Playing it smart - Gurus shun side bets; players make 'em - Who's right?

Some casino games feature small "side" or "bonus" bets ancillary to the primary action. Gambling gurus typically advocate avoiding such wagers except under unusual circumstances. Mainly because, although the bets are small, the house takes a big cut from them.

Yet, some side action is more than just popular. It, rather than the basic game, brings the gambling folks to the green felt.

Who's right and who's wrong? The experts who denigrate these wagers as "sucker bets?" Or the slews of solid citizens who drop their dough on them for hours on end? Consider the side bet at Caribbean Stud as an example. This wasn't the first of its ilk. But it was the wager that put the genre on the map.

Here's how it works. For the main game, against the dealer, you "Ante" at or above the table minimum. You can then "fold" and lose the Ante. Or, "call" with a second bet equal to twice the Ante. You win even money on the Ante and get back your Call bet if the dealer fails to "qualify" with at least ace-king. If the dealer does quality, you win when your hand has a higher poker ranking. The Ante still pays even money. The Call bet pays according to the rank of your hand from 1-to-1 to 100-to-1.

Were this the whole story, Caribbean Stud wouldn't have become a casino staple. Players win only 39 percent of all rounds and lose 61 percent. And the 39 percent comprises 23 percent Ante-only and a scant 16 percent Ante-plus-Call. Even more discouraging, players following expert strategy fold 47 percent of their hands.

The side bet is the attraction. It's $1 regardless of table limits or Ante wagers. And scoring is absolute the dealer's hand is irrelevant. Returns vary among casinos. Everyone pays the full progressive jackpot for royals and 10 percent of the jackpot for non-royal straight flushes. Differences arise in the fixed-amount returns for flushes, full houses, and quads. One common schedule is $50, $75, and $100 for these respective results. More generous joints might up the hauls to $100, $250, and $500.

The jackpot generally starts at $10,000. It grows rapidly into six figures because it's pumped by $0.71 per dollar wagered on the side bet, and is only expected to hit once every 649,740 hands. The $0.71 added to the progressive jackpot for every bet is good. The $0.29 kept by the casino and the low hit rate for any return at all, once every 273 hands, are not so good.

With the 50-75-100 fixed-amount payouts, house edge on the side bet is a huge 74 percent when the jackpot is $10,000. Edge drops as the jackpot grows, and equals zero when it gets to $263,205. Over this, players have positive expectation. With 100-250-500 fixed-amount payouts, house advantage is 29 percent when jackpots are $10,000 and players have an edge above $110,547.

The key, however, isn't that the edge eventually flips and gives players positive expectation. Lots of people are drawn to the game and make the side bet round after round with the jackpot well below the critical point, when they're serious underdogs.

The popularity of the side bet is the triumph of utility over probability and the dominance of volatility over edge in the short run. Table game players with modest bankrolls wisely worry about busting out in a short cold streak. The Caribbean Stud side bet is only $1. Even at a $5 minimum, the buck seems like throw-away money compared with the combined $5 Ante and $10 Call bet on the main game. You could lose 15 side bets before they had the impact of one low pair gone sour. And, a single side bet win can recover a lot of main game losses. Then, of course, there's the idea that what seems like chump change puts you just a hand away from a limo to Easy Street. Probability? What's that?

So, is the side bet right or wrong? If you're lucky, hindsight says it's right. If you're unlucky, will you think it was wrong? Your answer will depend on why you gamble and how much you know about what you're doing. As the poet, Sumner A. Ingmark, wrote:

Big statistical leaks from small bets are erosive,
But abrupt losing streaks with large bets are implosive.