Author Topic: The House Edge Really Is Why You Will Lose The Longer That You Play  (Read 7442 times)

Real

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Here's a great article to clear some of the misinformation that's out there. 

The House EdgeIt should be no surprise that the casino has a built-in advantage on its games.  The casinos don't beat the players because they get lucky, they beat the players because the odds are stacked in their favor.  This built-in advantage is called the house edge.  In numbers, it's the the casino's average profit from a player's bet.  For example, in roulette house edge is about 5%. That means for every dollar bet, the casino keeps 5¢ as profit, and returns the other 95¢ to the players as winnings, on average.
Of course if you bet a single dollar just once then you're not going to get exactly 95¢ back -- you're either going to lose the whole dollar or win more whole dollars.  But that's beside the point.  The point of the house edge is to see what the average loss is.  If all the roulette players in a casino collectively gamble $1 million on a Friday, night, the casino expects to pay back around $950,000 as winnings and keep around $50,000 as profit.
The longer you play, the closer your losses will approach the house edge. That's another way of saying that the casino always wins in the long run. The twist is that the house edge tells us how much the casino will win on average. Here's a program that plays roulette to show what happens the longer you play.  Note that the actual house edge in American roulette is 5.26%.



House Edge Simulator
Bet $5 on red...
Total Amount Bet
Amount Won
Percentage Loss
1 time
$5
-$5
-100%
10 times
$50
$0
0%
100 times
$500
$0
0%
1000 times
$5000
-$60
-1.2%
100,000 times
$500,000
-$26370
-5.27%

What you probably saw from the test above is that between 1 and 100 times, anything could happen.  You might be ahead after 100 rounds.  But the more rounds you play, the more likely you are to lose.  And after 100,000 rounds your loss will be pretty close to the 5.26% house edge.
The casino doesn't have to beat every player every time.  They just know that they'll win around 5.26% of the total of all roulette bets placed over the year.
So that's how the house edge works.  The casino doesn't have to destroy you with terrible odds -- they give you an almost even game and make just a few percent on each bet on average.  And that's why they don't have to cheat: they have a built-in mathematical advantage on every game, so cheating is pointless.  All the have to do is get you to play, and they'll win in the long run.

The grindSo if the casino takes only a 5.26% profit on roulette, why do most players lose 100%?  It's because the house edge applies to the amount you bet, not the amount you take to the casino.  Let's say you sit down at a roulette table with $100, and bet $5 a spin. You're betting about $150/hr., even though you brought only $100 with you.  That's because you win some rounds as you play, and you're betting from your winnings.  After 13 hours of play (if you last that long), you've bet $1950.  And 5% of $1950 is $97.50, almost your full $100.The effect of the house edge whittling away at your stash as you constantly rebet it is called the grind.  To lessen the effect of the grind, play games with a lower house edge, and play for shorter periods of time.
« Last Edit: September 20, 2014, 06:48:05 AM by kav »


 

Jake007

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Re: The House Edge Really Is Why You Will Lose The Longer That You Play
« Reply #1 on: August 07, 2014, 06:53:47 PM »
If house edge trumps everything, the question is WHY PLAY?

I keep asking and the only answer is AP. I have AP with the system I have and others have developed on their own. Your AP is just different then my AP. Essentially, you are just saying your AP is better than my AP without offering anything to the discussion. Thats like saying your Ferrari is better than my Ferrari, but your Ferrari is always in the garage where no one can see it.
 

Real

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Re: The House Edge Really Is Why You Will Lose The Longer That You Play
« Reply #2 on: August 07, 2014, 07:02:39 PM »
Via advantage play, you're overcoming the house edge vias your bet selection.  For example, sort players at bac. and blackjack.  They're no longer playing just the random game, but are using information about the cards in order to place a bet that will have an edge.

Why play when there's a house edge?You might wonder, "Why play at all if the house has the advantage?"  That's a good question. You're likely to lose when you gamble, which is indeed an excellent argument for not gambling.But of course, even if the odds are against you, it's possible to win.  That would have to be the case, otherwise nobody would play. Anything can happen in the short term.  The odds are against your getting heads twice in a row from two coin flips, but it could happen.  If you played baccarat for a year, you'd expect to be seriously in the red at the end of that year.  But what about for just a weekend trip to Vegas?  You could certainly come out ahead.  The odds are against it, but it's definitely possible.
Another reason is that if you know what you're doing, it's cheap entertainment. A blackjack player using  at a $5 table expects to lose only $1.50/hr.  If she tips $5/hr. that's a total loss of $6.50/hr.  That's cheaper than most forms of entertainment, like movies, and it's certainly cheaper than Vegas shows.
« Last Edit: August 31, 2014, 09:05:43 AM by kav »
 

MrBac

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Re: The House Edge Really Is Why You Will Lose The Longer That You Play
« Reply #3 on: August 24, 2014, 05:32:17 PM »
House Edge LOL, no players lose mainly because they haven't put together a decent game plan including staking plan (clueless), or have been playing too long and when variance kicks in, they are too fatigued / pressured to deal with it.  If I get paid .95 of a unit for a Banker win, I don't mind or if I get paid 35-1 for a straight up, I don't mind.  When is the last time you ever heard anybody say they lost to the house edge or lost the expected house amount?
 

Real

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Re: The House Edge Really Is Why You Will Lose The Longer That You Play
« Reply #4 on: August 25, 2014, 06:29:04 PM »

Quote
no players lose mainly because they haven't put together a decent game plan including staking plan (clueless), or have been playing too long and when variance kicks in, they are too fatigued / pressured to deal with it. -MrBac

MrBac,

No, the house edge is responsible for consuming the largest portion of your bankroll.  It doesn't matter how fatigued/ or pressured the player is, randomness simply doesn't care.  Being tired or lack of discipline is just something that inexperienced or naive gambler's like to use as an excuse for not winning.   It's also the kind of nonsense that some gambling authors attempt to preach and sell because they suck at math.

Here's proof.

In this example, the player plays, off and on, for 10k spins, betting only one unit per spin, just  to keep it simple, on the red/black.

Here's the effect of the variance:  (+ or -) 3 x (square root of 10k x 1) = The player can expect to be somewhere in between losing 300 units or winning 300 units, most of the time.  (This is very crudely accounting for a three standard deviation fluctuation).

Here's the effect of the house edge: The house edge has a negative expectation of 5.26%.  The expected loss from the house edge would be -5.26% x (10k) x (1) = - 526 units.

Again the results are:

Variance: -300 units to +300 units.

House edge:  -526 units.

As you can see, after enough trials, the house edge becomes the largest factor as to why the player will lose.  Even a three standard deviation win is not enough variance to overcome the house edge.  Furthermore, I doubt that anyone would consider 10,000 spins as  being "in the long run".
« Last Edit: August 25, 2014, 06:56:52 PM by Real »
 

MrBac

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Re: The House Edge Really Is Why You Will Lose The Longer That You Play
« Reply #5 on: August 26, 2014, 04:17:18 AM »
You are talking to somebody who plays Baccarat for a living, and very successfully.
 

Real

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Re: The House Edge Really Is Why You Will Lose The Longer That You Play
« Reply #6 on: August 26, 2014, 05:21:53 AM »
Or so you say.

In baccarat, you must have the edge in order to win in the long run.
« Last Edit: August 26, 2014, 05:23:46 AM by Real »
 

albalaha

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Re: The House Edge Really Is Why You Will Lose The Longer That You Play
« Reply #7 on: August 26, 2014, 06:55:42 AM »
House edge is a fixed tilt in the favor of a casino and against the player. It can not be denied but house edge alone can't guarantee a win for any casino. Say, I am playing american roulette and betting on a straight up number for 10,000 spins. If I am lucky to get +3 SD on my bet, I will win about 312 to 327 times, so I bet/gave 10,000 units to casino and got back 36x312=11232 chips to
36x 327=11772 chips back. The existent and the so-called "dreaded" house edge won't take any extra chips from me for its very existence and I will be at a profit of 1232 to 1772 chips still.
                     Mr. Real/Xander, please use ur calculators again and enlighten me as to how even with +3SD in my favor, house edge will kill me in 10 k bets?

It is the randomness/unpredictability/negative variance/co-incidence that kills us for sure, in long run. House edge is just like a 110 Kg boxer of casino with 105 Kg boxer of players. It is not necessary that 110 Kg boxer will win all the time or even most of the time. It is more of a matter of who punches the opponent better. An AP player does try to do the same by dealer signature/speed cloaking/ bias analysis. Even with the so-called "advantage" to his side, he may still lose. Similarly, any player can still win and keep up remaining ahead, irrespective of the so-called "dreaded house edge". I personally know a few players who are playing for decades and are ahead in profit.
                                                     The theory of house edge expects the players to play all 38 numbers by 1 chips, so that they constantly keep earning 2 chips per spin from everyone and people get shrinking bankroll on each and every move. Unless a player is foolish enough to bet every number by 1 unit, house edge is not guaranteed to help casino. Even with a slight tilt, casinos can lose money in a particular session/day.
 

MrBac

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Re: The House Edge Really Is Why You Will Lose The Longer That You Play
« Reply #8 on: August 26, 2014, 12:23:45 PM »
 
Or so you say.

 In baccarat, you must have the edge in order to win in the long run.
 
LOL really, care to define this long run, and when I should expect it??  Would you like me to attach a huge wad of money with your name on a sticky for you?  [in fact I don't need to, pop over to the BaccaratLabs forums and browse the thread Baccarattalk you will find said images, nothing like inadequacy to silent the naysayers].    I am not what you perceive as your average gambling smuck.  I have hit a constant 100% profit of a buyin for my last 8 sessions at the casino, I always aim for 100% because people tell me I go for too much, so I do this to prove them wrong, it is like a personal challenge.  I recently ran up $2k into +$50k in approx 5 weeks of 7 day action earlier this year via consecutive 33 ~ 37 winning streak.  I also don't trend, don't guess and use mathematical probability approaches using my propriety staking plan, which is necessary as there is no definable edge to be had other than perhaps yourself and how you are playing.  While you may get lucky winning a hand, like 9-8 for example, my consistent success is more than just luck. 

Roulette is not my game, I only registered here due to the imbalance/ equilibrium thread, which I have used and still track in my play, I really don't wish to engage with negative people.   

 I really don't know what I am telling you this, suffice to say the house edge does not faze or concern me in the slightest.
Quote
It is the randomness/unpredictability/negative variance/co-incidence that kills us for sure[/quote which is why you need something a little different when it comes to a betting system, as well as confidence in what is you are doing.
 
« Last Edit: August 26, 2014, 01:22:43 PM by MrBac »
 

Real

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Re: The House Edge Really Is Why You Will Lose The Longer That You Play
« Reply #9 on: August 26, 2014, 09:02:48 PM »
Mr. Bac,

Don't take this the wrong way, but I'm not impressed by your claims.  I'd be more impressed by you demonstrating why you feel your method will work mathematically and whether or not it's related to a real AP method such as sort play or counting the side bets. 

Trying to prove that you're method works by showing a large stack of money is simply ghetto, and impresses nobody, but other people from the ghetto perhaps.  Claiming that you turned 2k into 50k isn't something that impresses me.  I know of real APs that have made millions.  Their plays are documented by people such as Bill Zender and Dr. Elliot Jacobson.

I'm guessing bac labs is some system site for bac system players?  I find real AP discussions on  Dr. Elliot Jacobs site to be more interesting.  The Wizardofvegas also has some good discussions from time to time. 

-Real

« Last Edit: August 26, 2014, 09:06:03 PM by Real »
 

albalaha

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Re: The House Edge Really Is Why You Will Lose The Longer That You Play
« Reply #10 on: August 27, 2014, 05:36:30 AM »
Real,
          You did not answer me. You are merely curve fitting data to prove your point. Why should someone play Red/Black by 1 unit every spin? He can play a straight up too and at +3 SD, despite the "deadly house edge" he will win a nice sum, flat bet.
           It seems that you are too much obsessed with the maths behind house edge and it has taken away your cognitive faculty too.
A man with "house edge phobia". lol
 

MrBac

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Re: The House Edge Really Is Why You Will Lose The Longer That You Play
« Reply #11 on: August 28, 2014, 02:35:52 PM »
I know of real APs that have made millions.  Their plays are documented by people such as Bill Zender and Dr. Elliot Jacobson.
Elliot Jacobson LOL, you have to be joking.  I've read his stuff, in particular the massive edge he claims you can get tracking cards and betting the "super pay egalite" side bet, particularly the zero Tie which pays 160-1, it is the biggest load of nonsense I've read.  I see the zero tie hit, any time within the shoe (hardly ever if never at the end of a shoe), any card combination, 7, 3, picture for one side, 6,4 picture for the other. 

Jacobson is a mathite, very good at running computer sims, posting counting strategies that don't, won't work in live play.  My Bacc play is based on maths incidentally, which is all I will say about it. 
 

Jughead

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Re: The House Edge Really Is Why You Will Lose The Longer That You Play
« Reply #12 on: August 28, 2014, 04:41:57 PM »
which is all I will say about it.

Hi there, MrBac,

Can you explain more of the super egalite?  Or, put up a link.

Where is your site?

Thanks.

P.S.  Why do baccarat players hang out with roulette players, yet neither plays the other's game?
« Last Edit: August 28, 2014, 07:09:56 PM by Jughead »
 

palestis

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Re: The House Edge Really Is Why You Will Lose The Longer That You Play
« Reply #13 on: August 29, 2014, 02:50:57 AM »

Very convenient assumptions. That you play the same amount all the time on an EC.
These people at vegasclick  must aim their site to people with the brain of a 5 year old.
Who do they think they are kidding?
_ If 1000 people out of the millions that go to Vegas once a year, fly back home with $10 million won, when is the casino going to get their money back? At 5.26% they have to go back 1000+ times in 1000+ years?
 _ At the same time if the casinos took in $5 billion out of losers in one year does that represent a 5.26% rate?
_ With a table full of chips valued $500, they pay a winning number say $200. What happens to the other $300 they shovel  into their slot?
   Is that 5.26% of the total amount wagered?

There are too many unknown parameters in the game. They vary in size and frequency. Making the assumption that the parameters remain constant is wrong. It doesn't represent the true picture. Not every roulette player is like us, members of forums. We are indeed a small minority. 99% of players  don't go to play with a system in their mind. They go with $500 and want to go home with $5,000.
And they play based on the belief that it could be their lucky day. And if they win $1000 they go for more (greed), thinking they are on a roll. And then they lose it all. How does the 5.26% fit in?
Most players don't go every day. Most likely they are all sporadic players, that go once in a while. Therefore there is no long run for them to lose 5.26% in 10,000 spins. There won't be 10,000 spin for them. Not even 1000 spins. It's just new faces all the time trying their luck. it's like restaurant always full but each time there are different people. Maybe a few repeat patrons.
A player can play small bets as if he's lucky to accumulate some money he can bet huge amounts and win big. How much of the 5.26% is the casino's own money trying to get it back, and not the player's money? Another unknown parameter.
But most important of all is the way the players play.  Players don't quit if the size of their win is small. They want to win an amount worth their time and the trouble getting there. The trouble is they will lose it all before they get there. And there are  players that  won't be satisfied until they win their bankroll 10fold.
Unfortunately in roulette the winning rate rises disproportionately to the losing rate. A fact often overlooked. Because you lose it all when you lose and you still lose some even when you win. 20 chips 20 numbers, you win and you net 15 chips. Not 36. Is that 5.26%.
I know you mean  in the "long run". The question is will there be long run? 
« Last Edit: August 31, 2014, 09:06:33 AM by kav »
 

MrBac

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Re: The House Edge Really Is Why You Will Lose The Longer That You Play
« Reply #14 on: August 29, 2014, 06:41:38 AM »
which is all I will say about it.

Hi there, MrBac,

Can you explain more of the super egalite?  Or, put up a link.

Where is your site?

Thanks.

P.S.  Why do baccarat players hang out with roulette players, yet neither plays the other's game?
Here is a link to the "super pay Egalite" ukcasinotablegames.info/putnosuperpayegalite.html

I only joined the forum because of this post; newbielink:http://rouletteforum.roulette30.com/index.php/topic,87.msg816.html?PHPSESSID=ebc830c6a49ab75307c9c82abda12c6f#new [nonactive] as it is something I have used and track at the Bacc' tables, but thanks to a kind soul have developed something far superior.  Playing 6 nights per week, I have won on my last 11 trips over £6k.

You can't access the forum Garnabby
« Last Edit: September 20, 2014, 09:42:41 AM by kav »