Aug 30
by Don

It has been some time since we have had an installment of hedge economics, so let’s correct that shall we? 

I think that it bears repeating that the over goal of the approach is to maximize your winning potential while minimizing your exposure; i.e. your bankroll!  So if you don’t play at a 6-8 deck manual shuffle table with about 2-3 other players all playing proper Blackjack, your expected positive return will be diminish. But you know all that, so now what?

When I tell people about the mechanics of hedge economics I get a wide range of looks from puzzled, to intrigued, to crazy enthusiasm.  Whatever the case may be, I almost always get the, “does it actually work?”  Well let’s look at the last four sessions that I had while in Vegas as a case study.

The first place that I sat down was Paris.  There was a nice mix of people and I settled down at first base with 3 other people at the start of a new shoe.  I started with $400 in chips and a $30 min bet.  I do this mainly because I like to be able to hedge up to $50 after a win and not be basically “stacking” my bet without pulling something back.  I talk in detail about this in the first post on hedge economics, so I won’t go over all of the reasons why, but the main increments of hedging after wins is a green $25 chip, or quarter.

The play was crisp and I got a lot of double down opportunities and got on a nice roll towards the later 3rd of the shoe.  At the height of the run I was at around $1150.  Normally this would have been a good place to stop, but I was having a good time and just decided to ride out the rest of the shoe.  There were some more up and downs for the rest of the ride, but as the dust settled I got up from the table with $1047.  Not bad for the first run.

The next day I sat down at $25 table at Caesar’s with $400 and hopes of another little run.  I like playing at the main pit because they offer the best possible players odds and generally most people down there play straight.  So after about an hour and a half of nothing great there was a nasty little run of about 6 or so straight losses and bang I am tapped out.

That’s not unusual mainly because if you do everything right you are happy with about a 50/50 chance of winning.  The key is to really get the most out of the times that you are winning, and either minimize your losses or elongate your play.

Well I am not one to be deterred, so I sidled up to another table later that night and bought in again for $400.  Unfortunately for the home team the results weren’t that great.  I liked my tablemates, but 3rd base left and was replaced by this woman who was playing scared.  She announces after the 2nd time I watch her not take a card with 16 versus a dealer 10 card that she never hits 16.  I look at her and then look at my chips knowing that they will all be in the dealers rack before too long.  I was right and well I have no one to blame but myself.  I should have just gotten up, but I decided to roll with it.  Well “it” cost me my buy in.

So at this point I am down and don’t have much to say for myself other than I just need to find the right table.  And that table came late at Paris.  There was 5 people already seated and the dealer was shuffling so I said what the heck and I sat down with my usual $400.

Since it was late, Lori decided just to watch me as I had told her that I was only going to play a little bit and then we could go to bed.  She normally plays herself, but wanted to show me a little support.  How nice.

Well this shoe was hot from the jump.  I win the first 12 hands and frankly could have won even more if the guy on my left would have hit that soft 17 like he should have.  It was equally tough in that I had about $250 out there and a 20 in the hole so my stomach sank a little when the dealer turned a 6 card 21.  Dems the breaks as they say.

I decide to continue the ride it out and almost immediately got on another roll.  I won another 7-8 hands in a row and really had some nice BJ sprinkled in there and looked at my stack and decided just to cash out.  I didn’t even play an entire shoe and I cashed out with $1205 after tips and what not.

So what’s the bottom line?  I think that these 4 consecutive runs capture the essence of what happens on average in that when you lose you only lose what you are willing to wager (in my case I wagered my entire buy in each time) and when you win you can really max it out.  Now it’s important to note that you have to understand that when you are on a great run and then you have a couple of losses of your min. bet you have an opportunity to reassess and take your winnings off the table.  When you are on a negative run you don’t necessarily have to risk your total buy in, but you won’t lose more than you put out there.  These two points are equally important as you don’t want to sit at a table too long when you have won a bunch because you don’t want to give it all back, and you certainly don’t have to stick around to get your head kicked in if you are running bad either.

Just remember to always be getting on that roller coaster on the way up and don’t be afraid to get off before the point that everyone starts screaming!

May 19
by Don

By the title of this post one would assume that I am actually a winning blackjack player and I can honestly tell you that I am not.  What I am is a guy who can extend my play and occasionally pull a nice hunk of change off of the table.  Blackjack is a game of ebbs and flows.  The crucial element is to know when to get your winnings off the table when you can.

The reality is, to be a truly profitable blackjack player you have to either be a card counter or not play at all.  Since we are not trying to get thrown out of a casino, let’s assume that you are not going to count cards and you will in fact belly up to the table and plunk down your hard earned cash.  Trust me, it’s even more fun when you know what you are doing!

To start, I am going to assume that you know basic strategy.  If you don’t, or need a quick refresher, you can go to this site that lays out everything you need to know to get you to the point for which we can start talking.

So let’s get started.

In order to understand the nature of this game you have to think about it as a 50/50 proposition.  If you play basic strategy you will have a great opportunity to win the individual outcome or hand.  Now just like a coin toss, sometimes you are going to win and sometimes you are going to lose.  But within a session there are streaks, and it’s those streaks that you have to exploit.

Before I get too far along I want to set the circumstances for which you should be playing.  You need to find a table that is the highest limit that you are comfortable with.  Meaning, if you can afford to sit down at a table with $300 or $400 then you can play at a $25 level (or $50 if you are frisky).  The reason for this will be explained later.  You must also try and find a table that has a manual dealer shoe.  It should look something like this:


This is key because you will need the break in the action.  Blackjack is a very fast game and when it’s going bad you will be thanking the gambling Gods when the dealer has to yell back to the Pit Boss, “shuffle check!”  It’s also important because basic strategy assumes a certain amount of decks (of cards) in the shoe.  If you are playing on a table with an automatic shuffler, things are constantly changing.  So consequently the times that the cards are favoring the players are often greatly diminished.  Plus there are other theories on that, but I won’t get into them right now.  Just look for a table with a shoe and you are in.

So now you have a table and some people who look like they know what they are doing and you are ready to play.  As I said before, this game is a streaky one and you have to ride the good streaks and get off when it’s going bad. And that brings me to the heart of the strategy: betting.

The key to Blackjack is the betting; more to the point hedging your bet. I can not stress this enough.  You have to be able to take your winnings and constantly push up your bet for the next hand.  Not everything, but a good amount because when you are on a roll you want to maximize your output.  When you are losing you are only ever losing the table minimum.  This is why you must find the table and limit that you are comfortable with.  Let me illustrate.

You sit down at a $25 table with $400.  (The $25 limit is a pivotal one because that is the level when the Casinos actually start to pay attention to your play.  I will elaborate on that in another post, just know that getting rated is a very good thing.)

Your first bet is $30, I know you are saying that you want to bet the min, but trust me on this one $30 is the bet.  Now something crazy happens and you win.  Awesome, congratulations!  You are a winner!  Now the dealer is going to pay you $30 right next to the $30 you just bet.  Great. So for your next bet you put $50 out in the circle. At this point you have pulled $10 of profit off of the table. Here it is broken down:

$400 – $30 = $370 at the start of the first hand.

$30+$30+ 370 = $430 after winning that first hand.

$430- $50 (second bet)= $380 at the start of the second hand.

Things are now cooking and you win the next hand. Now you win $50 and that is paid out right next to your $50 bet.  The next hand out, you increase your bet to $75.  Now you have completely covered your initial exposure of $30 (your original bet) and a total profit of $5.  But wait, you still have that $75 bet for the next hand.  If you win that next hand you are really playing with the house money!  That is pure profit and all sorts of great things happen at this point.  You keep this pattern going until you get to $125; at that point you increase your bet at $50 per consecutive win.  When you get to $250 then you can increase your bet by $75 or $100 (a “check”) until the cows come home!

It’s important to understand that at any time you lose you take you bet down to the minimum of $30.  There will be a large temptation to put a big bet up there after you have lost a hand where you had $150 bet, but don’t.  You are throwing your profits away because just as quickly as you can win 5,8,10 hands in a row you can certainly lose that many.  So the key is to only lose a small amount when you are losing and win as much as you can when you are winning.

So many times I have been playing with people who always bet the minimum and never increase their bet.  They will win 10 hands in a row and actually end up losing all of their money because they will just keep playing and playing and eventually lose it all back to the casino.  The game is basically a coin flip, so when you are on the plus side, you really need to be taking advantage of the situation.

This brings me back to the importance of that dealer shoe.  You need that chance to actually win.  You need the opportunity to have that break in the action and reassess.  When you have made a good profit you should leave.  There are so many blackjack tables in Vegas that there is no reason to be married to any one table.  If you have been taking a beating, maybe it’s a good time to grab a snack or something.  Move to a new location and start again.  This game is like a wave; you always want to get out when you are going up and don’t stay too long or it will all come crashing down.

This is obviously going to be a multi-installment post.  More on this to come.