Rant: Rising Tides Lifts All Boats
I’m still a little amazed that the fine people on Gambling with an Edge wanted to talk to a small market local hustler like me. I’m considering it a great honor to be guest on a show that has hosted so many great players. After my interview on Gambling with an Edge, I’ve gotten a bunch of new twitter followers. I’m not trying to monetize twitter, so the only real value I can reap from the platform is the relationship I can form with other players.
Mission Accomplished: I’ve had a number of awesome conversations with people from all over the country… I really love this community. Sure, there are a few bad eggs out there… Sure, there are people who talk a bigger game than they really have… Sure, there are some shady characters out there… Sure there are some people that are just playing a game of telephone with bad information…
But I think most people have good intentions and are embracing an entrepreneurial spirit trying to make a few bucks doing something they enjoy. That’s the pack I want to run with! Even if they are wrong, I can understand why they did what they did and how they got there. Those are the true professionals, even if they are only beginners…
I had a few conversations recently about deal making on plays, and I thought that was worthy of a blog post. Reason being, I think a fair number of people are making mistakes in their deal making.
On a related note, “Jay” was nice enough to drop by my blog and let me know that I don’t know what I’m talking about in terms of how the deal went down with the New Jersey Ocean Magic play… I fully admit, that is entirely possible… Likely even… I’ll say it again, I was not involved in the play.
I suspect that means he shot some of the angles that gamblers like to shoot each other… The same deal I’ve heard several others making in the community… The free roll.
Let me give you an example.
Let’s say I was to offer you a game…. Not the entire world, just you. Here are the rules:
You will throw 1 die. It’s a fair die, I promise. Minimum & maximum bet is $100,000. You can roll one time per day.
Here is the pay table:
1 - 5: $100K loss; 6: $600K win
Clearly you want to bet 6. Why? It’s a +EV bet!
5/6 of the time, you will lose $100,000. 1/6 of the time, you will win $600,000.
EV = -100,000*(5/6) + 600,000*(1/6) = about $16,667K per roll, about a 2.8% advantage.
You like that bet right? But what if you don’t have $100K?
Well, you need a player with a big enough bank roll to take advantage of those terms. You and the big player need to strike a deal. The most common deal I’ve heard described from a number of people goes like this:
- I’m so sure this is a winner; I’ll split the profits with you. If we lose, I’ll cover the loss.
This is a bad spot to be. Let’s play it out…
The big bankroll agrees to back you for 6 rolls. The die lands exactly how you would expect it to land, one of each number hits over the course of 6 days… When you lose, you owe the big player, when you win you split the profit.
Here are each player’s results:
You - Lost $100K five times and won 50% of a $600K win once. Total = a $200,000 loss.
Your partner – Lost $0 five times and won 50% of $600K once. Total = a $300,000 win.
Which side of this deal do you want?
I fully admit this is a bit of a cartoon-ish example… but I think it applies to many common gambling arrangements. Whether it be the OM New Jersey thing, or if you call me because you have a river dragon major in front of you that is ready to pop… It’s a one trial deal. The math still works… The person who is offering the free roll is in a much worse position than the person who is getting the free roll. This is because the person getting the free roll has to absorb 0% of the losses but shares in the win.
While I want to be the free roller, I think that is ethically questionable. I want to beat the casino, not other people trying to beat the casino. I understand the “no honor among thieves” principles, but I don’t like them. I would much rather treat advantage play as a real profession and offer real advice to other players so there is a convention in deal making that makes sense for all parties involved.
JFK - "A rising tide raises all the boats"
Hey… Beating the casino is hard enough… Why are we trying to beat each other? If you are trying to beat other players, how are you any different than the casino? Does it really make you feel good that you broke someone else? Just think of all the extra plays you will get now that you’ve bankrupted one other hustler. I’m sure no one else will come along… You’d better hope the next guy that comes along is not shaper than you! Karma can be a bitch… Keep playing this game if you like, but I’m out.
Here are a couple of alternate ways to structure a deal:
1. Share equity in the play. i.e. we know this machine is going to require$ X coin in. If you have 20% of what’s needed, then we pool bankrolls and sweat the play together taking a pro-rated cut of both the win and the loss.
2. We mutually agree on what the play is worth, and the play is sold based on EV.
I very much prefer #2.