Posts Tagged ‘house edge’

Blackjack streaks and the house edge

Thursday, December 30th, 2010

If you’ve been reading this blog, you have probably read over and over that following basic blackjack strategy can reduce the house edge to 0.5%. That is one of the lowest house edges of any casino game. However, it is still a disadvantage. Even with the edge that low, it means that you would lose 0.5% of your wagers to the casino, with you losing more money than you’re winning.

A common response to that is “well, if I’m at a disadvantage and am bound to lose money, why would I play blackjack?” That’s a good question. A disadvantage, however small, is still a disadvantage. So why would anyone gamble on a game where they have a disadvantage? There are a few reasons.

First of all, playing blackjack is fun. Just like going to a theme park, seeing a movie, or going on a vacation, having fun costs money. A trip to a casino shouldn’t be looked at as a way of making money. Instead, it should be looked at as entertainment. Like most entertainment, it usually isn’t free.

Having said that, just because you’re at a disadvantage doesn’t mean you can’t make money. Any thinking to the contrary is due to a misunderstanding of odds. Odds tell you how likely something is to happen, but that doesn’t mean that unlikely things don’t happen. They happen all the time. The odds of being struck by lightning at some point in your life are 1 in 6,250. Despite that, there are people who have been struck multiple times. That’s not “defying the odds,” because if you take the total number of people struck by lightning, the statistic still holds up.

The same goes for blackjack. The odds say that you will lose $1 out of every $200 that you wager. However, you could also wager $200 and win $50. You could also wager $200 and lose $75. The house edge doesn’t mean you will lose 0.5% of every hand, every sitting or every trip to the casino. What it means is that in the long run – and we’re talking thousands or millions of hands – the casino will win 0.5% of all money bet on the game of blackjack.

That is in the long run. Short term, it is quite common to go on a good streak and win lots of money at the blackjack table. It is those exciting streaks that make people come back to the table again and again to play. Also, anyone who counts cards, and does it well, can actually gain an advantage over the house. Keep in mind, though, that the casinos frown upon card counting. Though it isn’t illegal as long as you’re not using anything to help you count, casinos will often remove and ban a player who is caught counting cards.

Blackjack Card Counting

Monday, May 3rd, 2010

Okay, I have put off writing about card counting for this long, for a variety of reasons. The most obvious reason is that this website is primarily geared toward online blackjack and card counting does not work online. However, I have covered other topics that are applicable only to blackjack games played in a brick and mortar casino.

Other reasons I have put off writing about card counting is that if you do it wrong, you could lose a lot of money. People often increase their bets when they think the count is in their favor and then get cleaned out because they were counting cards wrong, had the wrong number of decks, or made some other sort of mistake. For that reason, before using it in a casino – if you do it at all – then you should make sure you know what you’re doing.

The other major reason I do not advocate card counting is that casinos frown upon it. It is true that card counting is not cheating and it is not against the law. However, if a casino catches you counting cards, you will be removed from the premises and possibly banned. There are current court battles over whether or not that practice by the casinos is legal. Rest assured, though, that you do not want to get caught counting cards. For that reason, I do not advocate that strategy and instead say to use blackjack basic strategy, which reduces the house edge to a miniscule 0.5%.

Having said that, though, I know that a lot of the blackjack players who visit websites such as this one want to know about card counting, either to simply further their knowledge or so they can try it for themselves. For that reason, I have decided to cover the basics for card counting and will write a series on the subject this week. Here is some basic information just to give you a little background. Again, remember that card counting does not work in online blackjack.

The idea behind card counting is the fact that a deck that is rich in tens is beneficial for the player. Because of rules like splitting, doubling and the 3:2 payout for a natural blackjack, 10-value cards help the player more than the dealer. Therefore, when counting cards you are attempting to discern how many tens remain in play. If the deck is rich in tens then you would increase your bet but if it is low in tens you would be more conservative.

Rain Man introduced most of the world to card counting and in doing so, it perpetuated a myth about the strategy. That myth is the idea that you have to be either a mathematical genius or a savant to be a card counter. That is not true. In fact, if you can count to one, you are capable of card counting. The simplest form of card counting is a high-low count, where each card that is dealt is given either a value of +1 or -1 . You then either add or subtract one from the count whenever a card is dealt and raise or lower your bet depending on how high or low that count is.

That doesn’t sound too tough, does it? That’s because it’s not. Certainly card counting is more complex than counting to one and there are many different types of card counting techniques, though. I will cover the subject in more depth throughout the week.

Blackjack Strategy: Don’t Take Insurance

Friday, April 30th, 2010

In the game of blackjack, whether you’re playing online blackjack or at a brick and mortar casino, you and the house have the same goal. That goal is to make money. Unfortunately, those goals are mutually exclusive. They can’t both occur at the same time. If you win money, the casino loses money and vice versa. For that reason, you need to keep in mind that while the dealer should be trusted, his interests are not the same as your own.

There are a lot of rules and decisions that are beneficial to the player, such as splitting and doubling in the correct situations. Unless you ask for help, though, the dealer won’t remind you to do that. The dealer probably won’t say, “You have a pair of sevens. Would you like to split them?” It’s up to you to know that you should split a pair of sevens.

However, there is one decision that the dealer will always ask you about and that is insurance. If the dealer has an ace as an up card, he will ask if you want to buy insurance against a blackjack. Not only that, but “Insurance pays 2 to 1” can usually be found printed right on the blackjack table, just to remind you. Is that out of the kindness of his heart? Hardly. The dealer is quick to ask about this because insurance is a bet with a high house edge. You’ll notice that the table doesn’t have “You should always split aces” printed on it.

Insurance is a suckers bet and you shouldn’t take it. For those who don’t know much about the rule, insurance is offered when the dealer has an ace as an up card, because in that case if he has a 10 in the hole, he has a natural blackjack and you would always lose unless you also have a blackjack. The dealer then offers insurance where you get paid 2 to 1 if he does have a blackjack and if he doesn’t, he wins that side bet and can also win the original bet if he still beats your hand.

Therefore, insurance is basically a bet that the dealer has a 10 in the hole. While there are more cards with a value of 10 than any other value, you need to remember that it’s still outnumbered. There are 4 cards (10, J, Q, K) out of every 13 that have a value of 10. That means there are 9 cards out of 13 that have a different value. In that case, the dealer would have a 69% chance of having something other than a 10 in the hole and a 69% chance of winning the insurance side bet.

For that reason, you shouldn’t take insurance when it is offered to you. In fact, as a general rule you should avoid any side bets in blackjack, because almost all of them have a higher house edge than the regular game. The only exception is if you are counting cards, which you can’t do at an online casino, and determined that the deck is rich in tens. In all other situations, if the dealer offers you insurance, say thanks, but no thanks.

Blackjack Strategy: Splitting Aces

Tuesday, March 9th, 2010

Splitting pairs is an important part of blackjack basic strategy. Many beginners will learn when to hit and when to stand, but don’t memorize the strategy for splitting pairs or doubling. By excluding those beneficial moves, though, you increase the house edge to 10%. Playing with proper basic strategy, including when to split and double, however, can reduce the house edge to as low as 0.5%. Therefore, knowing when to split pairs is essential. The first hand that we will cover is a pair of aces.

An ace is the most powerful card in blackjack because it is the only card that is adaptable. The player can decide to make the ace be worth one point or eleven, whichever is more beneficial. By default, an ace will start out as an eleven unless it would cause you to bust, since you want a higher hand total. However, once you draw a card that would cause you to bust, that simply makes the ace a one and turns your soft hand into a hard hand. The power of an ace is that when you have a soft hand, it is impossible for you to bust, so there is no risk in trying to improve your hand.

That is not the only benefit of having an ace, though. With an ace, it’s possible that you will draw a natural blackjack, which is an ace and a 10-value card (making 21 points with two cards). A natural blackjack is the best hand in the game and it pays out 3:2. Since there are 4 different cards that have a value of ten (Jack, Queen, King, 10), when you start a hand with an ace you have a 4/13 chance of drawing a natural blackjack.

For these reasons, any time you have a pair of aces, you should always split them. It makes no difference what card the dealer is showing. Together that hand is nothing but a soft 12 (with one ace as an eleven and one ace as a one). Twelve is a stiff hand that is likely to bust but is also likely to be outdrawn by the dealer. By splitting the aces, though, you take one weak hand and turn it into two hands that have the potential to be very strong. Even though you have to double your bet to split, turning one bad hand into two probable good hands is always worth the risk.

Blackjack Variation: Extreme 21

Tuesday, March 2nd, 2010

Like poker, blackjack is a game that lends itself to a lot of game variations. In its simplest form, it is a game where you try to outdraw the dealer without going over 21. Beyond that simple premise, there are countless opportunities for variations. I have already covered the blackjack variations of pontoon, Spanish 21 and double exposure. This time I am writing about extreme 21.

Extreme 21 gets its name for the fact that the dealer can’t stand. In this variation, one player at a time faces off against the dealer. The player is dealt two cards face up and the dealer is given one card face up. There is no hole card in extreme 21.

In this blackjack variation, once the player is dealt two cards and the dealer one, the player can hit, stand, double, split or whatever. If he busts, the player loses. Once the player stands, the dealer begins drawing cards. Instead of having a certain number to draw to, such as 17, in this variation the dealer draws until he either beats the player’s total or busts.

If the player gets to exactly 21 points, he wins automatically and is paid 1:1. If the player splits, the dealer has to play against each hand individually. There are a few rule variations in extreme 21. Sometimes players are allowed to double any time, while at others they can only double on the first two cards. Sometimes redoubling and resplitting are allowed, but other times they are not.

Because the dealer will continue drawing until he either beats the player’s hand or busts, basic strategy for extreme 21 is different from traditional blackjack. Generally speaking, the strategy for extreme 21 is more aggressive, since the dealer will keep drawing until he either beats your number or busts. Therefore, you would never stand on a 13 or 14, for instance.

Extreme 21 can sometimes be found in brick and mortar casinos, but is more often found in online casinos as an alternative to traditional blackjack. Extreme 21 has a much higher house edge than traditional blackjack. Even using the correct strategy, the game has a house edge from 0.63% to 1.16%, depending on the rules of that particular game.

Blackjack Betting Limits

Monday, February 22nd, 2010

So you’ve memorized blackjack basic strategy and want to put your knowledge to the test at the tables. How do you choose which table to play, though? In brick and mortar and online casinos, there are normally several variations of the game at the blackjack tables. One thing that separates the tables is the number of decks (though this does not apply to online blackjack). Many casinos will have different tables that range from one deck to eight. Remember that the more decks there are, the more the odds favor the house. However, single-deck games often only pay 6:5 for blackjack, in which case the lower deck number is not better.

The other major variation in blackjack tables is the betting limit. Blackjack tables typically have two limits: a lower limit and an upper limit. Both need to be taken into consideration. The lower limits can be as low as $1 per bet and as high as over $100, though it is becoming increasingly hard to find blackjack tables in a casino with a limit lower than $5. The lower your bet, the less money you risk losing on each hand. The downside, of course, is that you win less money when you win the hand, so it’s a trade-off. If you’re new to the game of blackjack, I recommend playing at the table with the lowest minimum bet and betting that minimum amount on each hand.

The casino’s reason for putting lower limits on the betting is obvious: They make more money when you bet more money. But why are there upper limits? The main reason casinos place upper limits on their games is to thwart the Martingale betting system, where players double their bet after each loss. Players, in theory, could be guaranteed to make money if they had an unlimited bankroll because even if they have  a losing streak, the money they make once they win again would make up for it. Most players who try the Martingale system simply run out of money. For those with a large enough bankroll, though, the upper betting limit does essentially the same thing. It makes it so that the players eventually get to a point where they can no longer double their bet.

If you’re new to blackjack, the upper betting limits don’t matter. After all, betting the minimum is the wisest strategy for you, anyway. I also recommend flat betting, where you bet the same amount on each hand, in which case the upper betting limit doesn’t matter, either.

What it all comes down to is fiscal responsibility. You should never gamble money that you can’t afford to lose. Therefore, before you ever begin playing blackjack you should decide how much money you want to spend and how long you want to play. Based on that information, you should determine how much money you want to bet on each hand and find a table that suits that need.

Bad Alternative Blackjack Strategies

Wednesday, January 6th, 2010

People are always looking for ways to increase their odds in the casino. That’s why there are so many playing strategies out there and for each one, there is someone who knows someone it worked for. This goes for betting strategies and playing strategies. If these strategies are necessary for any game (and they’re usually not), they are definitely not good for blackjack.

The thing is, blackjack already has an accepted strategy that has been shown time and again to be the best way to reduce the house edge. It is the strategy usually referred to as “basic blackjack strategy.” Using this strategy and sticking to it over the long run will reduce the house edge to 0.5%. No other casino game has odds that good. To make matters better, players who can count cards effectively in addition to using basic strategy can actually tip the odds in their favor. For now, though, let’s look at the most popular alternative blackjack strategies and why you should avoid them.

The most common alternative strategy is the “never bust” strategy. This is the ultimate conservative strategy, where the plan is to make sure you never bust, thereby (in theory) increasing your chances of winning. While being conservative is a good idea in many things, it is not when it comes to blackjack. With this strategy, you won’t bust, but you will often have a lower hand total than the dealer.

In the “never bust” strategy, players never hit on a hand of 12 or more. The thinking is that you want to stop on a number where a 10-value card can cause you to bust. The problem is that if you stand on a 12, you’re only going to win if the dealer happens to bust. This conservative strategy of always standing on a 12 or more increases the house edge to approximately 4%.

There is another bad strategy where the player always assumes that the dealer has a 10 in the hole. It seems to make sense, since there are more 10-value cards than cards of any other value. The problem is that, though there are more cards with a value of 10 than with any other value, there are still 9 cards out of 13 that have a value other than 10. That means there is a 69% chance the hole card has a value other than 10. Add to that the fact that if the dealer has an ace up, in most casinos he will peek at his hole card to see if he has a blackjack. If he doesn’t, that means his hole card can’t have a value of 10. This strategy of assuming a 10 in the hole increases the house edge to approximately 10%, way higher than when following basic blackjack strategy.

The other common alternative blackjack strategy is to mimic the dealer. It makes sense, because the dealer usually wins, so it seems like a good idea to do what they do. However, the dealer wins because the rules are set in their favor (i.e. if both of you bust, you lose). Mimicking the dealer means the player would always hit on a 16 or less and stand on a 17 or more. Whether or not they hit a soft 17 depends on the casino rules. In any case, this strategy deprives the player of options that the dealer doesn’t have, such as doubling and splitting. Eliminating those options hurts the player. Playing this strategy increases the house edge to approximately 5.5%.

As you can see by the house edges, basic blackjack strategy (0.5%) has much better odds. Instead of looking for a way to beat the system or an alternative strategy that will beat basic strategy, it is a good idea to memorize basic strategy and use it every time, regardless of any streak you’re on.