Would Having an Edge Let You Gamble for a Living?

18 May 2005

By Alan Krigman

Solid citizens can play some casino games at an advantage. Card counters at blackjack and controlled shooters at craps do it. Both skills demand dedication to master and sustain, and both require finesse to use since the bosses will take countermeasures if they suspect what you're doing. But they're neither cheating nor illegal. Further, they exploit inherent features of the games rather than loopholes that could be closed once understood.

Make believe you could master some such technique. No matter how adept you become, the best you can hope to achieve is between 0.5 and 1.5 percent edge. How confident of a regular paycheck would you be if you knew you could sustain, say, 1 percent edge?

One way to answer involves the action needed to reach some average earnings based solely on that 1 percent. Posit a target of $1,000 per week. The 1 percent implies a handle of $100,000. Handle is gross wager, not cash in your fanny pack. At blackjack, averaging $100 per round, one hand at tables with four total spots receiving cards would mean 10 hours. At $25 per hand, the time jumps to 40 hours. More crowded tables take longer because rounds dealt per hour decrease. With fewer players it's faster, but you'd probably fear calling too much attention to yourself.

Averaging $1,000 per week ignores the inevitable swings in your fortunes. You might not balk at winning $49,000 one week, then losing $5,000 every week for the next two months. It also works if you lose $5,000 per week for two months then win $49,000. But, if your bankroll is only $40,000, you won't be there the ninth week to try. To decide whether having an edge will let you turn pro, you must therefore also weigh the chance of going bust.

In principle, professional gamblers should treat their total assets as their bankrolls. In practice, you may not be ready to take a truly long-term view and put your house, car, retirement or other savings, and credit card borrowing limits at risk.

Maybe, instead, you envision a scenario such as a $4,000 limit on your loss in any week or a $16,000 rout in any month. With this, you can ascertain the chance of reaching your goal a) weekly being up by $1,000 before you're down $4,000, b) monthly being up $4,000 before you're down $16,000, and c) week-in and week-out by winning $1,000 before losing $4,000 for eight weeks running.

The specifics depend on the game you select, the strategy you use, and the way you size and vary your bets. To get an idea of what can happen, assume your system gives you 1 percent edge and a "standard deviation" of 3 units (picture this as a typical bankroll change of $300 up or down per coup), on an average bet of $100 per round. For comparison, Basic Strategy at blackjack with flat bets of $100 per hand would have an edge of 0.5 percent for the house and a standard deviation of 1.13 units.

The accompanying table shows that with the edge, bankrolls, and profit goals indicated, you're favored either weekly or monthly. Likewise, although less so, when you're a slight underdog. The data also indicate that while you have a strong upper hand weekly, you can't expect a paycheck week upon week.

Chance of meeting profit goal before losing stake
under favorable and slightly unfavorable conditions

Condition	Edge +1.0	Edge -0.5
	Std. Dev: 3.00	Std. Dev: 1.13
win $1,000 before losing $4,000	81%	77%
win $4,000 before losing $16,000	83%	66%
win $1,000 before losing $4,000 before 8 weeks in a row	18%	12%

Casinos make money with a small edge by relying on the law of large numbers. You may not be able to do the same because numbers that seem large to you are small to the casino and to the statistics underlying most gambling situations. So, learn to play at an advantage if you're motivated enough to acquire the skills. But don't kid yourself into thinking you won't have downs as well as ups. Here's how the poet, Sumner A Ingmark, put it:

Of certainty, having a higher degree,
Is far from the same as a flat guarantee.