing the stakes to double then only agreeing to rematches for the same amount (say $100) from there on out?

3. Obviously the big drawback to the martingale strategy in general is that if you hit a particularly bad stretch your losses can grow really high really fast. Assuming that you are playing on a cash basis, extending no credit, what size backroll does your inferior opponent have to have before you are willing to risk allowing him a martingale every time in hopes of busting him completely?

In our specific situation, my opponent is significantly wealthier than I am and could probably afford to keep doubling to somewhere in the $20k-$30k range before it would get too painful for him to keep playing... if we had started at $40 and done strictly double or nothing this would be a 40-80-120-240-480-960-1920-3840-7680-15360 progression, or in other words I would have to win 10 times in a row before I shut him out (which would've booked me a nice $30,720 win).

4. What other things should I be considering in this situation? What type of arrangement can I propose that gives me the best odds of extracting the most money from him?

Thanks in advance for any input,
-
John

Re: allowing your opponent to martingale you
 

Only a quick thougth. The problem with playing against the martingale system is that you need to have a big bankroll, so when to stop probably depends on how much you can afford (or feel comfortable) to lose. Obviously you should play as much as possible against this guy since it is +EV, so its more or less a bankroll question.

Re: allowing your opponent to martingale you
 

I'd play as long as I thought I was a favorite, or until the stakes reached a big enough level that I'd feel like a Jackass for giving it back if I lost.

Against a Martindale, you'll wind up even or down slightly most of the time, but occasionally you hit the Bonanza and clean up big time.

Re: allowing your opponent to martingale you
 

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The problem with playing against the martingale system is that you need to have a big bankroll, so when to stop probably depends on how much you can afford (or feel comfortable) to lose.

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No, you don't need to have a big bankroll to play against a martingale. There is a common misconception that you can break the bank with a martingale, but casinos face no risk of a large loss against someone playing a martingale.

I have played against someone using a near-martingale in backgammon, and the stakes escalated to over 40 times the original amount. My opponent was only trying to win most of his money back. I lost the last match, but finished ahead by a lot.

When someone raises the stakes repeatedly, you should be concerned about whether you will get paid.

Re: allowing your opponent to martingale you
 

Why do casinos have a maximum bet limit on EVERY game they offer?

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casinos face no risk of a large loss against someone playing a martingale.


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100% wrong.

Re: allowing your opponent to martingale you
 

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Why do casinos have a maximum bet limit on EVERY game they offer?

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casinos face no risk of a large loss against someone playing a martingale.


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100% wrong.

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No you're 100% wrong. Don't you worry, the casino is not afraid of you wishing to gamble vast sums of money on a -ev bet, and the casino is especially happy when you do it because you are chasing vast sums of money you already lost.

Re: allowing your opponent to martingale you
 

Pzhon is 100% right.

When you have an advantage, it is better to be on the receiving end of a martingale, given that EV is the same whether you are martingaling or the other player is. Your biggest long-term losses will be smaller when the other player is martingaling.

Re: allowing your opponent to martingale you
 

</font><blockquote><font class="small">Svar till:</font><hr />
</font><blockquote><font class="small">Svar till:</font><hr />
The problem with playing against the martingale system is that you need to have a big bankroll, so when to stop probably depends on how much you can afford (or feel comfortable) to lose.

[/ QUOTE ]
No, you don't need to have a big bankroll to play against a martingale. There is a common misconception that you can break the bank with a martingale, but casinos face no risk of a large loss against someone playing a martingale.

I have played against someone using a near-martingale in backgammon, and the stakes escalated to over 40 times the original amount. My opponent was only trying to win most of his money back. I lost the last match, but finished ahead by a lot.

When someone raises the stakes repeatedly, you should be concerned about whether you will get paid.

[/ QUOTE ]

Yes, you are rigth. You risk very little while the player using the martinggale risk a lot.
But how could you finish on plus if the Martingale system player won the last game?
Regards

Re: allowing your opponent to martingale you
 

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[ QUOTE ]
Why do casinos have a maximum bet limit on EVERY game they offer?

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casinos face no risk of a large loss against someone playing a martingale.


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100% wrong.

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No you're 100% wrong.

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Actually, the guy who said 100% wrong the first time was right. There are some ultra rich people who like to gamble and gamble big. They have been known to put the scare into casinos because of the sheer size of their bets and the facts of probability and standard deviation.

There is one Australian gambler in particular who within the last few years actually broke the bank of any overseas casino and shut them down until they could get a fresh infusion of cash.

There are several super-whales around the world that love to gamble for huge money. The casinos love their action because they will end up ahead in the long run. But the short term fluctuations can be significant enough to give any casino manager heartburn. We're talking about people who gamble well into 6 figures on every bet. So simple probablility makes swings of +/- many millions of dollars per hour very likely.

Re: allowing your opponent to martingale you
 

You missed the point -- we were specifically talking about martingaling.

Re: allowing your opponent to martingale you
 

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But how could you finish on plus if the Martingale system player won the last game?

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My opponent wasn't quite doubling up, and in the last match he was only trying to win 2/3 of his money back.

Playing against a martingale or near-martingale is like entering a tournament. Some people focus on the likely loss, but my return on investment is high when I play in large tournaments. Of course, my risk of getting stiffed is lower in real tournaments, but this opponent was also weaker than most of my tournament opponents.

Re: allowing your opponent to martingale you
 

[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
Why do casinos have a maximum bet limit on EVERY game they offer?

[ QUOTE ]
casinos face no risk of a large loss against someone playing a martingale.


[/ QUOTE ]

100% wrong.

[/ QUOTE ]

No you're 100% wrong.

[/ QUOTE ]

Actually, the guy who said 100% wrong the first time was right. There are some ultra rich people who like to gamble and gamble big. They have been known to put the scare into casinos because of the sheer size of their bets and the facts of probability and standard deviation.

There is one Australian gambler in particular who within the last few years actually broke the bank of any overseas casino and shut them down until they could get a fresh infusion of cash.

There are several super-whales around the world that love to gamble for huge money. The casinos love their action because they will end up ahead in the long run. But the short term fluctuations can be significant enough to give any casino manager heartburn. We're talking about people who gamble well into 6 figures on every bet. So simple probablility makes swings of +/- many millions of dollars per hour very likely.

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You don't understand. Even if the martingaling guy bets a gajillion dollars, we already have a gajillion-1 of his money. Our risk is minimal.

Re: allowing your opponent to martingale you
 

This whole doubling strategy is BS. I hear it from more people who don't understand a thing about chances and gambling like to do it with blackjack so that they "can't lose"

Just look at each game independendly. If you wanna commit the stakes he asks and you think your chance of winning makes it +EV, play it.

Re: allowing your opponent to martingale you
 

I didn't hear an answer.

&gt;&gt;&gt;&gt;Why do casinos have a maximum bet limit on EVERY game they offer?&lt;&lt;&lt;&lt;&lt;

Re: allowing your opponent to martingale you
 

Why do casinos have a maximum bet limit on EVERY game they offer?

Re: allowing your opponent to martingale you
 

Actually, looking at each game "independendly" is the problem. If you are going to allow someone to martingale on you, and he has enough bankroll to play against you for "X" games, then you are not betting on the +/- EV of winning a game, the bet is now what is the probability of winning "X" games consectively with the +/- EV on each game.

In other words, the odds of flipping heads or tails is 50/50. Allowing someone to martingale 4 times on a coin flip now means, I have to flip heads 4 times in a row to make money. A much different situation.

Re: allowing your opponent to martingale you
 

From Phzon:

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, but casinos face no risk of a large loss against someone playing a martingale.

[/ QUOTE ]

From you, supposedly in 100% agreement:

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Your biggest long-term losses will be smaller when the other player is martingaling.

[/ QUOTE ]

Can you spot any problems?

Re: allowing your opponent to martingale you
 

</font><blockquote><font class="small">Svar till:</font><hr />
From Phzon:

</font><blockquote><font class="small">Svar till:</font><hr />
, but casinos face no risk of a large loss against someone playing a martingale.

[/ QUOTE ]

From you, supposedly in 100% agreement:

</font><blockquote><font class="small">Svar till:</font><hr />
Your biggest long-term losses will be smaller when the other player is martingaling.

[/ QUOTE ]

Can you spot any problems?

[/ QUOTE ]

No, can you? English is not my native, but i think theyre essentially saying the same thing.

Re: allowing your opponent to martingale you
 

</font><blockquote><font class="small">Svar till:</font><hr />
Actually, looking at each game "independendly" is the problem. If you are going to allow someone to martingale on you, and he has enough bankroll to play against you for "X" games, then you are not betting on the +/- EV of winning a game, the bet is now what is the probability of winning "X" games consectively with the +/- EV on each game.

In other words, the odds of flipping heads or tails is 50/50. Allowing someone to martingale 4 times on a coin flip now means, I have to flip heads 4 times in a row to make money. A much different situation.

[/ QUOTE ]

You are rigth in that sense. It takes more time to make money against someone using Martingale. Overall though the risk is very small, since every loss will be minimal.

Re: allowing your opponent to martingale you
 

It has an effect on that particular day's variance.

It has no effect weird effect on your EV. If you are equal players, your EV is 0, no matter if you double the stakes after every game or not.

As someone said it becomes more like a tournament, yes that is correct. You have a smaller chance of winning, but if you win, the profit will be proportionally larger.

So in the long run, it matters [censored]. If he thinks it gives him an advantage and that makes him happy, go along and double those stakes.

Re: allowing your opponent to martingale you
 

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Why do casinos have a maximum bet limit on EVERY game they offer?

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Because casinos have finite bankrolls, and have to take into account *their own* risk of ruin (and utility of money).

Re: allowing your opponent to martingale you
 

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I didn't hear an answer.

&gt;&gt;&gt;&gt;Why do casinos have a maximum bet limit on EVERY game they offer?&lt;&lt;&lt;&lt;&lt;

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For starters, not every casino has fixed limits, but your point is taken.

"Most" casinos have fixed limits to prevent martingaling. Martingale theory is based upon the likelihood of infinite betting limit. When the betting limit is finite and the net expectation on every bet is negative, then the Martingale system falls apart like a trailer park in a tornado.

Epstein has whole sections of his book on this and related systems in "The Theory of Gambling and Statistical Logic."

Re: allowing your opponent to martingale you
 

The most common way to get burned on a deal like this is when you don't play for cash on each turn. "ok, so I owe you $500 - double or nothin?" Get the cash on the table before each turn and collect it each time you win.

You should already know what max bets you can handle and still maintain your bankroll management for element of ruin. As you win money from the Martingaler your bankroll is increasing so your personal max bet limit will also increase. But only up to a point. When that point is reached you can no longer offer double up bets. You can continue to increase the max bet gradually as you win but doubling up puts you over your personal limit. It doesn't matter whether the Over-Max bet is against the Martingaler you've been beating or against a new player who's just as bad and just walked in the door. If it's over your limit it's over your limit.

PairTheBoard