Use of Win Goals and Stop Losses

[Rob.Singer]

To pretend to prove that it has something to do with a winning system.

People get banned for handing out business cards, for heaven's sake. Even winning over a period of time isn't proof of anything. We can hardly go by any casino's assessment of any incident, let alone a ban. Perhaps, they thought you were making the other players uncomfortable with your own "shenanigans"?

People who claim things over and over but don't then over and over provide the actual proof of their claim by independent professional analysts have less than zero case. But, you can't do so because that would "let the cat out of the bag"? Well, no one's forced you to go on with your essentially baseless but nonsensical approach to gambling. This is gambling and everything which goes with it after all. "No exit".

More incomplete reading in the vein of the dice problem.

I published the letter BECAUSE IT EXPLAINED WHERE, WHEN, AND WHY. They were unable to make a profit off of me during my many visits over the past 12 months, but I had been winning there longer than that. I wasn't passing out silly business cards, and it had nothing to do with one incident. All your theory does is help you deal with it.

[Dan Druff]

The question, Dan, is have you ever encountered a 10%, or even a 5%, coin-in rebate? I never have, but I lead a sheltered life.

The Atlantic City blackjack scenario I mentioned featured a loss rebate, but the player was able to define a trip as a single day or several days, and was able to torture them without needing to count cards. He would either win and quit for the trip, or play to reach his loss rebate threshold and then quit and call it a trip, and rotate this among several casinos. Good work, if you can get it.

You're referring to Don Johnson (not the actor), who won $15 million in AC through basic strategy blackjack play.

However, this guy was just lucky. He wasn't playing a positive expectation game. Casinos kept promoting this story because it helped entice whales to their properties.

Here were Johnson's terms that he negotiated, according to a video he was in:

1-50k of free chips when he walked in the casino

2-20% discount on his losses (did not give details on when he would get the discount)

3-Change of rules:
-Bigger bets allowed, 25k on 3 hands, 75k total
-dealer stands of soft 17
-double up allowed on any two cards
-split allowed up to 4 times

4-He agreed on some non-standards (seems to me, I'm no expert) hand signal for some actions, hit, stand, surrender. If the dealer missed the signal and made a mistake, it would result in a free win for him.

(If you want to see the full 46 minute video, it's here: http://www.bloomberg.com/news/videos...b-5fcc5eca65e4 )

I'll analyze these 1-by-1.

1) $50,000 freeplay sounds amazing, but if you're betting tens of thousands per hand, it means very little. It would only be meaningful if he ran the $50,000 freeplay, played very little more, and left. He played for a long time each session, so the $50k was relatively meaningless. That's why the casino agreed ot it.

2) 20% discount on losses doesn't mean much if you are paid after a long period of time. This is often wrongly assumed to mean he's getting himself a 20% edge or 20% bonus on all bets, but that's far from the truth. 20% of losses means 20% of OVERALL losses, not 20% back on each hand he loses. If you're playing a game like blackjack without counting cards, it is almost a mathematical certainty that you will lose after a certain number of hands. So if they give him 20% losses back only after a certain large number of hours played, it is meaningless, if those hours are likely to produce losses far greater than 20%. Believe it or not, if I could get someone to play a million hands of blackjack in my casino, and be guaranteed they weren't cheating or card counting, I would give them back 99% losses and still win!

3) The "change of rules" are not what they appear to be. These are very standard rules for high stakes games. Go into Bellagio and look at their high-limit shoe games, and you will see those exact rules already in place.

4) They agreed to the change in hand signals just to pacify a whale. So he thought he was clever because the casino had to pay him if they misunderstood him and made a mistake. However, this clearly happened very infrequently, again resulting in not much edge overall for Johnson. If a dealer had a chronic problem with misunderstanding the new signals, they would put a dealer in place who could do it better. It's not rocket science. Even if he gained a few hundred K in this overall (and that would be best-case), it wouldn't offset expected losses in the millions.

By his own admission, his "winnings" came from some monster win sessions that were clearly the result of an amazingly good run of cards. His explanations as to "edges" he got himself would only give him a small amount of additional winnings over time in the best case, rather than cause staggering wins in a short period of time.

Bottom line is that this guy is just a typical basic strategy whale who got lucky for a few big sessions, but no doubt is an overall loser in blackjack. He won't even disclose how big his losing sessions were, nor will he present proof that he's up overall.

The casinos are promoting this whale as a success story, and he is enjoying it because it makes him look like a genius.

[Dan Druff]

Oh, and 20% loss rebates in blackjack, no matter how much freedom you're given to define the meaning of a "session", are still not +EV unless the session is ridiculously short. So, yes, if he could define a session as 15 hands, get a 20% rebate on overall losses, and then hop to other casinos and keep getting that same deal over and over, then it's +EV.

But that's not what he did here.

[RS__]

You're referring to Don Johnson (not the actor), who won $15 million in AC through basic strategy blackjack play.

However, this guy was just lucky. He wasn't playing a positive expectation game. Casinos kept promoting this story because it helped entice whales to their properties.

Here were Johnson's terms that he negotiated, according to a video he was in:



(If you want to see the full 46 minute video, it's here: http://www.bloomberg.com/news/videos...b-5fcc5eca65e4 )

I'll analyze these 1-by-1.

1) $50,000 freeplay sounds amazing, but if you're betting tens of thousands per hand, it means very little. It would only be meaningful if he ran the $50,000 freeplay, played very little more, and left. He played for a long time each session, so the $50k was relatively meaningless. That's why the casino agreed ot it.

2) 20% discount on losses doesn't mean much if you are paid after a long period of time. This is often wrongly assumed to mean he's getting himself a 20% edge or 20% bonus on all bets, but that's far from the truth. 20% of losses means 20% of OVERALL losses, not 20% back on each hand he loses. If you're playing a game like blackjack without counting cards, it is almost a mathematical certainty that you will lose after a certain number of hands. So if they give him 20% losses back only after a certain large number of hours played, it is meaningless, if those hours are likely to produce losses far greater than 20%. Believe it or not, if I could get someone to play a million hands of blackjack in my casino, and be guaranteed they weren't cheating or card counting, I would give them back 99% losses and still win!

3) The "change of rules" are not what they appear to be. These are very standard rules for high stakes games. Go into Bellagio and look at their high-limit shoe games, and you will see those exact rules already in place.

4) They agreed to the change in hand signals just to pacify a whale. So he thought he was clever because the casino had to pay him if they misunderstood him and made a mistake. However, this clearly happened very infrequently, again resulting in not much edge overall for Johnson. If a dealer had a chronic problem with misunderstanding the new signals, they would put a dealer in place who could do it better. It's not rocket science. Even if he gained a few hundred K in this overall (and that would be best-case), it wouldn't offset expected losses in the millions.

By his own admission, his "winnings" came from some monster win sessions that were clearly the result of an amazingly good run of cards. His explanations as to "edges" he got himself would only give him a small amount of additional winnings over time in the best case, rather than cause staggering wins in a short period of time.

Bottom line is that this guy is just a typical basic strategy whale who got lucky for a few big sessions, but no doubt is an overall loser in blackjack. He won't even disclose how big his losing sessions were, nor will he present proof that he's up overall.

The casinos are promoting this whale as a success story, and he is enjoying it because it makes him look like a genius.

I stopped around the "$50k = meaningless" part. For the sake of argument, let's just say it's a 0.5% HE game (even though it's really like 0.2% or something).

To be a break-even play, he could wager through $10M in action to off-set the $50K in free play (well, slightly less than $10M, since the free play isn't valued at 100%). I don't know how he played, but let's say he played 2 hands at $10K each on average (average bet = 2x$10K). That means he'd have to play 500 rounds to get $10M in action in order to just BREAK EVEN on the $50K in free play.

Add in the weird shit he was doing (with hand signals or dealer mistakes), the HUGE rebate (20%). I believe the rebate kicked in once he had lost $500K, but unsure.


With these rules, there's NO WAY he was playing a -EV game, unless he would play 20 hours a day, with some awful strategy, not making the best use of his rebate, etc.


Edit: Just read the whole thing, Dan. Wow....

[Alan Mendelson]

I didn't bring up the 5-10% "rebate" to discuss it. I brought it up to show a reason why I keep playing after a big win or why I keep playing if I'm stuck some huge amount. If you want validation or proof, sorry. Not today.

I understand now. This was a fictional scenario. Okay, I can accept that it was fictional but next time mention that.

[Alan Mendelson]

Oh, and 20% loss rebates in blackjack, no matter how much freedom you're given to define the meaning of a "session", are still not +EV unless the session is ridiculously short. So, yes, if he could define a session as 15 hands, get a 20% rebate on overall losses, and then hop to other casinos and keep getting that same deal over and over, then it's +EV.

But that's not what he did here.

I can't understand how any 20% loss rebate can create a positive game. Wouldn't you need a 100% loss rebate to be positive?

[RS__]

I understand now. This was a fictional scenario. Okay, I can accept that it was fictional but next time mention that.

It's not a fictional scenario, but sure let's go with that.



And no, you don't need a 100% LR to be positive.

[Alan Mendelson]

It's not a fictional scenario, but sure let's go with that.

And no, you don't need a 100% LR to be positive.

I don't know which of these statements to believe. At this point I believe neither. If there is or was such a 10% bonus for coin-in please private message me so that I can confirm it with the casino, or tell us yourself so that we can all independently call the casino. If you private message me I will keep the information about the casino confidential after I confirm it.

Any kind of a loss rebate that is less than 100% of the loss still adds up to be a loss in my book. But you know math better than I do, so do you care to explain?

[RS__]

Like I said before (or meant to say, maybe I forgot to say it) -- I'm not going to tell you (privately or publicly) where this is. Hint: "Think oUtside The bOx"


Give me a 10% loss rebate in roulette.

$100 on 0: 37/38 of the time I lose $100, but get $10 back. 1/38 of the time I win $3500

(37/38) * -90 + (1/38) * 3500

Gives me an EV of $4.473.

That's a win in my book, not sure about yours.

[Alan Mendelson]

What are we talking about: a 10% bonus on coin in or a 10% loss rebate? Unfortunately, outside the box often times means theoretical and I am not in the imagination business. Nor do I use imaginary money when in a casino.

Regarding your betting system at roulette: sorry, I don't play roulette. But if you are asking me to wait around at a table to win 1/38 bets I can't think of anything less appealing.

[RS__]

2 different things. You guys kept bringing up some loss rebate shit. You said short of 100% LR isn't positive. I gave an example where a 10% rebate is +EV.

The other is something else, not related -- basically some large % of your action back in FP. Not imagination.

Point is -- if you're playing a +EV game, it's stupid to have a stop loss or win goal (and quit). You might quit for other reasons, but not because you won or lost $X in a trip.

[redietz]

As I said initially, there's no reason to apply win goals and stop losses to a positive expectation video poker game. Fatigue and adhering to a schedule would be the most common reasons for me to stop playing positive expectation video poker.

If you want to apply win goals and stop losses to a negative expectation game, that's fine. They can't hurt unless they somehow increase the number of hands played. Most likely they would reduce hands played, and therefore be helpful.

But, as mentioned earlier, win goals and stop losses could certainly be useful in a game where personal skill comes into play, such betting on golf or playing poker. If you are losing, something may be wrong with you, or you may be up against competition that has you overmatched.

This will become more and more of an issue as Nevada has just made skill-based gaming legal. That means video game type machines that reward higher levels of skill are coming to a casino near you someday soon. That will be a whole different ball game from video poker, and win goals and stop losses should be very helpful.

[Alan Mendelson]

Two things:

1. Stop your vulgarity. YOU were the first person in 9 years to use vulgarity on this website. Stop it.

2. I don't consider your roulette betting scheme to be a positive play. You still have to win that 1/38 bets and how long do you plan on being at the table and how big is that stack of $100 bills?

2 different things. You guys kept bringing up some loss rebate shit. You said short of 100% LR isn't positive. I gave an example where a 10% rebate is +EV.

The other is something else, not related -- basically some large % of your action back in FP. Not imagination.

Point is -- if you're playing a +EV game, it's stupid to have a stop loss or win goal (and quit). You might quit for other reasons, but not because you won or lost $X in a trip.

[Rob.Singer]

Opinions (even vulgar ones) tend to be nothing more than that when they come from those who theorize rather than actually play the game. +EV or -EV has little meaning in any given session. People who don't set goals before hitting a substantial winner either have a gambling problem or a theory problem. Either way, I'd like to thank them all for filling up the machines for me over the past 15 years.

[regnis]

Like I said before (or meant to say, maybe I forgot to say it) -- I'm not going to tell you (privately or publicly) where this is. Hint: "Think oUtside The bOx"


Give me a 10% loss rebate in roulette.

$100 on 0: 37/38 of the time I lose $100, but get $10 back. 1/38 of the time I win $3500

(37/38) * -90 + (1/38) * 3500

Gives me an EV of $4.473.

That's a win in my book, not sure about yours.

My understanding of Don Johnson's deal, and I believe Dan said this also, is that it was not a loss rebate on every losing hand, but rather on the net loss after a session (whatever the definition of session may have been). So your example does not accurately reflect what was offered. Yes, what you describe is a great deal, it just does not exist.

So if you lost 3700 and then won 3500 and the session ended, the rebate is 20. Not quite the EV you want ---I'll let you do the math.

[Dan Druff]

I stopped around the "$50k = meaningless" part. For the sake of argument, let's just say it's a 0.5% HE game (even though it's really like 0.2% or something).

To be a break-even play, he could wager through $10M in action to off-set the $50K in free play (well, slightly less than $10M, since the free play isn't valued at 100%). I don't know how he played, but let's say he played 2 hands at $10K each on average (average bet = 2x$10K). That means he'd have to play 500 rounds to get $10M in action in order to just BREAK EVEN on the $50K in free play.

Add in the weird shit he was doing (with hand signals or dealer mistakes), the HUGE rebate (20%). I believe the rebate kicked in once he had lost $500K, but unsure.


With these rules, there's NO WAY he was playing a -EV game, unless he would play 20 hours a day, with some awful strategy, not making the best use of his rebate, etc.


Edit: Just read the whole thing, Dan. Wow....

"Just read the whole thing. Wow..."

Instead of the sarcasm, why not explain where you feel I'm incorrect?

The only thing you explained was the 50k thing.

The game he was playing had a 0.28% house edge. Let's take your example that he was betting 10k per hand, with two spots each. He was likely averaging higher than that, but let's stick to that for argument's sake. That means the house was making $56 off him on average per 2-spot hand.

That means it would take 893 hands to erase the 50k.

Is 893 hands a lot? Sounds like it, but no.

According to this page, you get about 209 hands per hour when playing heads up with the dealer.

That means fewer than 4 1/2 hours of play before his edge with the 50k was wiped out.

I'm pretty certain that he played more than 4 1/2 hours on most occasions.

And what of the 20% loss rebate? That's on overall session losses, and he obviously had some minimum number of hours he had to play to reach it. And that's not independent of the 50k, obviously. That's 20% losses AFTER you subtract the first 50k that they gave him for free. So if he sits down with his 50k freeplay chips and loses exactly 50k, he breaks even, and he gets no loss rebate.

Anyway, yes, perhaps he could have squeezed out some slight +EV in this situation if he was able to run few enough hands to where it didn't counteract both his loss rebate and 50k freeplay, but so what? He's introducing huge variance, and his actual edge over the house is minimal compared to the massive risk he's facing. And of course, none of this explains his $15 million win. That was dumb luck, much like it would be dumb luck if I played a 100.24% return VP machine at the $1 level, and walked away $5000 ahead after one night of playing.

The problem with these "Man Who Broke Vegas" articles about Johnson is that they are implying that he's some sort of genius advantage player who smacked the casinos for $15 million before they realized how he manipulated them. In reality, he was either playing -EV or slightly +EV after his freeplay and loss rebate deal, and the $15 million he won was just getting lucky. Oh, and he won't disclose how much he lost in other sessions, so he may actually be down against Atlantic City overall.

[RS__]

My understanding of Don Johnson's deal, and I believe Dan said this also, is that it was not a loss rebate on every losing hand, but rather on the net loss after a session (whatever the definition of session may have been). So your example does not accurately reflect what was offered. Yes, what you describe is a great deal, it just does not exist.

So if you lost 3700 and then won 3500 and the session ended, the rebate is 20. Not quite the EV you want ---I'll let you do the math.

The roulette scenario hadn't to do with DJ's rebate. I was showing Alan how a rebate that's less than 100% can still be profitable. Would you rather I had done the math and showed what would happen if I played 2 spins or 5 or 10, instead of 1 spin?

Alan asked for an example, I showed him one. And now he's complaining about it "how long will that stack of $100's last?" And "you still gotta hit that 1/38".

If you don't know anything about gambling math (ie: Alan), you shouldn't give your opinion.

[Alan Mendelson]

Oh, I'm sorry, RS___ it was another theoretical example. Okay.

But did you take note about what regnis and Dan said about loss rebates being paid when the session is over? I think that screws up your sacred math a bit.

[Alan Mendelson]

I have to admit: the math guys have all the answers. Just show me the money.

[RS__]

Oh, I'm sorry, RS___ it was another theoretical example. Okay.

But did you take note about what regnis and Dan said about loss rebates being paid when the session is over? I think that screws up your sacred math a bit.

Playing multiple rounds definitely changes the math. Doesn't mean it can't be +EV, though.