Win goals and loss limits

I once was giving a daylong seminar for a park district, teaching the basics of blackjack, craps and roulette. Most of the attendees were beginners whose main gambling had been playing the slots, often while on park district bus trips to casinos.

But one gentleman spoke up as I was walking players through basic strategy at blackjack, and playing a few sample hands.

"I was hoping you could teach us something about money management," he said. "Isn't that the key to winning?"

I had to tell him that no, money management is not the key to winning. It can be a key to keep from losing more than you can afford. But raising and lowering bets, choosing a game appropriate to bankroll, deciding when to get out — the kinds of things players mean when they start talking about money management — can't change the odds of the games.

In the long run, craps is going to take 1.41% of your pass line bets and 16.67% of your any 7 wagers, double-zero roulette is going to take 5.26% of your wagers on almost any option, and baccarat is going to take 1.06% of the money you bet on banker. Nothing you can do with managing your money can stop that.

What money management systems can do is stop you from reaching for your wallet when things are going badly, or from giving back all the chips or credits you've won when you're ahead.

An old colleague of mine used to recommend a system of win goals and loss limits. An average player with a limited budget would have specific numbers in mind — and stick to them. If you bought in for $100 at a blackjack table, you might set a win goal of $50 and a loss limit of $50. If you dropped to $50, you'd leave the table. Same thing if you reached $150. Goal or limit reached, you walk.

Some players find that a little too restrictive, not so much on the losing side as when the wins are coming. When you're on a hot streak and the wins mount up, do you want to leave the table? Not many do.

I know when I first tried the win goals/loss limits system, I found it easy to move when I hit the loss line. I'd tell the dealer, "I think I'll go try to change my luck," and leave the table. I'd set an overall loss limit for the day, and if I hadn't reached it, I might just move to the next table, or to a video poker machine, or play something else. I just wanted to make it a conscious, clear-headed decision to reach into my wallet for a new buy-in.

When on the winning side of the game, I didn't want to move. So I adjusted to system of floating win goals. If you reach your win goal, you re-evaluate. Instead of leaving with $150 in front of you, you adjust your loss limit so that you move on if you drop to your original $100 buy-in. If you reach a new win goal of $200, you re-evaluate again, moving up the loss limit once more.

That enables you to occasionally build up large wins without the risk of blowing through your entire bankroll. About the fourth or fifth time I used the floating-goal system, I was fortunate enough to see the positive side. I had only $200 with me, and bought in at a $5 blackjack table for $100. I had a couple of blackjacks, won a couple of double-downs, and increased bets from $5 to $10 to $15.

At $150, I upped my win goal to $200 and my loss limit to $100. I kept winning, and the win goal increased to $250, $300 and $350. After I reached $350, I hit a rough patch. Instead of reaching my $400 goal, I dropped to my $300 limit and walked away with a $200 profit.

That doesn't turn around the math of the game. The house still has an edge, and there will be a lot more sessions in which you hit a loss limit than sessions in which you ride a hot streak to higher win goals. Over the long haul, the house will collect its percentage of your total wagers.

And a player who has an edge on the game, such as a blackjack card counter, won't use this system. When properly bankrolled, and with the mathematical edge, the player has no reason to leave just because a specific win or loss has been reached. But for an average player who knows the house has an edge, floating win goals and loss limits can help keep your head in the game, and your hand way from your wallet.