Although the Kelly Criterion was initially intended for industrial use, gamblers soon realized its potential value for money management. It is best suited for horse racing, but blackjack card counters can also use it.
The Kelly Criterion informs the gambler of the optimal amount to wager in percentage to maximize his capital growth. This is only useful if the gambler has an edge. He may be able to handicap horses better than the public or be an expert at counting cards at blackjack.
Let’s take a look at the Kelly Criterion’s capabilities and limitations. (1) It does not guarantee that you will make profits. If you win, it will increase your profits. (2) However, it doesn’t guarantee that you won’t lose any money. However, it reduces the possibility that you lose all of your money. (3) It won’t help you overcome the casino house edge. It works when there is an advantage for the gambler.
The Kelly Criterion requires you to place larger bets as the size of your bankroll increases and smaller chances if your bankroll shrinks. The Kelly Criterion, in its simplest form, reduces your betting to this: You should place a percentage of the bankroll equal to your edge at the game. The Kelly Criterion is activated when you increase the size of your wager based on the blackjack count swinging in your favor.
Although I promised simplicity, we need to look at the mathematics involved. To size your bets Kelly-style, you need to consider two factors. The first is the odds of winning the wager. This may be 6 to 1 at the track. This would give you six odds. The second step is to determine the probability of winning (expressed in decimal or fraction). Let’s say you expect to win 60% (6.6%) of the time. This will give you the probability of losing (it is one less probability of winning, or 0.4). Divide it by the odds (the 6 in the example). According to Kelly, add the two numbers together to calculate how much of your bankroll you can bet fully.This would equal 0.6 minus 0.4% or 0.53.If you had $1,000 to wager on, your bet would be $530.You will notice that your bankroll would be less if the odds decrease (say, 1 to 1). This is the beauty of the system.
Here is a roulette example. Zero and double zero roulette have 18 winners and 20 losers (black, 0, and 00). You can calculate the Kelly percentage by multiplying 18/38 and 20/38 by one. Since your odds of winning are 1 to 1, this means that you get even money if you win. This math gives you a – 2/38 and – 1/19. You can’t place a negative amount of money, so it is best not to bet.
Oscar’s Grind was born. Legend has it that Oscar, a craps player, devised a progressive betting system to make a small profit to grind out some cash. Although the system does not yield large profits, it can operate at low risk. While you may not win a billion dollars, you will not lose a fortune.
Oscar’s Grind System will earn one unit profit for each series of bets. Start playing by placing one unit. You can win again if you put one unit. If you lose, the series ends, and you remember one unit again. After a loss, you should not increase the amount of your bet. However, every win will increase your chance by 1 unit. If a bet is likely to win and earn more than one unit, decrease your stake. It sounds complicated, but it is not. Let’s look at an illustration to see how it works.
Follow along with me by taking a pen and paper. This is a series of wins, losses, and pass line bets from my craps play at Caesar’s Atlantic. This is not an uncommon sequence. We use Oscar’s Grind to start betting one unit and win. We place another team. We lose the bet, so a new series begins, and we again bet one unit. The bet loses. However, our next bet of 1 unit wins, increasing our chance to 2 units. It loses. We bet three teams on the next bet (each unit losing), and then we lose the stake of two units.
Let’s take a juncture to look at our losses so far in this series.The results were -1-1, 1-1, 2+2, -2–2, -2–2, -2–2, +2, +3, which equates to a loss of 4 units. I’m omitting the first bet because it was impossible to start a series until there was a loss. Follow me. The following results are -4. -4. +4. +5. We now have a loss for three units in the series. Although we will bet six units on our next bet, if we win, the series would have more than one unit profit. So we only bet four units. The bet is successful.
This series is finished. Our one-unit won, so we begin a new series with a one-unit bet. It loses. However, the following two units of bets win. Notice that I cannot bet more than one unit after the first win. This would give me two teams for each series. So I only bet one unit. This works out to two units profit. We have a success of two strings.
Additionally, we won a unit for our first bet before a series began. There was three total. Although it isn’t much, it’s still better than losing. Notice that flat betting with nine wins and nine losses nets precisely zero.
Make sure you keep track of your Oscar’s Grind transactions and record your winnings on paper. Don’t be afraid to go to a casino in a physical location. Take a pen and paper and note everything. Once you have started, you must stick with it. Set limits on the amount of money you would like to win and what you are willing to risk. Please stick to the limits once you have established them.
The Ascot strategy, an old-time method of playing roulette, can be used on even bets. The roulette table offers even money with odds/evens 1 through 18, 19 through 36, as well as red/black. These are bets that pay one to one. You can also use the Ascot system for other casino games with even money wagers such as pass/don’t pass at craps and banker/player in baccarat.
You will need to create an Ascot system by writing down a series number. It doesn’t matter how many numbers you choose, and it is easier to pick odd numbers.You could use 2, 3, 5, 8, 13, 20, 30, etc.Your even money bet would be on the middle number of the series. Your first bet in this example would be eight units. If you win, move up one step to the next series bet. If you lose, go down one step to your next bet. If you have won or lost the most series points, the series will be ended, and you can start again. It’s as easy as that.
This will allow you to bet for long periods while only having a small amount of money. If you lose, you will have to reduce your stakes significantly. As an example, you could lose at 20, win 13 times, lose 20 times, and so on. It is not a guaranteed way to profitability.
Below is a list of wins and losses that I experienced playing mini-baccarat at Caesar’s Atlantic City. Calculate whether I made earnings or a loss using the Ascot betting schedule. (The answer’s below.)The same set of results can be used to evaluate any Ascot series you choose.
In the high-stakes world of gambling, the mind dances with numbers, chance, and luck. Betting systems, like the Kelly Criterion, Oscar’s Grind, and the Ascot strategy, aren’t merely mathematical formulas; they tango with our emotions.
Think about the Kelly Criterion. It’s not just a calculator; it’s a mentor. It whispers to gamblers, nudging them down the path of discipline, beckoning them to refine their craft. “Have an edge,” it says, subtly advocating a cautious approach by adjusting bets to bankroll size. It’s a wise elder in the gambling village.
Then there’s Oscar’s Grind, the embodiment of the fable “The Tortoise and the Hare”. It’s a story of patience, resilience, and the art of grinding. Big wins? They’re dazzling, sure. But Oscar teaches that the real game is in the steady, relentless pursuit of profit, however modest.
And the Ascot strategy? It brings order to chaos. Picture a ship captain charting a course through stormy seas. The Ascot offers a sequence, a rhythm, a lifeline amidst the wild unpredictability of gambling waters. By sticking to a series, it shelters players from their own whims and emotions.
But wait. No strategy is the Holy Grail. They guide, but they don’t promise. Banking on them too heavily? That’s a slippery slope to overconfidence—a gambler’s Achilles’ heel. And let’s not forget those cunning casinos, always lurking in the shadows, aware of these strategies and ready to counteract them. Their goal? Simple: Stay profitable.
To wrap this up, let’s zoom out. Betting systems, whether it’s Kelly, Oscar, or Ascot, aren’t just algorithms. They’re lifelines, psychological anchors in a sea roiling with risk and reward. They’re essential, sure, but only part of the toolkit. Wisdom, self-awareness, and understanding the game? Those are the real aces in the deck. So, bet smart, play hard, and always listen to your inner gambler.
