Issue 15
December 20 - 27, 2000
Volume 1
page 3

Is It Worth What It Costs to Hedge Your Bets?
by Alan Krigman

Some casino table game players relish opportunities to hedge. That is, to make opposing secondary wagers which -- for a price -- eliminate or reduce risks associated with their primary bets.

Arguably, the most common casino hedge is money on Any Craps to protect the Pass Line during the come-out roll at a dice table. Any Craps pays 7-to-1 if the dice show a two, three, or 12; it loses otherwise. Pass loses on the same numbers, wins on a seven or 11, and moves to the second stage and awaits a decision on the point for anything else. Assume you "protect" $10 on the Pass Line with $2 Any Craps. The good news is that a two, three, or 12 coming-out yields $4 profit rather than $10 loss. The bad news is that a seven or 11 coming-out yields $8 rather than $10 profit, and any other come-out result sacrifices $2 immediately so decisions on the point are ultimately debited by this amount.

Other craps hedges are legion. Some are baroque. For instance, solid citizens may make equal flat wagers on Pass and Don't Pass, then bet the Odds on one or the other side. The theory is to cut the chance of losing on the come-out to one in 36, then risk only the Odds -- where the house has no edge. Another example would be to bet $12 Don't Pass, then place points of six and eight for $12 and other numbers for $10. Now, six and eight break even or gain $2, five and nine always win $2, and four and 10 earn $2 or $6.

Typical roulette hedges offset small bets on multiple individual numbers with bigger bucks on an opposing outside proposition. An illustration might be $1 each on 15 high numbers and $20 on Low. In a single-zero game, this offers 18 ways to net $5 (on a low number), 15 ways to net $1 (on one of the selected high numbers), and four ways to lose $35 (on zero or an uncovered high number).

Blackjack buffs often hedge when they receive naturals and the dealer gets ace-up.Taking insurance guarantees winning 1-to-1, rather than chancing a push against a 1.5-to-1 payoff.

Hedging may or may not pay in any given situation, but particular post-facto results aren't the criteria by which to

judge their value. Instead, realize that in hedging, house edge depends on the sum of the bets while player fortunes hinge on the difference. This essentially raises edge for the action at hand.

I'll put some numbers onto the phenomenon for the roulette hedge mentioned earlier because it's easy to envision. Similar effects occur, to a greater or lesser degree, for other hedges.

Consider 37 statistically-correct spins of a single-zero roulette wheel, betting $35 in all, as indicated. The win will be $5 x 18 = $90 on Low plus $1 x 15 = $15 on the individual numbers, for a total of $105. The overall loss will be $35 x 4 = $140. The house nets $140 - $105 = $35 by virtue of the edge. That's an average commission of $35/37, nearly $0.95 per spin. Players effectively pay $0.95 for a 48.6 percent chance to win $5, a 40.6 percent chance to win $1, and a 10.8 percent chance to lose $35.

Contrast this with betting $35 on Low for the same 37 statistically-correct spins. The win would be $35 x 18 = $630, offset by a loss of $35 x 19 = $665, for a $35 net the casino derives from the edge. That's also an average of $35/37 or just under $0.95 per spin. But now, players have a 48.6 percent chance to win $35 and a 51.4 percent chance to lose $35. The casino's fee is a much smaller fraction of the action.

Hedging always exacts a hidden premium. In the extreme, it can literally be driven to a point of no return -- or worse. Say, equal bets on Pass and Don't Pass with no Odds. Maybe $35 on high and $1 each on all the low numbers. Nobody would be so stupid? Where along the spectrum from no hedge to no possible profit would you draw the line between ignorance and intelligence? As usual, it boils down to personal preference -- hopefully predicated on fact and not fancy. The bettors' bard, Sumner A Ingmark, may have given the best advice by urging:

The price it's worth to buy protection,
Is only known through introspection.

More Gaming Strategy articles by Alan Krigman

Eureka's 12 Days of Christmas Cash!

Eureka Casino, Las Vegas, NV
December 12-24, 2000
Win up to $500 CASH each day!
3 names drawn at 8:15 daily
Call 877-854-7885 for more information

Magnificent 7's Blackjack Progressive
Grand Casino Lacs Onamia, MN
December 1, 2000 thru March 4, 2001
Call 800-626-5825 for more information

Jingle Bell Slot Tournament
Isle of Capri, Biloxi, MS
December 8-24, 2000
Call 800-843-4753 for more information

Football Contest
Golden Eagle Casino, Horton, KS
Thru December 27
Football picks of the week for CASH!
Over $40,000 in CASH prizes
Details at the Casino

$550,000 Holiday Cash Giveaway
Foxwoods Resort Casino, Ledyard, CT
Thru December 29, 2000
Prizes range from $25 to $25,000!
Call 1-800-PLAY-BIG
for more information

Jailhouse Rock Slot Tournament
Colorado Belle Hotel & Casino, Laughlin, NV
January 5-7, 2001
Registration: $350
Call 800-572-3553 for more info S

2001 Slot Odyssey Tournament
Flamingo Hilton , Las Vegas, NV
January 14-17, February 11-14, March 4-7, 2001
$100K in prize money!
Registration: $549
Call 800-225-4882 for more information

No Limit Tournament Series 2001
Turning Stone Hotel & Casino, Verona, NY
January 6 & 20, February 3 & 17, 2001
$200 buy in and $20 entry fee
Call 800-771-7711

Tell us what you think about our newsletter.
Copyright � 2000 Casino City. All rights reserved
Casino City is a trademark of Please read our Disclaimer of Warranty