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                 M O N E Y   M A N A G E M E N T

$mart Gamblers increase their chance of success in casino
gambling by managing their money.  Money management is the
process that once a gambling bankroll is defined, making the most
out of it.  It enhances the $mart Gambler's enjoyment of gambling
by controlling the resource that allows them to stay in the game.
Money management includes establishing a betting plan, an
appropriate bet size, dividing the total bankroll into playing
session bankrolls and establishing a point to quit when ahead.
This tutorial covers those techniques.



CONCEPT


When a business person starts and runs a business they develop a
plan.  Most house persons develop a home budget or plan.  To have
a successful retirement, an investment plan is established.  When
a gambling trip is planned, a budget is created for
transportation, lodging, food, beverages and entertainment.

To succeed, people routinely plan for these things.  If they
don't plan to succeed they are by default planning to fail.
Gambling is no different.  Each gambling trip involves risking
some amount of money that is significant to the individual.  Over
several trips, over a lifetime of trips, proper money management
will make a tremendous difference in the success and enjoyment of
casino gambling.

The process of money management requires self control and
discipline, particularly when in the casino with its
distractions.  Many gamblers know enough about casino games to
get ahead but openly admit they just don't keep any of it.  These
same individuals are often very successful in other aspects of
their lives that require the same or greater discipline.

A sincere desire to succeed and a positive attitude on the
ability to have self control is the first step to managing money.
It is not difficult and the more knowledge gained about the odds
of winning and money management helps.  The act of planning a
gambling bankroll in itself will help control it in the casino.
In the end, the individual must decide that they enjoy casino
gambling sufficiently to want to be more successful in it.  Money
management is essential for that to happen.  Once established,
self esteem will rise and the casino will view them as a tough
player to be respected.




GAMBLING BANKROLL


The first thing to establish in gambling money management is how
much money will be placed at risk.  This is the total gambling
bankroll.  It will influence the games played and establish the
amount that may be bet safely on each event.  This is the most
important concept of money management and bears repeating.  The
gambling bankroll establishes the bet size!  The casino check
cashing lines and automatic teller machines are busy with
gamblers who sized their bets arbitrarily and have to keep
digging for more funds.

The bet size is established from the total bankroll amount at a
level that can with stand normal negative streaks of chance.
This keeps the player in the game allowing them a normal chance
to recoup their losses.  A favorite procedure of casinos is to
raise the minimums on table games.  This was discussed in the
Casino tutorial.  The casino is quite aware that many gamblers
will just take a little more chance and bet more than what their
bankroll justifies.  One short negative streak and they are out
of action.

Money for the gambling bankroll must be purely disposable in
nature.  There is an old gambling saying that "scared money never
wins."  It is based on the need to concentrate and not be afraid
to lose when gambling.  Money used for gambling must not be
needed to make the rent or mortgage payment, buy food, pay
utilities or taxes or provide for other necessary items.  It also
must be separate of any transportation, lodging, food and other
expense money allocated for the trip to the gambling location.

Each individual must decide what their bankroll will be based on
their situation and what they are willing to risk for their
gambling entertainment.  If they enjoy gambling lower amounts of
money even though they may afford a larger amount, there is
absolutely nothing wrong in doing so.  A few gamblers seem to get
pleasure in boosting how much they lost or "dropped."  $mart
Gamblers never do this.

BETTING PLANS

There is no betting system that is going to over come the
casino's percentage advantage.  There may be systems advertised
or promoted as such but do not believe them.  They are
statistically impossible.  Money management will improve the
chance of success and increase the enjoyment of gambling.  It
will not turn a minus statistical expectation into a positive
statistical expectation.

There are two primary betting plans that will be covered.  The
first one is called "flat" betting.  In flat betting the gambler
bets the same amount on every gambling event.  Win or lose they
continue to bet the same amount.  There is no difference in the
order that bets may be won or lost.  The outcome is solely
determined by how many were won and the payoffs for them.  The
average bet size is the same as the initial bet size.


Flat betting does allow for easier management and control.
In certain types of games, flat betting is the best choice.
These would include slot machines that pay a bonus when the
maximum coins are bet.  Also most all video poker machines are in
this category as they pay a substantial bonus for a maximum coin
royal flush.  In these situations, the gambler should play the
maximum coins every time to reduce the casino advantage to its
lowest.  If their bankroll doesn't justify playing a particularly
coin level of a machine, they should find a lower one that fits
their bankroll.  Flat betting also may be done in other games if
that is the preference.


The second primary betting plan is called "progressive" betting.
This also may be referred to as parlaying or pressing the bet.
In progressive betting, the gambler starts out with a 1 unit bet.
If that wins they bet 2 units.  If that wins they bet more,
typically 3 units.  If they lose at any point they return to
betting 1 unit.  There is a significant difference in the order
that bets are won or lost.  In progressive betting, the gambler
is playing for a good positive streak and takes advantage of it.


The biggest benefit of progressive betting is that it adds to the
excitement of gambling.  In general, the gambler will lose at a
slow pace but may win at a fast pace when conditions are right.
When conditions are "choppy" such that one event is won then one
lost, they casino's percentage advantage will assert itself over
the long run.


There are some important considerations regarding progressive
betting.  First the average bet size not the initial bet size
must used in money management techniques.  The average bet size
will be greater than the initial bet size.  Second the gambler
must not let the size of the increased bet influence decisions.
These would occur in things such as doubling down in blackjack or
taking odds in craps.  These are essential actions that reduce
the casino's percentage advantage.  Third the gambler must have
the discipline to leave the game after experiencing a good
positive streak of chance.

There are other betting plans but none of them are recommended
for $mart Gamblers.  One is the "double-up" plan or sometimes
called the "Martingale."  This involves starting with 1 unit and
if that loses betting 2 units.  If 2 units lose then betting 4
units and so on.  Once a bet is won the gambler returns to 1
unit.  The problems with it is that it takes a huge bankroll, a
high casino table maximum and nerves of steel.  Also it wins at a
slow pace and loses at a fast pace.  This is opposite of what
most gamblers enjoy.



A variation of this plan is the "reversal of trend" betting.
This is usable on games such as roulette, craps or baccarat where
the gambler can bet on one side or the other to win.  If the last
outcome was for example a red win on roulette, black would be bet
to win.  This is essentially betting on hunches.  The problem
with it is that most gambling events are random and cannot be
predicted.  The roulette ball and wheel doesn't know or remember
that red just won.

This betting plan might work for a short period during a choppy
situation but there is no way to predict that it would continue.
Likewise if red won six times in the row there is no difference
in the odds on whether red or black will win on the seventh
spin.  It is just as likely to land on a red number as a black
number.




BET SIZING


Bets should be sized related to the standard deviation that was
covered in the Odds tutorial.  In review, standard deviation is a
measure of dispersion.  If the expected outcome of a gambling
event is X dollars, 68.3% of the total out comes are expected
within one standard deviation of X.  95.5% are expected within
two standard deviations and 99.7% are expected within three
standard deviations.


The following assumes the gambler has selected to play a low
casino percentage advantage game of less than -1.0%.  $mart
Gamblers only play at the best opportunities.  The bet units
required is established to with stand a negative fluctuation of
two standard deviations.  This would mean that in 19 times out 20
the bankroll should be able to with stand a normal negative
fluctuation.  It could be established based on three standard
deviations but most gamblers find that less attractive.



The chart below shows the approximate minus two standard
deviation level for different time durations.  The units are
rounded off for convenience and in the conservative direction for
safety.  Again it assumes that the game has a casino PC of less
than -1.0%.  Playing at worst casino games makes money management
ineffective.  The chart is based on an average of 100 gambling
decisions per hour that is typical of most games.  Never change
the plan while gambling.  If the bankroll for a particular
duration or session of play is lost, quit.  Repeat, quit and
regroup to play the next session with a fresh perspective!



                           Bankroll    Bankroll    Bankroll
                 Units     for $2      for $5      for $10
  Playing Time  Required   Avg. Bets   Avg. Bets   Avg. Bets
  ------------  --------   ---------   ---------   ----------
     1  hours      25        $  50       $ 125       $ 250
     2  hours      40        $  80       $ 200       $ 400
   3-5  hours      60        $ 120       $ 300       $ 600
   6-8  hours      80        $ 160       $ 400       $ 800
   9-10 hours     100        $ 200       $ 500       $1000
  11-15 hours     120        $ 240       $ 600       $1200
  16-20 hours     150        $ 300       $ 750       $1500
  21-25 hours     200        $ 400       $1000       $2000


Remember that first the amount of money to be placed at risk is
established.  Then decide the length of playing time and find the
bet size that can be justified.  For amounts other than shown,
multiple the units required times the average bet size.


If a trip was planned for 20 hours of total playing time in 1
hour sessions, divide the total bankroll of 150 units into
session bankrolls of 25 units.  Only risk those 25 units during
that one hour. If 15 hours of playing time is planned over two or
three days, establish a 1 hour session bankroll of 25 or 30
units.  Always round off bankroll amounts in the conservative
direction.  The $mart Gambler program's Planning-Money Management
feature performs these bet sizing and session calculations
easily.  The results can be printed directly or along with the
data collection form.


It is important to remember this is for the average bet size.  If
a progressive betting plan is used it is recommended that the
bets be increased as follows:

      Initial bet     1 unit
      If won bet      2 units             When any bet is
      If won bet      3 units             lost at any point,
      If won bet      4 units             return to 1 unit
      If won bet      5 units
      If won bet      Stay at 5 units


The progression to 5 units will provide a fair amount of
excitement when positive swings are experienced.  The 5 unit
progression will result in an average bet size of approximately
twice the initial bet. If blackjack is played at a $5 initial bet
and progressed to $25 a hand, a bankroll for one hour of play
will be needed of $250.  For 15 hours of play, $1200 will be
needed.  The $mart Gambler program's Planning-Money Management
feature performs its calculation based on the selection of either
a flat or progressive betting plan.


This may appear to be excessive and considerably above what many
gamblers have been doing.  Maybe that is why they have not been
as successful as they would like.  The negative swings do in
players betting at levels not justified by their bankrolls.  Good
luck takes a good sized bankroll.  If the bankroll doesn't
justify playing at the level desired, to be successful the
gambler must drop down to the level justified.  If the casino
doesn't offer a lower betting level game, play may need to be
done during off hours or elsewhere.

For craps players, it is always recommended that the free odds be
taken to lower the casino's PC.  See the tutorial on Craps for
more details.  When this is done the odds bet must be accounted
for in the average bet calculation.  Odds will not be taken on
every situation, just the numbers 4-5-6-8-9-10.  The odds amount
will vary with the number but for single odds a conservative
method is to multiply the initial bet by two to get the average
bet.  If using a progression betting plan remember to multiply it
again by two.

WHEN TO QUIT

Most gamblers never want to quit when they are winning.  The
problem is to decide when the winning streak has likely ended.
Many gamblers never do and give back to the casino all their
winnings.  The standard deviation is a good solution for this and
can be used to decide when it is a good time to quit when ahead.

The two standard deviation betting units also establishes a win
level that would likely only be exceeded 5% of the time.  Some
gamblers may wish to stop right there.  Another method is to
establish a quit percentage point off of the two standard
deviation level reached.  The following chart shows the plus two
standard deviations for various time durations and common stop
percentages.

                  Top Units   Quit       Quit       Quit
  Playing Time     Reached   at 80%     at 70%     at 60%
  ------------     -------   ------     ------     ------
     1  hour         25        20         18         15
     2  hours        40        32         30         25
   3-5  hours        60        50         45         35
   6-9  hours        80        65         60         50
   9-10 hours       100        80         75         60
  11-15 hours       120        95         90         75
  16-20 hours       150       120        115         90
  21-25 hours       200       160        140        120

The numbers have been aproximated for easy reference.  If playing
for one hour at $5 average bet and ahead $125, quit when falling
to plus $100, $90 or $75 depending the plan.  If playing two or
three days for a total of 15 hours and $600 ahead, quit and savor
the win when falling back to plus $475.


It is not vitally important whether an 80, 70 or 60% quit point
is established.  Each individual may set theirs based on their
gambling temperament and experience.  It is very important though
that once a quit point is set that it be strictly followed!  Do
not change it in the middle of a playing session or trip.  This
also will benefit the $mart Gambler in that they will not have
any second thoughts later such as "if only I had quit."

Most of the times the plus two standard deviation level won't be
reached.  A conservative money management technique is to limit
the negative swing to two standard deviations off of the top
level experienced.  This means if playing for one hour and plus
15 units is reached, the player would quit if a negative streak
drove the bankroll to minus 10 units.  That would be a 25 unit or
two standard deviations drop from the top level.

Conservative players who like the satisfaction of more winning
sessions, also may choose to apply a percentage quit point before
reaching plus two standard deviations.  If they got ahead 15
units when playing for one hour, they might quit when falling to
10 units ahead.  Their wins will be smaller and actual sessions
shorter but if applied consistently the long term result will not
be significantly different.


REPORTING

The $mart Gambler program's reporting features also will help in
making decisions on bankrolls, bet sizing and quitting points.
If gambling experiences are inputted accurately, the $mart
Gambler reports and graphs will be useful in understanding the
results.  They can be analyzed and the information learned from
them applied to improve future gambling plans.

There is another benefit to keeping an accurate data base of
gambling results.  Imagine the following situation.  Throughout
the year a gambler made several trips playing dollar slot
machines.  To date their losses are fairly significant.  On
December 31st at 11pm, they hit a big jackpot.  The casino is
required on large payoffs to obtain their social security number
for filing with the Internal Revenue Service.  On very large
payoffs they are required to deduct 20-30% for the IRS.


Gambling losses may be deducted on income tax returns to offset
gambling winnings.  Of course the losses only may be deducted up
to the amount of winnings for that year.  The problem is that
losses must be proved with among other things accurate records.
If they don't exist, the deductions will likely be disqualified
and taxes will have to be paid on the casino's reported win.



SUMMARY


$mart Gamblers understand these money management concepts and
apply them without fail in their casino gambling.  They know from
experience the importance of this and how it improves their
success in the casino and increases their enjoyment of gambling.

  Copyright 1992  PC Information Systems  All Right Reserved