Ask The Slot Expert

Dear Frank,

I'm writing in response to "Bootlegger's" latest article. He really confused me. I strongly disagree with his opinions on money management. Here's my thinking on the subject.

First you have to decide if you believe in streaks or not. I do. The intent of money management is to provide a discipline so that you will be in the game when a streak hits. If you're not playing, you can't win.

Let's look at slots. If you pick lousy slots, you play poorly, etc. then money management will not save you. If you play perfect and do everything right, then money management will not guarantee you a winning session either. All money management does is to provide a discipline that helps you stay and forces you to think about what you're doing before you enter the casino.

If you played a slot machine that returned EXACTLY 95% of everything you put in all the time, money management wouldn't help. Also nobody would ever play those machines a second time. Some of the time the machine pays less than 95% and some times it pays more. Your best method to control the game is to use your legs if the machine is cold and to stay if the machine is hot. The decision point on when to stay and when to go is part of your money management style.

So...what's the purpose of attacking money management? What's your opinion? How about John Robison?

We'll be in Las Vegas for a week in February. Looking to play some Roulette. Heard that the new Venetian has single zero wheels. Do you know what the limits are?

Later,
Bill

Dear Bill:

Frank will post an article with his ideas on Money Management in a few weeks. In the meantime, here's my opinion.

Bootlegger is right. The Money Management techniques described in many books "cannot cause a player to win money." In fact, no Money Management system can turn a negative expectation game into a positive expectation game.

I wrote an article for Midwest Gaming & Travel called "The Truth about Money Management." It was an excerpt of a chapter with the same name from my forthcoming slot book. In the chapter I describe a comparison I made of two betting systems.

I have the payout programs for over 1000 real slot machines. I picked an 89% payback Double Diamond machine and wrote a program that simulated playing the machine using these two betting systems. One system I call the Defined Action System. In this system, I play a certain amount and then quit. I call the other system the Plateau System. This system has a win goal and a loss limit. Whenever I hit the loss limit, I quit playing. Whenever I hit the win goal, I raised both the win goal and the loss limit. The theory behind the system is that you raise your goals and limits while the machine is hot and let the loss limit protect you when the machine turns cold.

After 1000 runs, I compared the overall totals of both systems. I lost less money playing the Plateau System. But when I looked at how much I lost as a percentage of my total action, I found that I lost 11% of the total amount of money I bet under each system. Eleven percent is exactly the loss predicted by the payback of the machine. The only reason I lost less money using the Plateau System is because I wagered less money using the system.

The moral of the story is this: In the long run, you will lose the amount of money the math of the game says you will lose and it doesn't matter what Money Management system you use.

Turning to your example of playing the 95% machine, using loss limits doesn't help in the long run. If you play the machine long enough, you'll lose 5% of your total action. It doesn't matter whether you play in one non-stop orgy of handle-pulling or in many shorter, money-managed sessions. For what is the long run but the sum of a series of short runs.

Still, I'm a firm believer in Money Management. And for exactly for the reason you stated. Money Management makes you think about what you're going to do before you start playing. It makes you think about whether your $200 bankroll is really enough to try the $25 slots. It helps prevent you from losing your entire bankroll your first hour or day in the casino.

I practice Money Management for emotional, not mathematical, reasons. There's no mathematical justification for leaving a cold machine. The probability of getting a hit on my next spin is the same regardless of whether my last spin was a hit or a bust. But it certainly feels better to take some of my session stake away from the machine than to leave empty-handed.

So, both you and Bootlegger are right. The Money Management you described keeps you in control of your game. You're unlikely to bet the rent money going for a royal or another trip around the Monopoly board. And the Money Management techniques Bootlegger described (raising bets during a winning streak because you're playing with the casino's money, betting progressions, win goals, stop losses) don't alter the math of the games one bit, so they can't be the keys to winning negative expectation games.

As I said at the end of my article, "Money management may not be a panacea, but it is not wasted effort. Money managers never gamble away their buffet money. Money managers never lose their toll and gas money. Money managers can enjoy playing in the casino because they're always in control. Money managers know when they'll stop before they start."

Best of luck in and out of the casino,
John

P.S. I didn't know that The Venetian had single-zero roulette. I've been there many times and didn't notice them--but, then again, I wasn't looking for them.