Risk Of Ruin Blackjack

“Risk of Ruin” is his first published work of fiction. Players who discipline themselves to play in blackjack games with the more favorable rules using the basic playing strategy and a simple counting system will win a lot more money in their lifetime then the player who opts to play blackjack in “any old casino” using. A podcast about gambling, and life, and their intersection. – Listen to Risk of Ruin instantly on your tablet, phone or browser - no downloads needed.

Some blackjack players are so preoccupied with mastering perfect basic strategy and card counting that they neglect their money management. In blackjack, just like in any other casino-banked game, managing one’s bankroll adequately is of great significance.

Having said that, we would also like to point out bankroll management is powerless when it comes to decreasing the house edge. What it does help with is longevity, or preserving your blackjack bankroll for a longer period of time. No matter how perfect your play is, you are guaranteed to lose your money without discipline and proper bankroll management.

Building a Bankroll – How Much Money Do You Need to Play Blackjack?

Let’s start by specifying that your bankroll is the money you have set aside strictly for the purpose of playing blackjack. We suspect you already know this but just to play it safe, we shall say it again – you should never use money you need to cover your day-to-day expenses for playing blackjack, regardless of your level of skill or previous experience.

Our advice is to place your blackjack bankroll in a separate account and withdraw from it when you plan to attack the blackjack tables. Once you finish with the assault, you go back and deposit whatever you have left alongside any winnings you have generated during the session.

You should leave your bankroll alone in the beginning and avoid using it for any non-blackjack-related purchases. Once you succeed in building your bankroll, you can reward yourself by buying something with some of the winnings you have generated.

Table Limits and Session Bankrolls

With this clarification out of the way, we warn you there is no uniform bankroll size that applies to absolutely all blackjack players. The edge skilled players get inevitably manifests itself over the long term. Anything can happen over the course of a single session, a week, or even a few months.

Experiencing short-term losses, even if you are an accurate card counter, is hardly anything unheard of. The bottom line is as a serious blackjack player, you need a bankroll that is large enough to withstand the losses you may incur on a short timescale.

The overall amount you allocate for blackjack play should be broken down into smaller session bankrolls. How much you allocate for a single session is closely linked to what table limits you play.

If there are lots of casinos in your area but you have limited funds for blackjack play at your disposal, the smartest thing to do is scout the different gambling halls and find a table with low enough limits to accommodate your small bankroll. Provided that there is a single casino with high limits in your city, you better wait until you save a sufficiently large bankroll to play such stakes.

Show MoreHide MoreA session bankroll should be at least 50 times the lowest bet at the table. This is the bare minimum, recommended for basic strategy players and flat bettors. Respectively, players who count cards and move their bets with the true count are recommended to put aside at least 100 times their top bets.

Thus, if there are $10 tables in your vicinity and you flat bet at this minimum with basic strategy, your session’s bankroll should be at least $500. Your max bet should not exceed the amount of $10 under any circumstances. Provided that you are a novice card counter who uses a less aggressive bet spread like 1 to 5, you will need a session bankroll of at least $5,000.

Each number 1 through 5 corresponds to the number of base bets you need to wager when you move with the true count. You put out 5 units or $50 on a count of +5 or higher, 4 units or $40 on a count of +4, and so on. One unit of $10 is wagered on a count of +1 as well as on neutral and negative counts.

Evaluating Your Risk of Ruin

Disciplined players who exercise good money management are well-acquainted with the term “Risk of Ruin”, abbreviated as RoR. For those of you who are not, RoR denotes the probability of a given player losing their entire bankroll.

There are several values you need to take into account when estimating your Risk of Ruin, including your standard deviation, your bankroll in units, and your win rate per every hundred hands. There are free RoR calculators on the web players can use to accurately estimate the likelihood of busting their full bankrolls. Your other option is to use blackjack simulators that can calculate the RoR for you.

We can distinguish between two types of Risk of Ruin, namely session RoR and the RoR for players’ full bankroll. The former denotes the likelihood of the player losing their entire bankroll for the session while the latter shows you the probability of busting your overall lifetime bankroll.

To give you an example, let’s suppose you have a session bankroll of $2,000, play perfect basic strategy, and flat bet $10 per hand. You have 200 base betting units at your disposal. The software you are using has calculated that you have a session RoR of 18%.

This means that eventually you will end up losing your $2,000 around 18% of the time. And the opposite, your bankroll will increase 82% of the time. Meanwhile, if you cut your bankroll in half to $1,000, or 100 units, your RoR will jump to nearly 32%, which exceeds the tolerable limits. In the other 68% of the time, you will increase the bankroll.

It is important to specify that different players are willing to put up with different RoR percentages. At the end of the day, this is all a matter of individual tolerance. The bottom line is the bigger your bankroll is and the more base betting units you have, the lower your RoR will be.

Understanding Standard Deviation

The term standard deviation (SD) is normally used in mathematical statistics in relation to the distribution of expected results. In blackjack, it denotes the distribution of players’ results within a range of probable outcomes.

It tells you how frequently a specific outcome will deviate from your expected average. This is important because it enables you to assess whether you are playing a losing or a winning game as well as to decide how big your bankroll should be for any given session.

It is unrealistic to think you can win each and every blackjack session, even if you are perfect at basic strategy and count cards with great accuracy. A low standard deviation indicates the actual results fall closely within one’s expectations.

We shall explain how standard deviation works with a simple coin-flipping example. A coin has a 50% chance of landing on tails and a 50% chance of landing on heads. Yet, you cannot expect the coin to land precisely 50 times on tails and 50 times on heads in every 100 trials, or at least not in the short term. Sometimes it may land only 45 times on tails and 55 times on heads which happens roughly 2/3 of the time or around 68.3%.

Show MoreHide MoreIn the context of blackjack, the standard deviation of a single hand you play in a six-deck game is estimated at 1.14. Thus, you are expected to win or lose roughly 1.14 bet units around 68.3% of the time within one standard deviation, 2.28 betting units will be lost/won 95% of the time within two standard deviations and 3.42 units will be lost/won 99.7% of the time within three standard deviations. The distribution of these results is shown on the so-called Gaussian bell-curves.

Knowing their standard deviation enables players to calculate the probability of winning or losing a given number of units over the course of a certain number of hands. You do this by multiplying your standard deviation by the square root of the number of hands you play.

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So if your sample size involves 400 hands with a standard deviation of 1.14, you can expect to lose or win √400 x 1.14 = 20 x 1.14 = 22.8 betting units around 68.3% of the time. Respectively, 95% of the time, you can expect results within two standard deviations where you will lose √400 x 2.28 = 20 x 2.28 = 45.6 betting units over the course of 400 hands. And finally within three standard deviations, you will lose √400 x 3.42 = 20 x 3.42 = 68.4 betting units every 400 hands 99.7% of the time.

Standard deviation may be complex to understand if you are a novice but is nevertheless of great importance. You need it when calculating your RoR, which in turn helps you determine the bankroll you need. Do not be intimidated, however, as you can figure out what your RoR is by using a simulator software or one of the online RoR calculators.

House Edge and Hourly Losses

The beauty of using basic strategy is that it reduces the house edge in blackjack to such an extent that you are nearly playing a break-even game. Yet, basic strategy is not powerful enough to completely overcome the built-in casino advantage.

Even if you are perfect at basic strategy, the house edge will inevitably cause a dent in your blackjack bankroll over the long run. This dent, however, will be far more significant if you rely on gut feelings and hunches instead of using the optimal strategy.

Knowing the house edge of a blackjack game helps you calculate the hourly losses you can expect to incur in the long term. Suppose you choose a table with more liberal rules like those offered across Las Vegas Strip casinos where the house edge revolves around 0.36%.

You multiply this percentage by the average number of hands you play per hour and your average bet size. Assuming you are a recreational player who joins mostly full tables and bets $30 per hand on average, you will be able to go through roughly 80 hands per hour.

Therefore, the long-term hourly losses you can expect to see will amount to ($30 x 80 hands x 0.36)/100 = 864/100 = $8.64.You will inevitably arrive at this figure when you get enough playing hours under your belt. By “enough”, we mean tens of thousands of hours as anything can happen in the short run.

Unlike basic strategy players who are practically betting on a negative EV game, skilled and disciplined card counters are able to overcome the house edge. They have an advantage of around 1% at six-deck games with decent rules.

This enables them to grow their bankrolls overtime instead of incurring long-term losses. They calculate their expected hourly winnings with the same formula, i.e. by multiplying their edge by the average bet size and the number of hands they play per hour.

Respectively, an accurate counter who plays heads-up at an empty table with at a 1% advantage and goes through 100 bets of $30 per hour can expect long-term hourly returns of ($30 x 100 hands x 1)/100 = 3,000 / 100 = $30.

Handling Losing Sessions

Variance is inherent to all casino games, including blackjack. All players, no matter how skilled they are, will inevitably end up going through some losing sessions. Knowing how to handle these and when to call it quits is of great significance for preserving your bankroll.

Needless to say, chasing your losses is a terrible idea. The rule of thumb all smart blackjack players should follow is to always leave a table before they have busted their entire session bankroll. The general recommendation is to throw in the towel when you are left with fewer than six betting units.

So if you bet $50 per hand, you must ensure you have at least $300 before you continue playing; if you wager $100, you end the session when you are down to less than $600 and so on.

The reason for this is simple – you need enough money to back up any potential splitting and doubling decisions in line with basic strategy. The bottom line is you should never stay at the table if you are so underbanked that you can no longer exercise the optimal playing decisions. Doing the opposite will ultimately cost you money in the long run.

How to analyze your risk playing video poker

By Henry Tamburin

There is an excellent software program that does accurate bankroll and risk-of-ruin (i.e., RoR) calculations for a wide variety of video poker games. The author of the program is “Dunbar,” a professional gambler who has a strong mathematical background and a Ph.D. in biophysics. Dunbar first became interested in video poker in the early 1990’s, and co-authored the first article that showed how to solve long-term risk-of-ruin problems for video poker. In 2005, he created his acclaimed software, Dunbar’s Risk Analyzer for Video Poker, which enabled video poker players to assess risks and bankroll requirements for short-term trips as well as long-term play. To get the low down on the software (including the enhanced v2.0 that was recently released), I conducted this exclusive interview with him.

Can you briefly explain what is meant by risk-of-ruin for readers unfamiliar with that term?

“Risk of ruin” is the chance that you go broke. For example, if your risk-of-ruin on a weekend trip to Las Vegas is 50%, it means that there’s a 50% chance you’ll lose all the gambling money you brought with you.

What are the major benefits of your software for average video poker players?

Dunbar’s Risk Analyzer can help you decide which games are best suited for the money you’re willing to risk. Or, if there’s a game you know you will play, it can help you decide how much money to bring with you on a trip. It can also tell you your chance of winning or losing various amounts of money.

Can you give an example of how your software calculates how much money a player needs to bring?

Suppose you want to play 25-cent Jacks or Better (“JOB”) for four hours at a leisurely 400 hands/hour. Dunbar’s Risk Analyzer will tell you that if you bring $200, you’ll have just an 8% chance of going broke. That’s for a 9/6 JOB pay table. But what if the best you can find is 8/5 JOB? Then your chance of losing your $200 increases to 17%.

Will the software give risk-of-ruin data for multi-line games?

How To Calculate Risk Of Ruin Blackjack

Yes, it analyzes multi-line games, too. For example, suppose you want to play 25-cent 9/6 JOB on a Triple-Line game for four hours and you want to know if a $200 bankroll is still enough? Nope! Your risk-of-ruin would soar to 55%. You’d need to bring $450 to get your risk-of-ruin back under 10%.

Besides determining your short term risk, your software can help someone determine how much bankroll he needs in the long term to prevent going broke. Can you give an example?

The process is the same as for a weekend trip. If you set aside some money for the year for video poker, then you just enter the number of hours you want to play for the year and the software will calculate your risk-of-ruin. You can even split your play between up to five different video poker games. If the “RoR” is too high, you’ll know you either need to set aside more money, or plan to play less, or play a different mix of games.

A lot of players wish they knew beforehand if they had a shot at being ahead, say $1000, playing video poker over a weekend. Will your software calculate the chance that this could happen?

Yes. For example, say a player wants to play 20 hours of dollar 9/6 JOB and he wants to know the chance he will ever be $1000 ahead. Assuming 400 hands/hour, the answer is 22%.

Likewise, some players who take a trip to Las Vegas to play video poker would like to know what their chances are of winning (or losing) a specific amount of their bankroll that they set aside to play video poker. Does your software do these types of calculations?

Yes it does. For example, playing 20 hours of dollar 9/6 JOB, there is a 16% chance that you would win more than $2000, and just a 10% chance that you would lose more than $2000. If instead, you played the lower-paying 8/5 JOB, you’d have a much greater chance (36%) of losing more than $2000!

Many video poker players, who heed the advice of experts to play only full pay video poker games and take full advantage of multiple point promotions and bounce back, want to know how long it will take them to get ahead? Does your software give them an answer to this question?

Yes, it will. For example, let’s say the value of the cash back, bounce back and promos adds 1.5% to the 9/6 25-cent JOB game we looked at earlier. Dunbar’s Risk Analyzer tells you that you’d have to play the game for 448 hours to have a 5/6 chance of being ahead. It also tells you that if you want your very long-term RoR to be no more than 1%, you’ll need to have a $4,120 bankroll.

How many video poker games are preloaded on your software?

Dunbar’s Risk Analyzer comes preloaded with 54 video poker pay tables; 46 of them can be used as 3-, 5-, and 10-line games. There is room to add 50 additional custom games. While Spin Poker, Multi-Strike, and Super Times Pay games are not preloaded, I will add up to four of these games upon request at any time after purchase.

You recently released an enhanced version (2.0) of your software. What are some of the new features?

The software now does multi-line games. You can now analyze games with progressive jackpots or with a jackpot bonus. You can split your play between several games and see what the results will look like after each game. You can look at how stopping when you reach a “goal” affects you end results.

What are the PC requirements to run your software?

Dunbar’s Risk Analyzer requires Excel (Version 2002 or later) running in any Windows environment.

Where can someone purchase your software?

DRA-VP 2.0 is available for about $20 from ShopLVA.com, bj21.com, and GamblersBook-Club.com.

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Henry Tamburin is a blackjack and video poker expert. He is the host of the smartgaming.com website and the editor of the Blackjack Insider newsletter (for a free three-month subscription, visit www.bjinsider.com/free-trial). For a free copy of his Casino Gambling Catalog, which contains books, strategy cards, and software for casino players, call toll free 1-888-353-3234, or visit the web store at smartgaming.com.