Early Retirement Extreme Forums

Someone I knew once came up with a strategy to consistently win on horse races. He kept meticolous records demonstrating that he kept turning a profit. After about six months though, he started losing more than he betted, so he had to stop.
I play for fun, so I don't bet. Seems like you would lose a lot of money building up your skill? Unless you practised by playing games for no money?

The best site I've come across for learning how to gamble is this:

http://wizardofodds.com/
He doesn't seem to be trying to sell anything. The author is an actuary who analyzes casino games and consults with game makers and casinos. Okay, he does offer a <$15 book, but you have to look for it, and I can't imagine it offers much more than one can gain by reading the site.
His strategies have been very useful to me-- basically I've learned how to lose money very slowly in a casino, and if I stop at the right moment, I often leave with a modest gain. There are some entertaining opinions presented on betting systems, particularly the popular "Martingale" system-- a classic example of fool's logic (ironically similar to saving by spending).
After a modest amount of research, I decided to stick to two games: blackjack and video poker. First, I stick with two games because if you don't execute the strategy perfectly the odds tilt dramatically out of your favor, thus you really have to master the game. You also have to maintain this perfect execution for at least a few hours. Second, both of these games seem to have relatively few external variables-- I don't have to worry about playing against a superior human gambler, or worry about having a good/bad shooter. Also, with video poker I don't have to tip a dealer, and when I screw up no one knows but me.
Strangely, as I learned more about how to play these games, I found it less fun: winning big is just an event that has a small probability of occurring.

Sports gambling seems to be a bit of a different beast. If you assume that the games aren't fixed or rigged (which isn't always true), then your task is very well defined: be better than the guys in Vegas at predicting the outcome of a specific sporting event. Essentially, it's a guessing game you play against a human opponent.

Sorry, I just had to post when I saw this thread to clear a few things up. Unfortunately, there are a lot of misconceptions when it comes to gambling out there, as everyone tends to view their (extremely) small sample size as gospel, when in reality, people who are making losing bets can win (and delude themselves into thinking they are winners) for a long time before the long-run catches up with them and vice-versa (winners can lose for a long time before they start winning).
To try and prevent this post from becoming it's own book, I will try to keep it fairly short. If I miss any type of game or anyone has any questions I would be glad to expand, but a little about me, I have worked on and off as both a computer programmer and professional gambler for the last 10+ years. I have been switching between the two as I get bored with one I focus on the other for awhile. Now that I found this site I am focused on building a sustainable dividend portfolio that I should be able to live off of forever, but unfortunately for me, I am not extreme enough so that is probably 10-15 years away.
Anyways, here goes:
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PART 1: Casino games you can WIN at:

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1. Poker: Poker has one of the best combinations of skill and luck -- by that I mean, the losers (fish) get lucky enough, often enough that they keep coming back. It's not a game like Magic the Gathering where the losers will realize they are out-matched and give up rather quickly. This will keep them coming back with more and more money for the sharks to win, although the sharks lose often enough too that it is by no means smooth-sailing. The swings (as is true in all forms of gambling) can be absolutely atrocious, and will take their toll on even the best of players. If you do not have a proper bankroll and manage it correctly you will go broke at some point (this is another topic that I could write a book about).
The casino still makes money at poker because they will take a little bit of money out of every pot or tournament entry (the rake), so based on that alone there will be more losers than winners at poker, your skill needs to be good enough to not just beat the other players, but overcome the rake as well. As mentioned earlier in this thread forumserver.twoplustwo.com is a good site for learning more about poker. People can make a living at poker playing both online and/or live.
2. Blackjack. If only I knew what I knew now but was born 30 years earlier.... (but then again, I would not want to be old right now, LOL)...
Blackjack has a very small house edge (around 1%) when playing what is known as basic strategy -- this is a chart that tells you how you should play every hand based on what your hand is and what the dealers upcard is. As mentioned previously in this thread, www.wizardofodds.com is a great site for calculating odds, not just for blackjack but every form of gambling.
The way to beat blackjack is by counting cards. There are a lot of card counting systems out there, but one of the most popular is the blackjack hi-lo system, as it is one of the easiest (and effective) strategies out there. Counting takes practice but is not nearly as hard as the media or hollywood makes it out to be. You don't need to be rainman and keep track of every card -- you are basically just keeping track off if there is an imbalance of ten's (Ten, Jack, Queen, King, Ace) left in the deck or not and raising/lowering your bets accordingly. The more tens left in the deck the better your edge.
By counting cards you can gain an edge against the casino -- I'd estimate it around 2-3% although you need to be careful, as unlike poker, when you win at blackjack you are taking the casino's money, not other player's money, and the casino does not like that. If you bet too much (or win too much) the casino will give you heat. Again, this is not like Hollywood makes it out to be. You won't get beat up or anything, but they can ban you from their property and you will be charged with trespassing if you come back again. So it becomes a game of cat and mouse (or hit and run) where you try to win as much as you can without setting off any alarms. So while you obviously want to win as much as you can, you cannot get to greedy (and even have to make the wrong play every now and then as cover), to assure that you will still be able to find a casino that is willing to deal to you tomorrow.
3. Video Poker: Although beatable video poker machines are becoming less and less common, similar to blackjack, every combination of cards you are dealt has an ideal strategy. Video poker machines are truly random -- by that I mean all 52 cards in the deck have an equal chance of coming up (well as random as you can get with computer programming -- again another topic), it is not like slot machines that are rigged, so this comes down to a game based purely on math, and your exact expected rate of return can be calculated on the spot by looking at the payout table (for example -- some machines pay 8:1 for a full house, while others pay 9:1, even though the chances of getting a full house are exactly the same on each machine -- obviously, you want to play on the machines that pay 9:1). The best video poker machines are called "full-pay" machines.
4. Sports betting. You need to win about 55% of your sports bets to break even, as the house takes about and extra 10% when you lose. The best sports betters win around 60%. Sometimes you can find arbitrage situations between different casinos where you can bet different sides/spreads and guaranteed yourself a profit -- but these opportunities are not nearly as good as the once were. This basically comes down to your handicapping ability. Note that Las Vegas pays the top handicappers (that they know of) a lot of money to set these lines. The chances that you are smarter than them is slim. However, they also take public perception into consideration so sometimes the true line (what they think it should be) is not the same as the line they post to the public. The casino's goal is to to get 50-50 action on each side of the bet to guarantee a profit -- as funny as it sounds -- the casino's are not in the business of gambling. If you are good enough at handicapping against the point spread you can put your money where your mouth is and hopefully come out ahead. Be prepared for lots of last second plays that cost you a lot of money.
5. Horse/Dog racing: I'll keep this short since I don't know much about it, and the house takes a large cut (often around 25%) that might just be too much to overcome. However, all players bets are pooled together before the house takes their cut, so like poker, when you win, you are actually winning other player's money not the houses (again, the casino is not in the business of gambling), but unlike poker the house is taking a much bigger cut here that is much harder to overcome.
In theory, if you really get to know the horses/dogs involved in each race, and study them, and watch them train etc... in theory you can get an edge. I'd say this is the hardest method to making a living, but also the one I know the least about it. Maybe you can include Nascar or something. I know nothing about that and probably won't soon either. Good luck if you venture down this road and I would be interested in hearing any of your stories.
6. Others??? Can't think of any right now but it is late. I will update if I think of any or anyone else brings one to my attention.
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PART 2: Casino games you WILL LOSE at:

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1. Slot machines: These are computer programs designed to take an exact percentage of your money. In the long-run, you will lose exactly this percentage to the casino. It varies from machine to machine, and casino to casino, but you can expect to lose anywhere from 1%-20%+ of your money when playing slots. The best slots are in areas like Las Vegas where competition forces them to give more money back to the winners, but even there you will lose everything you have if you play them long enough. The city was not built on winners.
2. Roulette. Every single bet at Roulette, whether it pays 1:1 (Red/Black) or 35:1 (a single number) or anything in between has the exact same house edge: around 6% (I would need to look up the exact number). This game is absolutely unbeatable, and no matter what you think you come up with for a betting strategy, you will lose the same exact amount of money (on average, 6% of what you bet over the long-run).

Unfortunately, if you are new to roulette and think I am wrong, well, you are just going to have to learn the hard way.
3. All other table games (except craps see below) and Bingo/Keno:
These games aren't beatable either. Go to wizardofodds.com for exact odds if you are curious for a specific game. Also, any new games that are invented have statisticians doing studies to make sure the casino never creates another game that is beatable (like blackjack). It is best to just avoid them.
4. Did I leave anything out? I don't play losing games so there is probably a lot out there that I just ignore.
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Part 3: Games that *MIGHT* be beatable:

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1. Craps: I am hesitant to put this here as I don't want to mislead anyone. This probably should belong in the losers section. However, when limiting your bets to just the pass line (or don't pass line) plus taking odds, the house edge is so small that, in theory, you could beat the game by dice setting. By this, I do not mean cheating. By this, I mean picking up the dice in the exact same way (the casino allows you to do this) and then throwing them the exact same way every single time. In theory, if you did this, you should be able to have certain numbers come up more often than others to offset the small house edge. This is something I am interested in learning more about but do not have any knowledge to pass on. Sorry. Unless you can create a statistically sound study in your basement, I would not suggest trying to win money with this method.
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Random Notes:

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One thing to note on all of these games (mainly the winning ones or slightly negative ones) is that once you include comps, that can add significantly to your profit margin, or at least make your vacations "free" in that your hotel/airfare/food/beverage can all be included as long as you put in enough play, and if you figure out the math -- you are breaking even or coming out ahead. Obviously comps while you are playing a game you win at is just gravy. But comps can turn a slightly negative game (such as craps or a slightly negative video poker machine) into an overall positive gain if you include the comp value -- but obviously do not rely on comps, just count them as a bonus when you get them. As far as comps go (in winning games), video poker would be your best bet, followed by blackjack. Poker and sports betting are minimal at best. In the losing games, you can expect around 25-30% of your expected loss to be comped back to you, so you won't be able to come out ahead here -- except in rare situations where you are playing better than the average player (such as on a slightly losing video poker machine) where the casino comps you at the rate the average player loses at while you play better than the average player. You can also sometimes increase your comps in games like blackjack by doing tricks like sneaking chips off the table (then buying back in with cash) to make it look like you are losing more than you really are, or by betting more when the pit boss is watching and less when he is not so they think you are more of a high roller, but as surveillance/computers are greatly improving (and getting scary-good) these tricks are quickly becoming a thing of the past.
Also one last word of warning, while this might seem appealing, it is not an easy life. The saying that poker (or any form of gambling) is a great part-time job but a terrible full-time job is completely true for 99%+ of the population. It stops being fun and becomes work real quick -- and once most people reach that point they would rather have a regular job+benefits again. However, as a side-income/hobby it definitely beats most part-time jobs out there.
Also one more thing I did not discuss is progressive jackpots. In theory you could play slot machines once the progressive jackpot reaches a certain point and make money -- but since you do not know the exact odds this is tough to figure out. In Video Poker with progressive jackpots you can figure out the exact odds on the spot and start playing when the machine will be profitable.
The best thing about gambling is that you can figure out almost everything with math and/or statistics. It's a beautiful thing. If you think you can win but the math says you cannot, then guess what, the math is right and you are wrong.
A gamblers anonymous/degenerate warning: If you won money the first time you were in a casino, you are at a much higher risk of becoming addicted. I do not know the exact psychology behind this, but basically, you went into an environment where you were supposed to lose and you defied the odds and won and came out a hero. You now think you are Rainman even though a good percentage of gamblers will win their first time (or even first few times) based purely on luck. Unfortunately, this can easily go to your head if you are not careful. Keep things in perspective and do the math.
Sorry if I got too long-winded in this post!

That was very interesting. Now I know why I like MTG and why I don't like poker
What about bridge or whist?

Sorry, I have never learned bridge (but it is on my list) and have never heard of whist. I'll look that up now.

@Josh, that was a great post, and seems very consistent with what I have learned from research and practice.
I've spent a good deal of time learning video poker, and at one point made a habit of playing 100 hands each day and analyzing my play for strategy errors. It's actually pretty rare for me to play more than 300 hands perfectly, thus I realize that the house advantage will break me if I play long enough. In terms of comps, if I factor in the free drinks, and have an attentive wait staff, and also factor in the tipping-- well it does seem that I am getting a pretty big discount on my drinking in Vegas by playing video poker.
On the other hand, the more attentive the wait staff, the quicker I have to stop playing. I haven't spent any time analyzing my error rate while drinking, but I assume it goes up.

I know some professional gamblers (I went to MIT...) and this is all consistent with my impressions. Nice post, Josh!
Bridge is more like MTG, I think. Especially tournament duplicate bridge where even the randomness of the deal is controlled by having players compete with the exact same deals.

One more thumbs up on Josh's post.
To add to the craps section, I've known people who have the dice rolling skills. There's no reason for one to practice that skill unless you want to pick up the talent since all you really need to do is identify the shooter who has the skill.

I'm a farm kid married to a musician. That's about all the risk I can handle without pulling out my hair.

One of my projects on hold for ERE is building a poker bot, never managed to take is very far besides the concept stage LOL.

I have a friend who is a world class bridge player and played professionally. It seems that very wealthy ceo's are willing to pay people to join their team. I think he made decent money at it but bridge appears to be a game with an extremely long learning curve.
The nice thing about it appears that there is no negative expectation as with many casino games, and you can't get banned for winning like blackjack.

I have known people who won some serious money playing the lottery, so I will bet (pun intended) that I will hear a lot of positive stories regarding strategy gambling.
Has anyone here actually won serious money after they put their entire gambling career on the scale?
Money that either set them for retirement or provides consistent returns over time so that they do not need a real job?
My experience is that massive winning is usually followed by massive losing and vise versa. I know people who have won several thousand but then lose it all in another trip. I also witness many people forget how much they lose. Most friends I know (myself included) end up negative the longer time goes on relating to how long they were serious gamblers.
P.S. I also think Josh's post was great

Thanks everyone for the compliments on my post -- I was actually expecting a lot of negativity in response!
@Jacob -- I only got through the wiki page on whist -- sounds interesting but did not pique my interest enough to focus on it long-term, at least not right now. If you want to try to convince me otherwise I am all ears though.
@Mo -- if you practice enough it will all become second nature to you -- assuming you limit yourself to just one or two variations (such as deuces wild and/or jacks or better) they can be mastered without too much effort. I agree drinking could cause a few mistakes, but the strategy should become so in-grained in your head that you always know what to do without even blinking. It sounds like you do this more casually for fun (and there is nothing wrong with that) but if you are serious about improving I think you have the right mind-set. Focusing on practicing/improving until your execution becomes nearly flawless is key. Regardless, you are playing a game with a small house edge (much, much better than slot machines, even if you are making mistakes). Then again, if your practice enough it can stop being fun too. Finding the right balance between entertainment vs. profitability is different for everyone.
@akratic -- It is an interesting subject. For the most part, the smartest people are attracted to games where their intellectual superiority allows them to win every time. However, financially speaking, this will limit their profits as if they win every time they will quickly run out of challengers. People are willing to pay for entertainment/fun (even if they lose overall at poker for example) but they are not willing to pay to get killed 100 times in a row at Chess for example. If instead, the "shark" purposely lost around 40% of the chess games and treated it more as cat & mouse, they could probably win a lot more, but most people do not play games like chess for that reason, so I think one needs to decide: Am I trying to figure out who is more intelligent or am I trying maximize my profits. Those are somewhat mutually exclusive.
@ George -- I would tend to agree with you, but the tricky part is how do you know what shooters know what they are doing and which ones just try to look like they know what they are doing? Unless you personally already know shooters that have the skill, I do not think you can just join a random craps table and identify these individuals on the spot.
@hickchick -- I don't know any musicians but as a gambler I view musicians/artists as way more risky and/or flaky than gamblers who know what they are doing. That being said do not confuse the term "gambler" with "successful gambler" as I am sure there are a lot more successful musicians than gamblers out there. Also, I know very few musicians so I could be way off base here. If you can make it as a musician I agree it is great and kudos to your husband, it is almost definitely a more enjoyable and fulfilling life overall, as long as it is your true passion and food/shelter never becomes an issue.
@Don -- I have long dreamed of building a poker bot too, after all, what better way than to have robots make money for you while you do whatever you want??? However, do realize that they are not allowed by any popular site and you will be banned and have your money confiscated if they catch you running one.
@photoguy -- interesting I have never heard of that. Maybe I should look into Bridge a little more.
@The Dude -- I agree with your post, most people who you hear about winning, or try to make themselves appear as winners are in fact losers over the long-run. However, you can indeed make serious money gambling, consistently, year after year, and set yourself up for retirement just like any other job out there. However, most gamblers do not think this way, and their spending will usually rise and fall based on their recent results. People who treat it like a business (and win enough that they claim it as income on their taxes each year) are the only ones I would listen to advice-wise. I'm not saying anyone can get just go out and get filthy rich by gambling, but it is entirely possible to reach the median-income level (or above) if you are willing to put in the time to learn how to do things the right way -- by this I mean everything from learning how play games good enough to beat them, to managing your bankroll properly to ensure you can sustain the inevitable losing streaks without going broke. However, this also requires a lot more effort and discipline than the average, median-wage job. One of the biggest benefits of being a professional gambler is it gives you the ultimate flexibility in your life job-wise -- You really do not have to answer to anyone ever, you set your own hours, locations, etc..., but that can easily be mis-managed or squandered away if you are not careful as well.

Josh, I like your style. You need to post more.
Do you happen to know a lot about investing? Or real estate investing in particular?
Are you pursuing ERE? How's it going?
(in another thread, of course)

Q, please don't take this the wrong way, but a lot of the things you've said are wrong or misleading.
Craps, Blackjack, and Poker are skill games (craps more on betting skill and keeping track of odds...which sometimes is not a good thing).
I feel the definition of "skill" needs to be cleared up. There are two aspects to your results from gambling, skill and luck. However, just because there is skill involved in a game does not necessarily make it a good profit opportunity. The only skill in craps that can make it profitable is dice setting, which is very very difficult, and takes a really large amount of practice.
Roulette is pure luck, but hedged luck. Maybe roulette can be like stock pick spreads. You can get paid well betting $5 on 20 numbers, since hitting 1 number is 35:1.
I guess you never suggested that this is a good thing to do. To be clear, this is a terrible thing to do. AFAIK there is no (legal) way to beat Roulette.
Tested a different BJ system yesterday on a spontaneous 1st time trip to Cache Creek. It worked, making me pretty happy (and a lil richer), further adding to this route.

I could be very wrong, and apologize if this is the case, but unless your system involved card counting, hole carding, ace sequencing, or any other computer simulated tactic like that then it was probably not a good thing to do. You say it worked but short term results really tell you nothing about whether it was a good thing to do or not. (Again, you didn't make that claim, but I just want to be clear)
To address Craps - craps has a similar system to BJ for betting, and I concur with dice shooters affecting the game. That's why pro's wait a few rolls before amping up their bets on the different areas of play. Last nite, one guy was rolling for an hour, but, the Cali system is a little different than Vegas for dice (sadly)
Unless they are actually dice setting (which virtually nobody can do) then the shooters have no impact on the game, they're throwing random numbers. People who wait to see what a shooter is like before amping their bets are deluding themselves and losing a lot of money to the casino in the long run.
It is actually very good and interesting that in california craps is different to Vegas. In some Cali casinos they actually deal cards out of a shoe (because only card games are legal). This is way better than regular craps with dice because it presents an interesting opportunity... I'll leave it to people to guess what that might be
Craps I am still trying to get it all down. Not an expert...it all depends on the shooter and the point. Most systems I've read stay on the field and away from the hard bets. In practice, it works.
There are books and webpages that espouse such "systems", please do not try any of them, there are all terrible and WILL lose you money in the long run. All that matters is that the game (unless you're dice setting) is negative expectation, there is no way to get around that fact. Every bet you place is negative expectation and therefore your total expectation for your strategy is also negative.
I should also I guess mention Baccarat is a stellar game as well.
Baccarat is a horrible game. It is technically marginally countable but your expected win per hour is minute and not worth the effort. If you're not counting it, you will be losing money.

Oh! I really should also mention the most important thing to know for people who are going to gamble for fun and enjoy the odd adult beverage or two:
You can print out a blackjack basic strategy chart and have it with you at the table. If you play a $10 table with reasonable rules (the most important being that you only play tables where BJ pays 3:2 NOT 6:5) then your expected loss per hour is only ~0.5% * $10 * 60 hands per hour = $3 per hour. While you are playing you get comped drinks. If you play at one of the better casinos ie the Wynn, Encore, Venetian, Palazzo, Aria, they will comp you top shelf alcohol. You really should tip the waitress $1/drink and you can probably get 3-4 drinks per hour. So you're effectively paying $7-$8 to gamble for an hour and get 3-4 top shelf drinks... WAY better than you could do at any bar.

Let me get this straight. You can sit at the table, with the dealer, and having manual/cheat sheet next to you on the table and nobody minds? So in principle, could you even bring a pocket computer?

@Jacob, at some of the low-roller beginner type tables you sometimes don't even need the cheat sheet-- you can ask the dealer what you "should" do. I have done this before. The dealer could be wrong, but so could you, or your sheet. I've tested this out by asking in scenarios that I already know the correct play, and my impression is that the dealer will give correct advice more often than not.
I doubt too many serious tables would allow notes or computers.

I've never heard of not being allowed a basic strategy sheet at a table. They won't let you have anything more than that. You can't have your sheet and a pen, for instance.
If you're playing basic strategy then the casino is still making money so they don't mind. It's just not quite as much money as they might otherwise be making. Also, people very often have the wrong cheat sheets and so are losing money faster than they should be. I recommend (as Josh did) the wizardofodds.com site where you can get the correct strategy for the game you're playing.