Edge: Finding and Defining

by admin on / Uncategorized

If you want to skip all this information about the intricacies of gambling advantages and edges and just want to try a game that has the built in player edge of giving you free realistic chances to win without any investment of your own, Predictpicks.com (You need an invite code for this; feel free to use mine: 011255) It is a very fun game where you just predict whether some athletes’ production for that night’s game will be more or less than the amount projected by the site.  If you get them all right then you win.  This is an automatic edge because with a chance of winning, and 0 chance of losing your own money, your chances of winning are infinitely greater than your chances of losing and thus in a very real way, you have the edge in this opportunity immediately and easily. If you do want to learn about this subject then read on:

I’m sure you’ve heard the saying “the house always wins” referring to gambling establishments and how the games are skewed unevenly towards their having the mathematical advantage, thus rendering them winners in the long term. Even if some chances or odds of some games are close to 50/50 (% chance to lose/ % chance to win) but just tilted a little bit so that it’s really in actuality 52/48 or 51/49, over enough iterations of the game being played, it will always eventually come out in favor of the party with the edge or advantage. So even if it seems like you win close to half the time, if you continue to play this game then you’re going to lose. Edge or expected value can be calculated and expressed by this formula: chance to win times amount that would be profited plus chance to lose times amount that would be profited (so if you would not win and just lose the amount you bet, it would be negative the amount bet) . The trick is trying to find where, how or when you can reduce this house edge (to have a better chance at getting lucky and profiting) or to better yet, play the game in a way or at a time when the edge is in your favor instead of the house.
In roulette there are 36 numbers (18 black, 18 red) and 1 or 2 green 0s. In this example, it will be a wheel with 2 0s. So if you put a $1 bet on black, the payout they offer if doubling your dollar profiting you $1. But to do this expected value or edge calculation to see if playing this game would win or lose you money over time it would be: (18/38 * 1) + (20/38 * -1) which equals -2/38 or -5.26% . Since it is negative (as we could’ve discerned by just seeing that there are more ways to lose this bet (20) than ways to win it (18) (because it pays out in a way that would be fair for a game where you had a 50% chance to win)) the house has this edge of 5.26%. So you can take the number of times played multiplied by the amount wagered each attempt and multiply it by the edge -5.26% or 0.0526. and after 10 rounds (10*1*0.0526) you can be expected to have lost $.53 . (rounded up from $.526) most of the time and after 1000 rounds of this bet size for this game you can be expected to have lost $53 from these $1 bets most of the time (though it will rarely if ever come out to these exact figures precisely.)  Or if desired, you can just take the implied probability(explained in the next paragraph) of this bet which doubles your money if won, which would be 50% and then calculate your chance to win which is 18/38 which is 47.37% and compare the two figures (50%-47.37% = 2.62 which represents your half of how unfair it is and then the other half is the casino enjoying that same difference but the other way . So if you multiply that 2.62 by 2, you get that expected value or edge calculated above of about 5.26%.) to learn that you are not playing a game that is fair to you and that the more you play, the more you are likely to lose.  Or you could use that to come to the conclusion that this game is closer to being fair than things like slots or kino in most cases and choose to have your fun there.

So given the inherent probability of the game based on how likely an event that would trigger a payout is to occur, based on all the influencing factors, if the payout is more than it should be based on this percentage of likelihood, then the player has the advantage. If the payout is less than it should be, the game is unfair and the house or opponent has the edge, and you will lose this game over time if you continue to play it. Here are some examples of sites where you can find the formulas or a calculator for figuring out the implied probability based on the odds that the oddsmaker or house pays out. For decimal odds it would be (1/ decimal odds) * 100 = implied probability. This number is basically the house or linesmakers’ saying what they think the chance to win is and if you know, learn or accurately estimate the chance of something happening to be higher than what the payout odds’ implied probability is, then this is an example of gaining the edge.

In games like sports betting, even with a good system or model, there are always numerous and unknowable factors and prevent one from knowing the exact true odds or probability of occurrence. So besides having a wealth of sports information that allows you have enough information to find the incorrect odds and exploit them by placing corresponding bets, an example of a way you could gain an edge in sports betting is called arbitrage or betting both sides of the same (usually 2-possible outcome) game at different sportsbooks which offer different odds to guarantee the win and a profit regardless of the game’s outcome. But beware that while there are software and tools to help you find these arbitrage opportunities, there are also hidden pitfalls and dangers including things like the book not honoring your bet because they say their offering very different odds from other books was a mistake or the book banning your account for non-recreational play if they notice a pattern of you only betting big with them when they have odds that are very different from their competitors. If you want to have a better chance at betting on a sport or in a nuanced way that you know or can be good at or that can be helped by information you know or can acquire, then perhaps it is best to play at a sports book like 5dimes which has more betting options than any other book available in the USA or other countries. And which has numerous advantages outlined in part here.

In casino games some ways to find or acquire your edge or reduce the casino’s edge include things like waiting for favorable opportunities to play bigger: like waiting until there are a disproportionate amount of face cards in the shoe or deck being dealt from in blackjack or watching for a pachinko machine to be abandoned by a player that lost a lot in that sitting, knowing the way the machines are programmed that it will soon balance back out and start winning in all likelihood. Other methods involve just knowing the rules and odds of the games and knowing what to do or what to play in given situations. But these things can only reduce the house’s edge by so much and unless you find a game that is unintentionally skewed in the player’s favor, these casino games should really usually only be played for fun or if you have a good compensation deal with free hotel stays, food and gambling money and things like that given to you for free in amounts comparable to or greater than what you will lose there.

In games of chance where you do know or find or calculate an edge in your favor, you still need to know how to size your bets according by the size of your edge and the best known way for doing this is called the kelly criterion which is addressed on the section of this website entitled Maximizing Bankroll Growth but which could’ve also been called avoiding ruin.

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