Playing The Empire for Fun and for Profit

A Gambler's Guide to

Baccarat

By

Lee Evans

FUNDAMENTALS

* * * * *

PUBLISHED BY:

Lee Evans on LeeWare Development

Playing The Empire for Fun and For Profit

Copyright © 2012 by Lee Evans

Thank you for downloading this free eBook.  You are welcome to share it with your friends. This book may be reproduced, copied and distributed for noncommercial purposes, provided the book remains in its complete and original form,  Your support and respect for the property of the author is appreciated.  This book is dedicated to fellow Baccarat Aficionados who tirelessly work the tables at casinos around the world.

Playing The Empire for Fun and for Profit

A Gamblers Guide to Baccarat

Chapter 1

Introduction

My gambling journey started on the week of my 40th birthday around August of 2011.  As part of a long custom, I make it a point to travel every year on the week of my Birthday either to somewhere I've always wanted to go or to somewhere I've never been, my trip to Vegas fell  into the latter category.

A relative of my wife has a place in Vegas just off the strip and offered to let my wife and I stay there for a week.   My wife was there on business, but  I was on vacation, so like any other tourist, I hit the strip and having never been inside a casino before, I was immediately reminded of the video arcade rooms of my youth accept,  this was for adults and instead of simply playing for points or status, the real carrot is playing for money.

There was another thing that reminded me of my earlier experiences with arcade gaming in general and that is, typically, at the beginning, when playing arcade games, if you were not that good, you would lose all of your quarters.  The people that were really good at playing games could extend their play and get a lot of milage out of their quarters therefore,  I thought to myself, If I was going to engage in gambling I wanted to be good at it.  

While in Vegas, I studied up on the various table games and played a little slots (but didn’t understand Casino Mathematics or really know what I was  doing). I was able to determine from my research that if I was going to play a table game, Baccarat appeared to be the easiest and the fairest table game to play with a very low house edge. I took a pass on the other table games as other table games require some hours to learn how to play effectively and they are filled with options and characteristics that make them much like the slot machines, but not in terms of edge, but player experience.  I do recognize that there are propositions in the other table games  like the pass and don’t pass bets in craps or the black and red options in roulette that are similar to Baccarat but those are not central to the game play like in Baccarat.

Fortunately for me, that same summer, Rivers Casino in Des Plaines Illinois was opening, so I had a place to conduct my research and run my experiments. The best part, is that this casino is only 4.5 miles from home and about  2.5 miles from work.  For me, it is in the middle of my two points of daily travel and convenient enough to go to on the weekends or whenever I want.  It is a ten to fifteen minute car ride.  In addition to gambling, it is a cool, safe place to grab a bite to eat, hangout, people watch and socialize and best of all  (for me at least) it is smoke free.

In terms of my personal disposition, I’ve been a responsible manager of my money for virtually my entire life and as a result of that management, I’ve been able to achieve a level of financial security. Which means that I am afforded the opportunity to engage in a practical sociological exploration of the challenges gamblers face and to understand the ins and outs and the motivations of participating in what can be a fun and exciting form of entertainment but for far too many, gambling ends up enslaving them into a life of misery, perpetual loss and ruin both financial and personal.

Understanding how and why this happens, as well as how one may achieve some form of balance is the primary aim of this book. The secondary aim is, to provide practical, technical analysis of the underlying mechanics so that one might be able to transform the act of gambling into a productive and more satisfying experience.

I know that it is one thing to study and to know the theory behind something and quite another to learn the challenges of real world application. Therefore, if I was going to do this, I figured I had to submerse myself into the world of gambling to understand fully the total impact of the  real challenges that gamblers face, challenges that cannot be appreciated by an abstract study of just casino mechanics.  By becoming a card-carrying casino patron, I learned enough about the psychological challenges to be able to fully integrate the knowledge that I know intellectually with the joys and perils of real world experience and better yet, I can see how it all ties together.

I started running experiments on the slot machines at Rivers Casino in Des Plaines, IL  in 2011.  It took about four months to fully understand the attraction, entertainment value and perils of playing the slots.  During my experiments, I played virtually every type of slot offered by the Casino both on the main floor and in the high-limit room before graduating to the tables.

I ran many practical and observational experiments on the game of Baccarat as well as collected a book of outcomes for further analysis and publication. I put in about 200 hours of game play and observation. To fund this research, I opened a line of credit with the casino so that I could  buy in to each game for $5,000 to $10,000 per game.  My slot play was capped at $5,000 cash markers (slots have worse odds). Taking out markers is  safer and cheaper than using the cash cage or the ATM machines to gain access to your money as the fees for such transactions when conducted from the casino are high.  Using markers has the added benefit of using house money to play for house money.  Obviously, it’s your money when you win or lose.  Markers are no interest 30 day loans that are extended to casino patrons that have the capital to back the loans and a good credit history that is, paying off debts in full and on time.

Some of the practical challenges I had in conducting my field research included the expense and time it took to try various methods, therefore, I had to fall back to reading and studying everything I could on statistics related to casino games, gambling psychology and casino math. The following research and analysis done by others was most helpful. Such as; the work by a casino mathematician who runs the site http://www.thewizardofodds.com, a blogger that runs the site ImSpirit located at http://imspirit.wordpress.com  Seth Theobeau who runs the site http://targetbetting.blogspot.com and finally, the archives of gaming Author Al Krigman which can be found here http://krigman.casinocitytimes.com/archives/  as well as a few others.  I examined various different betting systems, as well as, designed and tested my own, which are modifications of other betting systems.  The primary reason for doing this, was to create systems that provided the best balance between action and risk mitigation based on the characteristics of the game.  To accelerate the trending analysis, I used four methods; one was to play with chips and the outcomes books I compiled using win loss patterns as recorded from live casino play. With this method, I was able to practice tactile execution of betting approaches to increase my muscle memory of complicated betting strategies such as hedging that is, running progressions against both lines in a single game.  With this method of analysis I was able to reduce the time it takes to go through 6 hours of gameplay (240 hands) into about an hour of analysis. Second, I played using computer programs this allowed me to accelerate my testing and analysis a little more.  Third,  I relied on a bit of custom programming as well as the purchase of a program (Baccarat Buster) that allows me to program in up to six different sets of betting logic and then generate up to 200 hours at a time of trending analysis.  This program proved extremely valuable as it tracked very closely to my other forms of analysis including live game play. I should note for the record, that I recognize my methods do not produce statistically significant outcomes in a game that can have more than a quadrillion outcomes.  However, I contend that first, no human will live or gamble long enough to encounter every possible combination of shoes that exist and furthermore, while there may be more than a quadrillion outcomes, when you aggregate those outcomes into groups of shoes, you end up with shoes that exhibit five common characteristics: Streaky, Choppy, Neutral, player Dominant and banker Dominant. The obvious problem for players is that no one can see around corners. Therefore, it is hard to know what you are getting until after it happens which is the nature of the game, and the player is still therefore, forced into a binary decision at every level which will either be right or wrong.  

This brings me to my fourth and final method of testing, using this understanding and perception of common shoe characteristics, I took the time to map out all of the possible outcomes (excluding ties which skew the results - I will talk about this more later) and composed two shoes of win/loss patterns starting from all losses to all wins. Not so coincidently, in a perfectly balanced binary game, when you group the decisions in groups of 4s or 5s (I use 5) are mapped out in every combination starting from all losses to all wins, you get 32 blocks. These blocks contain a total of 160 decisions and all shoes are some combination of these decisions.  By stringing these blocks together from worse to best you end up with a pretty good approximation (not absolute by any means) of worst and best case scenarios.    I can use these two shoes to quickly test the balance (gains/loss ratios) of betting techniques quickly.  My results, using these two shoes validate my experiences at the table as well as the  common refrain uttered by mathematicians regarding playing systems against games of chance where the odds are bound to catch up with you.  

Therefore, I can concede that no matter what you do, the only thing proper execution of betting strategy does is slow down the process of a particular gambler going bust because at some point you will encounter a situation that produces a relatively negative outcome.  This is a mathematical inevitability in all games of chance especially those with negative returns.  Eliminating risks in Casino games is an impossible task but managing risk is entirely possible.

I will provide you with many practical solutions for doing this.

 

Casinos are masters at psychology so much so that they understand the behavior of gamblers better than most gamblers know themselves.  The first real lesson I learned about playing games in the casino is that the more you play, the less risk averse you become. That is, new casino patrons are typically very guarded about their money and risk small amounts of money during casino visits,  however, the more you play, the larger those amounts become, until you think nothing of risking amounts of money that would have seemed unimaginable and certainly not reasonable at some earlier point.

The thing that every gambler must remember is that the casino is in the entertainment business.  Where they differ from other forms of entertainment is the cost of entry and participation is not fixed.  This can be a good thing for a savvy casino patron because it affords one the opportunity to go out, have a good time and even get paid for the  privilege.  However, it is helpful to keep in mind that nothing in the casino is free.  If you are not paying for it, someone else is.   This can be both a good thing and a bad thing.  A good thing when you can go there enjoy yourself and don’t have any out of pocket expenses.  Obviously, it is a bad thing when your night out costs you more money than you could have justified spending under any other circumstances. I hear a lot of gamblers blame the casinos for their losses and many confuse this with the built-in advantage of the games which the casinos are entitled to charge, after all they are facilitating the games. No gambler likes to hear it, but the casinos don’t take money from casino patrons, people bring their money into the casino and put it at risk.  Now, the casino will do everything it can to make separating a gambler from his money as pleasurable of a process as possible.  But they don’t tell you when to play, and how much to risk, those decisions are left to the gambler.

Every gambler has a favorite casino game and for me and many others, (especially Asian players) that game is Baccarat pronounced (Baccer-rah) or “Bac” for short. The word Baccarat is an Italian word that means zero.  The game is deceptively simple to play however, as any seasoned player will tell you, the game has many nuances that can seem to take a lifetime to master.  In short, gamblers can make wagers on three positions; player, banker or Tie. The outcome of each hand will fall into one of those categories.  The winning hand is determined by the hand totals that come nearest to 9. Face cards and 10s equal zero and any combination of cards that result in numbers greater than ten result in the 10 being dropped for example a 13 = 3  15=5 etc. If you placed a bet on the winning spot, you will effectively double your money.  However, if you placed your money on a losing spot you get Baccarat (zero) which means you lose your money.  Ties pay 8-to-1 and is characterized as a sucker bet because the house edge is 14.36%.

The game has a 1.06% house edge on the banker bet but the casino charges 5% commission on winning banker bets and a 1.24% house edge  on winning player bets.  The house edge on the player bets which pay even money come from the fact that banker has more complicated drawing rules which gives it an advantage. Which means that in the long run, the banker will win more decisions than will the player.  Therefore, if you are playing mini-baccarat which is a faster version of the game were the dealer handles the cards and the table minimums are $10, if you make a bet on banker you will win $9.50.  A bet on the player would pay $10.  For a more comprehensive and complete guide on Baccarat, I highly recommend “Baccarat for the Clueless A Beginners Guide to Playing and Winning” by John May.

Chapter 2

Casino Gambling Fundamentals

Everything You Need to Know in a Nutshell

First,  it is extremely helpful to learn a little (a lot actually) about casino math that is, how the casino makes its money from your game play.  You specifically, want to focus on things like edge, odds, utility and volatility.  These are all things that will have a lot to do with your actual experiences in the casino.  However, to save you lots of time and effort, the underlying mathematics of all casino games are designed in such a way so that you will win less when you win and lose more when you lose.  This is because the games are structured in a way that creates few paths to win and many paths to lose (odds).  The games are also designed so that statistically wins and losses cancel each other out. Therefore, the casino has to build in an edge (one directional flow of money) that makes sure they end up with a positive amount at the end of a long series of trials, this in contrast, means that players will end up with some number that is left of zero.  In the short term volatility overwhelms edge  and Standard Deviation puts players ahead or behind at amounts which are either larger or lower  than edge would suggest. In simple terms, gambling is a perpetual cycle of booms and busts.   The more gamblers attempt to control these factors the more they increase volatility.

Casinos have two and very real practical advantages over gamblers. First, funny money (valueless casino chips and credits.) vs real money.   When casino patrons play against the casino, they are doing so using a very limited  amount of real money.  The casino on the other hand, has at its disposal a virtually unlimited amount of money (valueless casino chips and or credits) that it can leverage against 99% of its players.  To put it another way, in order to play casino games, you need to use real cash to purchase casino credits at  a 1:1 ratio.   However, what is happening in fact is that you are using real money to purchase something that has zero value and it remains that way until you hit the cash cage to convert your zero value currency back into real money.  However, few gamblers do this for a series of complicated reasons I will get into later and this only increases the casinos advantage over them.   This is because every gambler is locked into a game of marbles with an opponent that has virtually an unlimited amount of marbles which means that he (the casino) will be able to take all of your marbles before you can capture any significant number of his, while retaining all of yours. The second and most under appreciated advantage casinos have over their patrons is time.  That is, most casinos  run 24/7 and even if a gambler is able to score many successful victories over them, every time the gambler plays, he’s giving the casino an opportunity to win its money back. Casinos will do everything they can to keep gamblers playing especially after a big win.  If there is one thing you must know about gambling in a casino, and that is, the more you play the more they make, and while you might be in it for the short term, they are in it for the long run.

The insights, reflections and analysis offered here are primarily related to the game of Baccarat but could be appropriate to any even money-two outcome game of chance like the pass and don’t pass at craps or red and black in roulette.  However, the underlying mathematical mechanics of those games are not a part of my analysis.

Chapter 3

Establishing A Solid Foundation

“-it is gratifying to rationalize that we would rather lose intelligently than to win ignorantly.” -- Richard A. Epstein  The theory of Gambling and Statistical Logic.

Lesson  1

“The difference between winning and losing at casino table games isn’t luck. It’s all about discipline.” Seth Theobeau

The first and most important lesson a gambler needs to learn is the difference between earning money, making money and winning money.

1. Earning money involves trading time, and or energy for money.  Most people earn money by having a regular job that is based on a simple calculation you do X and you get paid Y.

2. Making money,  Making money is a two step process:

Step 1 Make (earn) money.

Step 2 Don’t spend it.

That is, when your income exceeds your expenses, you will have some money left over, some people think of this as disposable income. Let me say for the record, I don’t like the term disposable, especially when it appears in the same sentence as income or money because it implies that one has money they can put in a pile and light it on fire.  I would like to think that most people value the time that it takes to earn money and whenever you don’t have to spend it, you made it!

3. Gambling to win money is an activity that is fundamentally different from the first two because you need to RISK money to WIN money.  To make this a little clearer, when you gamble you are not earning money because whether you’ll be compensated for your efforts or not is left to chance. Which means instead of there being one outcome to your actions now there’s two. This small change has a significant impact on our experience.  If you remember what we learned so far:

Time = earn money

Don’t spend = make money.

Win money = (maybe)  

Winning money fails on another front when compared to making money, and that is, when you are gambling you are not making money because to make money you have to not spend it.  Gambling forces you to spend money for the “chance” to win money. Therefore, gambling is all about uncertainty and risk.  

Just to get it out of the way, there is absolutely, no secret betting method system or strategy that can ever eliminate the risks involved in gambling, it is a mathematical impossibility.  However, you can win money playing casino games.  Virtually every gambler who plays table games can tell you a story about winning money and that was the hit that got them hooked.  However, the road to financial ruin and personal despair continues to be paved by gamblers everywhere who have not mastered the concept of  knowing the difference between earning money, making money and winning money.

Once you fully comprehend the difference between the three, then you can set appropriate expectations and formulate a plan that will increase your chances of success and minimize your risk of total disaster.

This  brings us to something called the Utility Principle which boils down to:  If an action results in happiness then it is good however, if it results in pain or unhappiness then it is wrong.  

Lesson  2

Learn to recognize risks you are taking when playing games of chance in an attempt to Win Money.

“The house's fat bottom line depends primarily on the fact that the vast majority of gamblers have no idea of the negative odds they are challenging, and assume that whatever the numbers may be, they don't apply to them.”  Seth Theobeau

 

Here’s a short list of real challenges every gambler faces and as a result dooms them to catastrophic failure, as well as,  an all too predictable pattern of behavior which usually results in a significant loss of capital.  Or as I like to say, giving your money away.  

1. Assuming that it is possible to earn or make money in the casino (See Lesson #1)

2. Play games of chance with no real understanding of the underlying mathematical mechanics or risks.

3. Failing to establish clear gambling goals.

Let’s take the last point first.  Failing to establish clear gambling goals.  In my observations and interviews with other casino patrons, they all pretty much fall into a few categories. First, there are individuals that have impulse control issues that is, while they say that gambling is about making money (See Lesson #1) they are actually thrill and action junkies looking for the next big hit.  I suspect that most of these people started out like everyone else, but due to the time (days, months or years) they have spent inside casinos, they have become completely institutionalized.  Some of them so much so, that many are surprisingly quite knowledgeable even philosophical about the practical nature of gambling but seem powerless when it comes to limiting the heavy losses they take on an almost perpetual basis.  This is possibly because they are completely out of balance and no longer have any sense of risk aversion.  Second, are gamblers that have tilted that is, they have lost so much money in the casinos that they have enslaved themselves to spending any free moment and virtually any money they have in the desperate and unfortunately hopeless attempt to recover past losses.  In other words, a classic case of pathological gambling addiction. The third and final group, is composed of individuals that are at various stages along the path to becoming members of the first two groups.  

In my field studies, acting as a gambler myself, and observing others, I’ve been able to map out the gentle lure to ruin that puts virtually all casual players of Baccarat and I suspect other table games as well, on the path to becoming institutionalized gamblers. Which means that they will ultimately end up as members of the first two groups, that is, institutionalized and or pathological gamblers.

First, some of the games are fun to play and there is a pleasure factor.  Second, gambling in a casino is a communal experience.  The casino for any regular patron is like a little village composed of (regulars) which consists of casino staff such as; dealers, pit personnel, hosts, cocktail girls, and a host of regular gamblers.  This is supplemented by a constantly rotating cast of characters primarily composed of casino hoppers (gamblers that bounce from casino to casino),  part-time gamblers (those that visit the casino on a certain schedule) and spectators, that is, people that come to the casino for other attractions such as the social atmosphere it provides, like the bar, the club, the buffet etc,  these individuals might place a bet or two, if any, but they belong to a largely transient group. This atmosphere triggers a subconscious desire to be social and to hang out in a place where the action is at.  In addition, the casino staff has been trained to be kind, courteous, and respectful to the casino patrons, and this treatment, creates a subtle but powerful ego boosting effect in the casino patron which deepens the attraction to spending time in a place where he or she feels appreciated.  When you spend hours at the table gambling there is camaraderie in the shared joys of winning and the agony of defeat, there is encouragement, support, sympathy, hostility, foolishness, gossip and other things.  Therefore, the act of gambling in a casino is an entertaining experience and in a very practical sense, it is the experience that we are paying for.  This coincidentally, is where the problem starts.   In other words, these deep subconscious desires for these social pleasures create a conflict which will override any rational rules you might have.  

 

Now let’s look at the very real ways in which gamblers are disadvantaged when they don’t understand the underlying mathematics.  Baccarat is commonly understood to be a 50/50 game but due to the house advantage, the game is tilted so that the house enjoys a 51% advantage which means by extension that the players are at a 49% disadvantage.  Which means by further extension, the highest confidence level any player should ever place in any outcome is 49%. The practical implication of this 1% house advantage, means that over the long run, gamblers will lose more bets than they win.  To overcome these odds, gamblers have to perform at 52% or better and have to try to win more when they win than lose when they lose,  but this begs the question how does one do that?  Before I can answer that question, I have to talk about what people do to make it worse.   It is a fact that luck has little to do with winning or losing in Baccarat, money management plays a much more central role. This will become clear as I begin to make my case.  

The first mistake many players make is that they use tactics which are appropriate for short-game play that is, just a few hands to score a win or take a loss and call it a day.  To play a long game which means they want to use the same short term plays to bet against a larger number of decisions. The problem with this approach, is that while a gambler might win at first, he or she will “lose it back” plus some due to the volatility of the game.  Which brings us to the main killer of players at the table, not having enough money to survive the normal and inevitable down swings which can occur when playing the game for any length of time.  This causes players to respond in two ways which seem rational, but usually make the situation worse.  First, the player will “pull back” and start playing scared which means, making very small bets in an effort to conserve capital or second, the player will respond by pushing out larger and larger bets which will accelerate the losses until the player goes broke because they couldn’t sustain the larger bets.  When players start out winning, using big bets they will keep betting at these high levels until all of their winnings and any money they came with is back in the dealers tray.  Other mistakes, include; betting within a tight spread of 1 to 5 units so that any normal negative trend puts them behind and they can never catch up, playing while impaired that is, playing when you are tired, when you are tired, you are not focused and will begin to make mistakes.  Drinking while playing makes you erratic and reckless.  Playing for too many hours without a break has the same effect as you will become increasingly irritated which means irrational.  Chasing losses, not accepting that you are going to lose some hands or games.  These are all forces that contribute to failure at the table.

So what does success and discipline look like?  For that discussion, we have to start with the concept of what it means to set clear gambling goals, and for this, you need to understand how several forces work against one another.  These forces can be simply stated as:

1. Objective (What it is you are trying to accomplish?)

2. Outcomes (How well you are doing in reaching your objective?)

3. Time  (How long it takes to determine if you have achieved your objective?)

These three forces have a relationship that will become increasingly clear as we move forward.  Most gamblers have the stated goal of doubling their money and many will go for broke trying to achieve this objective because they simply play too long. That is, the more you play the more varied the outcomes and as a result, your chances of doubling diminish with extended play.  This is one of many reasons (I’ll cover the rest) gamblers finish at a loss.  Therefore, gamblers have three practical options when it comes to playing:

1. Go for short-term maximum gain that is, double your stake or bankroll in the least amount of time possible.  This is called the Maximum Boldness Theory and has its merits in the fact that if you are going to win,  your best chance is to place a single wager containing the amount of money you wish to win.  Therefore, if you are trying to win a $1000 you should place a single bet for $1000.  If you win, you’ve achieved your objective and you can go home.  If you lose, you have your outcome and you can go home.  This option takes the least amount of time and is technically the most efficient approach.  In my observations, I have observed a minority of people that play in this way.  

2. Maximize table time, the first approach ignores the other lures of gambling and that is, the entertainment factor.  The act of being social and the thrill of actually playing the game for a while.  The best way to increase table time, is to limit bet size to near the minimum, decrease the number of bets made that is sit out decisions. However, it should be obvious, that this approach conflicts with the first approach on the following basis,  if you play efficiently to meet your objectives, then you can’t play for that long.  On the other hand, if you wish to maximize your play time, then you will likely not be able to accomplish a stated objective efficiently due to the underlying mathematical forces.  If you wish to understand these underlying mathematical forces in mind-numbing technical details, I highly recommend a book titled, “The Theory of Gambling and Statistical Logic” by Richard A. Epstein.  In my field observations and discussions with other casino patrons, most gamblers appear to be locked in a vicious cycle between these two modes of play and not many exercise the third option (at least not in a way that shows any kind of discipline) but I suspect, that this is due to a lack of knowledge relating to the other factors which play an important role in the gambling experience. Factors, I will discuss shortly.

3. Balance objectives with action, or to use a system which I like to refer to as methods.  Systems or methods don’t help you win as they don’t change the underlying mathematics of the game, but they do however, significantly alter your experience with the game.  As each system or method is really just a series of trade offs which balance rewards and risks.

In a very general sense, discipline requires the mastery of several concepts and Seth Theobeau who runs the site (http://targetbetting.blogspot.com/) lays out many of them very clearly and I can summarize the most important points here:

1. Accept that luck is an irrelevance because it favors the house as much as the player and recognize that the house advantage make it inevitable that over time, the smartest gambler will lose more bets than he or she wins. Grasp enough math to know that if you are going to lose more bets than you win in the long run, the only way you can win any money, is to win more when you win then you lose when you lose (an objective which will require courage at times).

2. Learn the best way to play these games head-to-head which means avoiding the money traps such as tie bets and dragons which will end up costing you more money than you will gain. Be fully aware of the negative odds you face knowing that the tiny house edge enjoyed by the casino is far less of a factor in player losses than poor money management.

3. Know that winning requires a substantial bankroll (something the house knows too) and that long-term profit without risk is a mathematical impossibility. Play consistently and cautiously, knowing that what many people assume is conservative betting actually increases the house’s already favorable odds.   Study win-loss patterns and see in them the simple truth that the key to winning is exploiting positive streaks in such a way that cumulative losses can be recovered in fewer bets than it took to get into trouble in the first place.

4. Never take losses personally because they are almost always temporary. Use your losses as opportunities  to learn something from being beaten.

Lesson 3  

No one can see around the corner, predicting the future is more unreliable than you think.

Baccarat is fundamentally a guessing game where gamblers attempt to predict the future. Many players use different kinds of systems and methods to use past outcomes to determine future events.  Yet others rely on what they feel like they know.  The central problem with any system or method that relies on the  past to predict the future in games of chance, is the cognitive bias that sees past success as evidence of inevitability and proof that the method will be reliable for future use.  However, in actual practice, the hit ratio of guessing outcomes is shockingly low and therefore worse than line betting (always betting on one of two outcomes).  It should also be noted that studies of bet placement systems reveal that they don’t perform better than line betting.  In my trial of trying to guess outcomes based on heuristics, my highest success count was twelve in a row.  The average was clusters of 2 to 6 correct decisions separated by much larger gaps of wrong decisions. In my experience, it has been much easier to get a lot more wrong than right. On an off day, I was able to guess three out of every four decisions wrong!  The mistake gamblers make here is confusing skill with luck, that is, they place too much reliance on specific cases of success which means by extension that they largely ignore the failures which if examined, would likely outpace the successful guesses by a considerable ratio.  There are useful metrics in Baccarat (which I will cover later) that can be used to establish a base rate (what is known) to make better predictions which can lead to greater opportunities for success.  To learn more about skill vs luck.  I recommend Michael Mauboussin “Sorting the Sources of Success”.   In his book The Theory of Gambling and Statistical Logic, Richard Epstein, a game theorist trained in physics, notes that there is no way to assure that you’ll succeed if you participate in an activity that combines skill and luck.  But he does say, “It is gratifying to rationalize that we would rather lose intelligently than win ignorantly.”  Luck may or may not smile on us, but if we stick to a good process for making decisions, then we can learn to accept the outcomes of our decisions with equanimity -- Michael Mauboussin.  Baccarat is a game that requires zero skill to play.  

 Chapter 4

Money Matters

The Fundamental Math Every Gambler Should Know.

At the end of the day, gambling in a casino is about money so much so, that gambling is a multi-billion dollar a year industry.   Where roughly 90% of the revenues come from slot machines.   The tables have better but varying odds. It is estimated that 5% of players  develop gambling addictions and of those players, their losses account for a quarter of the casino profits and to make matters worse, these are the same gamblers who have committed themselves to spending long hours in the casino playing against the same bad odds trying to win back substantial amounts of money only to be pulled further into debt as the math of the games work against them.  The rest comes from players who lose unnecessarily large sums of money on a pretty regular basis due to lack of knowledge and discipline when it comes to the underlying mathematics of the games.  In this section, I will unravel many of the fundamental concepts as well as provide some tools, tips and recommendations (many of which I have been promising to get to).  Since mathematics is a complex subject, I will simplify everything into an easy to understand format.  

Lesson 4

Understanding the Concept of a Negative Expectation Game

If Baccarat were a completely fair game, then the odds would be 50 / 50 but due to the built-in house edge, the game is 51/49 where the casino gets the 51% and the players get the 49% disadvantage.  To fully appreciate the implications of the advantage / disadvantage you have to understand the underlying mathematics.  The casinos advantage comes from the following mathematical formula

Profits = (Total Wagers) x (Edge)

Therefore, the casino doesn’t really care if you win or lose an individual bet because built into the game is the aforementioned formula that guarantees them a profit and this profit is achieved with extended game play.  So the casino will encourage you to play longer.  To illustrate this concept let’s look at a short sampling of examples:

We start by constructing four shoes which exhibit long term statistically correct outcomes.  Where in; shoe 1 banker wins, in shoe 2 player wins and in shoe 3 banker and player tie or break even and the same happens in shoe 4 but in a different way.  It should be noted that the cumulative effect of shoe 1 and shoe 2 is that banker and player break even.  However, over the long run, banker will have more events than the player so the casino charges a 5% commission against banker wins.  In the following examples we will look at how the casino makes its money from heads up play that is, where the player places a wager on every hand.  To keep things simple, we will use the table minimums of $10 for every bet and the player has a maximum bankroll of $100.  I call this kind of testing an If analysis as in “what if”.  I will also attempt to point out the relative advantages and disadvantages as we walk through the examples.

Shoe 1 banker Wins

1

2

3

4

5

6

7

8

9

10

P

P

P

P

T

B

B

B

B

B

In our first example, If player bets banker every hand, he will make 10 wagers for $10 each for total action of $100  The casino calculates that it will earn $1 = edge (.01) x total wager ($100) from the players total action.  Let’s look at what happens when our player bets banker on every hand.  He loses bets one through four for a total of $40.00 . He pushes on bet five and wins bets 6 through 10.  When we examine the underlying mathematics we see the following:

Total Action = $100.00

Bets Won = 5 ($50.00) - 5% commission for a net win of $47.50

Bets Loss = 4 ($40.00) subtract losses from net wins $47.50 - $40.00 = $7.50 profit.  Here our player risked losing $100 for a win of 7.5% but had to overcome 51% odds to achieve this win.    

In case this isn’t clear, lets look at the same game from the casinos prospective, (remember they get the 51% advantage.)  Let’s say the dealer starts out with $1,000 in chips in his tray. (these chips have zero monetary value outside the casino.)  

1. Our player buys in for $100 and the dealer gives the player $100 worth of chips.  His tray now contains $900 but he has $100 in cash in his drop box. At this point for all practical purposes both parties are even.

2. The player loses the first four bets.  The casino now has $940 in chips in the rack + $100 in the drop box for a total of $1040.00.  If the player has a stop loss and walks away  from the game the casinos hold is $40 that is money you left on the table and is therefore an easy win for the casino.  But for the sake of completing our example, our player continues to play and pushes on hand 5 but wins the next 5 banker bets.  At the end of the game the player “colors up” and receives $107.50 in chips.  The casino now has $892.50 in the tray and $100 in cash in the drop box, this brings the casinos end of game total to $992.50.  In this example, the casinos outcome was  the exact opposite of the player in that it risked $7.50 for the chance to capture $100.  

Now, let’s look at what happens if our player doesn’t like paying the banker commission and bets player on every hand:  The casinos calculation for edge is the same, it will make $1 for every $100  wagered.    Our player wins the first four bets,  pushes on the fifth and then loses the next 5.   When we examine the underlying mathematics we see the following:

Total Action = $100.00

Bets Won = 4 ($40.00) net wins = $40.00

Bets Loss = 5 ($50.00) subtract losses from net wins ($40.00 - $50.00) = -$10.00 net loss.

In this example, the player’s edge comes from the fact that it lost to the banker events.  In this example, the casino got its $1 plus a hold of $9.  I know that I’ve talked about holds but haven’t explained the concept yet so let’s get it out of the way now.  A hold is simply the amount of money the player leaves on the table.  This is usually the result of several things such as; playing too long, going broke during a downswing, hitting a stop loss,  making a huge wager that loses and not being able to sustain that level of play or quitting when behind or down.  These things all increase what is known as a hold.  Which is another way of saying not only did you not win, but you gave the casino back its chips.  To be completely fair to the casino,  they are not in the gambling business as much as they  are in the math and time business that is to say, they are not actively gambling against the players but rather the mathematics of the games give the casino an advantage that would be nice to have as a player.

 

Shoe 2 player Wins

1

2

3

4

5

6

7

8

9

10

P

P

P

P

P

T

B

B

B

B

Let’s look at the math if player bets banker every hand for the above shoe.

Total Action = $100.00

Bets Won = 4 ($40.00) - 5% commission for a net win of $38.00

Bets Loss = 5 ($50.00) subtract losses from net wins ($38.00 - $50.00) = -$12.00 net loss.

In this example, the casino received $2.00 from the commission charged on the banker win and has a hold of $10.00.  If our player had bet player every hand  the outcomes would look like this

Total Action = $100.00

Bets Won = 5 ($50.00)

Bets Loss = 4 ($40.00) subtract losses from net wins ($50.00 - $40.00) = $10.00 net win.

 

Shoe 3  Bank and player Break Even

1

2

3

4

5

6

7

8

9

10

P

P

P

P

P

B

B

B

B

B

Now, let’s look at a couple outcomes where the events cancel each other out.    player bets banker every hand:

Total Action = $100.00

Bets Won = 5 ($50.00) - 5% commissions for a net win of $47.50

Bets Loss = 5 ($50.00) subtract losses from net wins ($47.50 - $50.00) =  -$2.50 net loss.

Notice, that without the commission our player would have broke even but due to the edge, our player finished with a net loss.

If our player bets player every hand:

Total Action = $100.00

Bets Won = 5 ($50.00)

Bets Loss = 5 ($50.00) subtract losses from net wins ($50.00 - $50.00) = $0.00 net win.

Shoe 4 Bank and player Break Even

1

2

3

4

5

6

7

8

9

10

P

P

P

T

T

T

T

B

B

B

One last example,  this one will look similar to the last one except there are more pushes.

If player bets banker every hand

Total Action = $100.00

Bets Won = 3 ($30.00) - 5% commission = $28.50

Bets Loss = 3 ($30.00) subtract losses from net wins ($28.50 - $30.00) = -$1.50 net loss.

If player bets player every hand:

Total Action = $100.00

Bets Won = 3 ($30.00)

Bets Loss = 3 ($30.00) subtract losses from net wins ($30.00 - $30.00) = $0.00 net win.

Now, that you understand how edge functions and  the difference between edge and hold lets look at another related concept that is usually obscured by the action and that is the flow of money. If you go back and look through the examples I provided where I showed one player betting banker and another betting player then imagine that they were both playing the game together you will see that the loser pays the winner.  Most of the time, in the casino, this is what is happening, that is, payouts to the winners are being funded by the losers. The casinos primary function is to facilitate the game and grab some pennies from the action.

Lesson 5  

Understand what it means to risk money to win money and how to calculate your chances of success and failure.

When I first started playing baccarat,  I had an all too common experience, and that is during my first week for playing the game,  I bet player every hand (I was intimidated by the banker commissions) a condition made worse with up to five people betting on my position. During that week,  I was able to net about $230 x 5 = $ 1,150.00  per game this was achieved through a combination of sitting out banker runs and being fortunate enough to encounter player dominant shoes.  So like any gambler who doesn’t know any better,  as well as the many people I talked to regarding their initial attraction to the game, I thought to myself “If I could “make” (see lesson 1) $230 per game every time I play, then If I played multiple games in a day I could increase my “earnings”.  I emphasize the words make and earnings because like most gamblers I was naive in assuming that the time I was investing in playing the game would result in a fixed rate of return.  So to run this particular experiment,  I started playing first thing in the morning and played all day until late at night.  Everything was going well, I netted another $660.00 for a total of $1,810.00. If you’ve been gambling for any amount of time you know what happens next and even if you haven’t, you can probably guess. (I will wait for you to finish laughing).  So the shoe starts out with a pretty solid player streak for the first 20 hands of 80. player = 15 banker =  5. The next 20 hands were the exact opposite with banker going 15 to players 5. The next 20 hands after that hands 41-60 were banker runs and ties,  The next 20 hands after that were more banker runs some ties and only single player events.  The final score was something along the lines of banker = 50 Ties = 15  player = 25.  player lost by 25 points!  The probability of this happening is 1 in 769.   In terms of player response, (see lesson 2)  I panicked and started playing scared, as I had already lost all of the money I won in the this shoe betting against the banker run.  Then, I became despondent  and went on a gamblers tilt that is, I started shoving out larger and larger bets, bets for which I was losing 4 out of 4.  Every time I could win, I got a tie.  It was the worse gambling day of my life.  I went from a positive $2000.00 to negative $2,790.00 which is a $4,600.00 swing in fortune in a single game.  In my last desperate attempt, I wandered to a random table and without even looking at the board, I placed the last $800.00. I had on  player (a bet I fully expected to lose) and won!  After winning that bet, I immediately headed to the cash cage to settle my debt which totaled $1,190.00.  Needless to say, I learned several very valuable lessons from this experience  and  over time, with disciplined play,  I cut my net loss to zero.  During my other field experiments at the tables, testing different betting systems and methods, my net loss would range between $0 which is break even and negative $1,700.00.  Once I got several things figured out, I was able to go from negative $1,190.00 to positive $6,090.00 a swing in fortune of $7,280.00.  This streak lasted for five months straight with an average win of about $200 per game.  I became known amongst some of the players as; “the guy that never loses”, “the professional” and the “the guy with the big money that bets small”.  Well, in a bout of recklessness  I broke my winning streak by doing a few things.  First, I had taken to putting up all of my winnings from a shoe as a single bet  to double my wins.  Most of the time, I lost these bets which means that I broke  even.  Other times, I would split my winnings into two or four bets and would try to double. This resulted in mixed results but usually had me chasing my winnings to break even.  Second,  I tried a new system without properly testing it and it resulted in a $1,000.00 loss that I subconsciously decided that I couldn’t except after such a long winning streak, that I decided to chase it a little bit (something you should never ever do.  DO NOT CHASE YOUR LOSSES YOU WILL ONLY MAKE IT WORSE!)  By chasing my loss i turned a $1000.00 loss into a total loss of  $2,500.00 in a single game. This one game blew away half my winnings.  Third, I blew away the rest of my winnings as well as managed to take a net loss of $800.00 by returning to using a playing method which relies on a tight spread of 1-6  units, (this is the range  between your lowest bet and your highest bet.)  I will get into the math of this later, the good news, is that I have climbed out of the hole and I am marching forward.   The overall, point of me sharing this personal story is twofold;  First, to illustrate that I understand at a personal level the psychological and emotional challenges a gambler faces.  And second, to illustrate that this game allows you to hang yourself therefore, if we could stop hanging ourselves as gamblers and leave it to the math which is the real determinant of our success or failure at the table we would have consistently, more positive experiences.  

Gambling is about choices and every choice you make has consequences. In this lesson we will look at two choices,  First, is establishing a lifetime gambling bankroll.     Second, is how to understand and calculate the risks you are taking when you decide to gamble.

Rule 1:  Never gamble with money you cannot afford to lose! (see lesson 1) I am not saying that when you come to the casino you should expect to lose or try to lose but what I am saying is that the only way you can stay off the slippery slope of chasing your losses,  going on a gamblers tilt, cursing out the staff and generally not having a good time is to play with money you value and need for other things. Therefore, you should never borrow money from your credit cards, take money out of your savings, 401k, or bring your rent money, babies food money, or the money that you’ve spent all week working for to the casino.  Because when you lose it, you will not be able to let it go because your first mistake was using money that you couldn’t afford to lose.

Your gambling budget should consist of money you would have spent in some other capacity, for stuff that you might not need like going to the movies, dinner, your 400th pair of designer shoes or vacation money.  For example, my number is $10,000. It is about what I spend on a really good vacation, which I typically take once a year but for several years I didn’t take the vacations or at least not any that cost me $10,000 so I take one third of my vacation money and use it as my lifetime gambling bankroll.  Mathematically, with disciplined play, a bankroll of this size will allow me to play the casino for approximately 90,000 decisions or 1,125 shoes or 2,812.5 hours.  To put it another way, about 4 months straight if I played 24 hours a day at a cost of roughly $9.00 per game which represents the casinos edge. This doesn’t mean that after that many decisions I’ll be broke, but what it does mean is that by the time I’ve played the casino for 90,000 decisions it would have cost me $9,000.00 which I will pay in two ways, by losses or in terms of reduced winnings definitely a combination of both. (see lesson 4).

If you don’t want to become an institutionalized gambler, you need to pick a number that represents a total fractional amount of your discretionary  wealth and once you lose that amount, then your gambling career is over period. If you have already started gambling which I can imagine that anyone reading this probably has, then I would recommend that you ask the casino for a win loss statement.  because you can’t really play with any sense of accomplishment if you have no idea about how far you are in the hole or ahead.

If you get your statement and find that you are tens of thousands of dollars in the hole, you have two choices:  The first is to accept that your gambling career is over and you will make more money outside of the casino by not continuing to pour every dime you have into trying to recover your losses (you will see why this is a fruitless exercise as soon as I get to the math in this lesson.)  If you can’t stop on your own, you should seek professional help.  The second choice is for action junkies that is, people that like to play more than anything else.  Since it is not really about the money you should switch to a flat betting format to reduce the cost of your game play and save yourself some cash.

As a gambler, once you have determined your maximum lifetime bankroll,  I recommend visiting the credit office and getting setup with a marker which you can use to play when you are at the casino.  This will be safer than bringing cash in and out of the casino.  It will also be cheaper than paying the ATM fees to get access to your money.  If your credit isn’t all that great or you just don’t want to go through all of the hassle of establishing a credit account, the casino will let you set up a FOD (Funds On Deposit) account.  You can put your money in this account and then take some or all of it out during your gaming sessions.  You can also store your open marker and  any winnings you have in this account.   I think that setting this up initially is the best way to go because while you can always get more money, to fund these accounts, having them, can act as a firewall between your other money that you should not be spending in the casino.   Therefore, if you blow through this money and need to fund your accounts again it will be the first clear sign that you are probably on a path that you don’t want to be on.

Let’s get down to business and talk about the math as it relates to your bankroll.  If you will recall from earlier, the casino has a 51% advantage which means that you are at a 49%  disadvantage.  In terms of risk, this translates into the inverse expressed by the following formula:

(Risk     =  Reward) - Edge (1%)

   51%        49%

Risks and rewards are counter balanced that is, you cannot change one side without affecting the other side of the equation.

Casino Advantage

51%

Casino Risk 49%

player Disadvantage

49%

players Risk 51%

In simple terms, you can always lose more than you can win. This affects the size of your bankroll in the following way:  You have to risk proportionally large amounts of money to win less. Let’s start with the underlying function for calculating this risk.

(Chance of Losing Bankroll / Bankroll + What I would Like to Win) = Chance of Success

Subtract your chance of success from 100 and the result will be the chance you will lose the amount of money you are putting at risk first.

In a simple 50/50 game with no house edge your chance of winning $10 before losing $10 can be calculated like so:

$10 / $20 = 50%

So there is a 50% chance that you will lose $10 before you can win $10.  You can increase the confidence of this win by putting more money at risk.   The following table shows several examples of this:

Bankroll Size

Win Target

Chance I will meet Win Target First

Chance I will Lose my Bankroll First

$10

$10

50%

50%

$20

$10

66%

34%

$30

$10

75%

25%

$40

$10

80%

20%

$50

$10

83%

17%

$60

$10

85%

15%

$70

$10

87%

13%

$80

$10

88%

12%

$100

$10

90%

10%

$200

$10

95%

5%

$500

$10

98%

2%

$1000

$10

99%

1%

When you add the casino edge to the calculations the numbers get a little worse.

($10 / $20) - edge( 1%) = 49%  (51% chance you will lose first)

To break even the calculation would be this: ($10.50 / $20.00) = 52%

(48% chance you will lose first)

To profit the calculation, would be this: ($11 / $20) = 55%

(45% chance you will lose first.)

In addition, there are at least three other critical factors that affect the size and effectiveness of your bankroll and they are:

1. Win Target

2. Number of Hands Played

3. Bet Size

For example, the higher your win target relative to your bankroll the less likely you are to reach that win target with multiple bets.   Let’s look at several common “buy-ins” which I will assume are bankrolls or session bankrolls.  I will also assume that most people are going for broke trying to win as much money as they can. Which brings us back to the Maximum Boldness Theory and the math behind it.   Basically, your best chance to double your money comes from placing a single wager because the more you string out the bets, the more you multiply the possible outcomes and therefore your percentage of success starts to drop off.  

The equation of this is:

(49% / the number of bets ) = Percentage of Success of doubling your bankroll. The inverse percentage represents your chance of failure that is, losing your bankroll before you can score a win. The formula for calculating this is (100% - (49% / the numbers of bets ) =  Percentage of Failure). For an example of this concept, let’s say we have a player that starts with a $300 bankroll and would like to double it.   Notice, how his chance of success falls off as he decreases his bet size and makes more bets.

Bankroll

Bets

Bet Size

Chance of Success

Chance of Failure

$300.00

1

$300

49%

51%

2

$150

24%

76%

3

$100

16%

84%

4

$75.00

12%

88%

5

$60.00

9%

91%

6

$50.00

8%

92%

10

$10.00

1%

99%

Another mathematical function of the game is Standard Deviation that is, the amount above or below a specific outcome and I don’t think that most gamblers can appreciate when this is working in their favor, but everyone recognizes when it is not.   When Standard Deviation works in your favor it would be the one and rare instance in which you will be able to win $300 by placing $10 bets and when it works against you, you will lose even though you have done everything correctly.    The following table shows a list of common “buy-ins” along with the corresponding confidence levels of reaching a specified win target.  Learn to recognize when you have won and quit!  It is a fact that 99% of gamblers are ahead at some point during a gambling session, but most don’t recognize it.  Keep this in mind as you review the following table,  the higher the amount of money you are trying to win, greater is the probability you will lose your money first.  The table below shows  your chance of success, the inverse (not shown) is the risk you will lose first.

Win Target

Bankroll

$300

Bankroll

$500

Bankroll

$1000

Bankroll

$1500

Bankroll

$2000

Bankroll

$5000

Bankroll

$10000

$10

96%

98%

99%

99%

99%

99%

99%

$20

93%

96%

98%

98%

99%

99%

99%

$30

90%

94%

97%

98%

98%

99%

99%

$40

88%

92%

96%

97%

98%

99%

99%

$50

85%

90%

95%

96%

97%

99%

99%

$60

83%

89%

94%

96%

97%

98%

99%

$70

81%

87%

93%

95%

96%

98%

99%

$80

78%

86%

92%

94%

96%

98%

99%

$90

76%

84%

91%

94%

95%

98%

99%

$100

75%

83%

90%

93%

95%

98%

99%

$150

66%

76%

86%

90%

93%

97%

99%

$200

60%

71%

83%

86%

90%

96%

98%

$300

50%

62%

76%

83%

86%

94%

97%

$600

33%

45%

62%

71%

76%

89%

94%

$1000

23%

33%

50%

60%

66%

83%

90%

The following table is provided for those who might be $10,000 or more in the hole.  Keep in mind that you are facing a 51% chance that you will only add to your deficit if you are chasing losses.(something you should never do.)  For example, you would need a $100,000 bankroll for a 99% chance to regain $3000 without going broke first.

Win Target

Bankroll

$300

Bankroll

$500

Bankroll

$1000

Bankroll

$1500

Bankroll

$2000

Bankroll

$5000

Bankroll

$10000

$3000

9%

14%

25%

33%

40%

62%

76%

$5000

5%

9%

16%

23%

28%

50%

66%

$10000

2%

4%

9%

13%

16%

33%

50%

$20000

1%

2%

4%

6%

9%

20%

33%

$50000

0%

0%

1%

2%

3%

9%

16%

$80000

0%

0%

1%

1%

2%

5%

11%

$100000

0%

0%

0%

1%

1%

4%

9%

$200000

0%

0%

0%

0%

0%

2%

4%

One last table before we move along,  this table is for the people who have buy-ins of less than $300.00

Win Target

Bankroll

$50

Bankroll

$100

Bankroll

$150

Bankroll

$200

Bankroll

$250

$10

83%

90%

93%

95%

96%

$20

71%

83%

88%

90%

92%

$30

62%

76%

83%

86%

89%

$40

55%

71%

78%

83%

86%

$50

50%

66%

75%

80%

83%

$60

45%

62%

71%

76%

80%

$70

41%

58%

68%

74%

78%

$80

38%

55%

65%

71%

75%

$90

35%

52%

62%

68%

73%

$100

33%

50%

60%

66%

71%

So far, I have covered the importance of establishing a lifetime gambling bankroll,  and I have talked a little bit about bankroll sizing and the risks associated with gambling and how to calculate those risks.  The last relationship we need to examine to complete our discussion is that of Bet to Bankroll Ratios.  This should be a pretty straightforward concept however, when I’ve watched people play at the tables, their bet selections appear to be largely random and mostly based on some confidence level they place on a particular hand.  For example, if they think they will lose the bet, they bet small,  if they like the bet, they bet big.    If they are chasing losses they are betting big. It should come as no surprise that the size of your bets  has a significant impact on the number of chances you can make in search of a win before all of your money is gone.  

The smaller the bets, the longer your bankroll survives a losing streak.  The bigger the bets, the sooner you run out of money.  

Regarding Betting Systems or (methods as I like to call them) are nothing more than a series of rules which dictate how one should bet based on a given condition.  Betting systems do not change the underlying mathematics of the game, but they do significantly alter the player’s experience, we will look at how this works shortly, but first, let’s master the concept of units.   Units is a way of dividing a bankroll. Generally, there is a one to one ratio between the table minimum and the unit value.  Therefore, if the table minimum is $10 then a unit is $10  The following table takes various different bankrolls and breaks them into units.

$10 = 1 Unit

Dollars

Units

$50

5

$100

10

$150

15

$200

20

$250

25

$300

30

$500

50

$1000

100

$1500

150

$2000

200

$5000

500

$10000

1000

Betting systems (or methods as I like to call them) generally fall into a couple of categories, that is, additive or multiplicative.   Additive systems, typically add or subtract units whereas multiplicative systems, multiply units.  The most famous and effective multiplicative system is the Martingale and the anti-Martingale.  Betting systems are essentially trade offs between either small frequent wins and occasional big losses, or small frequent losses and occasional big wins.    I will summarize these concepts in the following table.

Betting Systems

Description

Flat

Always bet the same amount

Press on Win

Bet more after you win

Press on Loss

Bet more if you lose

Press if Ahead

Bet more if you are up

Press if behind

Bet more if you are down.

Betting systems are either positive or negative.  Positive systems increase bets when winning and negative systems increase bets when losing.   In order to appreciate how betting systems alter the player’s experience without impacting the underlying mathematics, I will present several examples that illustrate this. Because Baccarat is a game that requires zero skill to play, I have not committed any time to  talking about things one might do to win.  Instead I’ve focused on concepts related to the mathematics of the game and its relationship to your money which is the only thing that matters at the end of the day.  In that spirit, Baccarat is nothing more than a series of Win/Loss patterns or hits or misses.  When you miss, the money goes one way, from you to the dealers tray.  When you hit, your money comes back to you along with an equal amount of money from the dealers tray.  In fact, when you think about it, the game is much like a slot machine where the jackpot is determined by the amount of money you put in.  If you win, you will get your money back plus the jackpot amount.   If you lose, your money is gone.  When you feed more money into the machine (or game), you are playing an entirely different game from the one you just played, and one that is going to be different from the one you are going to play next, this concept is known as the the law of independent events. Therefore, there is no relationship between one hand to the next.

For our examples we will use W to equal Win and L to equal Loss.    We will represent the money applied to the game in terms of units and finally, we will show the bust points (when you go broke) of various bankrolls based on the betting system used.   To keep everything as simple as possible but also  comprehensive, we will take 20 hands which represents one quarter of a shoe and we will construct 8 different patterns and then show how various betting systems perform under the same conditions or (underlying mathematics.)

Our test shoes will consist of the following patterns.  

1. All Losses

2. All Wins

3. Losses Followed by Wins

4. Wins Followed by Losses

5. Wins Surrounded by Losses

6. Losses Surrounded by Wins

7. Wins and Losses Evenly distributed

8. Clustered Wins and Losses

For betting progressions we will test the following systems:

1. Flat betting

2. Martingale (negative progression, multiplicative)

3. Anti-Martingale (positive progression, multiplicative)

4. D'Alembert (both positive/negative or pyramid, additive)

5. Parlay (positive, multiplicative / additive)

6. Paroli (positive, multiplicative / additive)

7. 1-3-2-6 (additive, tight-spread progression)

8. U1D2M2 (additive, variation of D’Alembert)

 

All betting systems have strengths and weaknesses and the randomness of the game can expose you to both.  However, it is better to find out what those weaknesses are before you put real money on the line.   In our examples, there will be 12 players at the table each with starting bankrolls represented by the table below.

Starting Bankrolls

Dollars

Units

(player 1) $50

5

(player 2) $100

10

(player 3) $150

15

(player 4) $200

20

(player 5) $250

25

(player 6) $300

30

(player 7) $500

50

(player 8) $1000

100

(player 9) $1500

150

(player 10) $2000

200

(player 11) $5000

500

(player 12) $10000

1000

   

System: Flat Bet

Rules:  Always bet 1 unit

Pattern #1 All Losses

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

L

L

L

L

L

L

L

L

L

L

L

L

L

L

L

L

L

L

L

L

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

B

B

B

B

Results of Shoe #1 All Losses

player No

Result

1

Goes broke at hand 5

2

Goes broke at hand 10

3

Goes broke at hand 15

4

Goes broke at hand 20

5

Losses 75% of bankroll

6

Losses 66% of bankroll

7

Losses 40% of bankroll

8

Losses 20% of bankroll

9

Losses 13% of bankroll

10

Losses 10% of bankroll

11

Losses 4% of bankroll

12

Losses 2% of bankroll

The above chart shows several things first, all players lost $200 which is a table hold of $2,400  this is a function of the underlying mathematics. Second,  the size of your initial bankroll determines your ability  to survive downswings or losing streaks.  The higher your bankroll, the smaller the hit you take.  However, this can be a double-edge sword, precisely because you have a higher bankroll, you are more likely to bet against an adverse condition longer than someone who can’t afford to and 89% of the time it will work out. But roughly 11% of the time you will lose up to 3x as much.  For example, if you were player 12 with a 1000 unit bankroll ($10,000) and you lost 60 hands in a row while this loss would only represent 6% of your bankroll the dollar amount would be a loss of $600.00.  

System: Flat Bet

Rules:  Always bet 1 unit

Pattern #2 All Wins

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

W

W

W

W

W

W

W

W

W

W

W

W

W

W

W

W

W

W

W

W

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

Results of Shoe #2 All Wins:

The outcome of this shoe is all players win $200.  As a percentage of bankroll, players with lower bankrolls do better (players 1-4).  players 5-12 have gain percentages that mirror their  previous loss percentages.  For example, in shoe #1 player 12 had a loss of 2% now he had a gain of 2% so on and so forth.

Let’s move on to our next pattern, Losses followed by Wins.

System: Flat Bet

Rules: Always bet 1 unit

Pattern:#3 Losses Followed by Wins

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

L

L

L

L

L

L

L

L

L

L

W

W

W

W

W

W

W

W

W

W

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

B

B

   

Results of Shoe #3 Losses Followed by Wins

player No.

Result

1

player goes broke at hand 5

2

player goes broke at hand 10

3

player wins $10 Drawdown (66%)

4

player wins $10 Drawdown (50%)

5

player wins $10 Drawdown (40%)

6

player wins $10 Drawdown (33%)

7

player wins $10 Drawdown (20%)

8

player wins $10 Drawdown (10%)

9

player wins $10 Drawdown (6%)

10

player wins $10 Drawdown (5%)

11

player wins $10 Drawdown (2%)

12

player wins $10 Drawdown (1%)

The drawdown in the results above show how low the bankrolls got before things turned around.  Let’s go to shoe number 4 Wins followed by Losses.

System: Flat Bet

Rules: Always bet 1 unit

Pattern:#4 Wins Followed by Losses

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

W

W

W

W

W

W

W

W

W

W

L

L

L

L

L

L

L

L

L

L

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

In this scenario, none of our players go bust, but they all break even.  This is because the wins cushioned them from the losses and there were just enough losses to chew up the winnings.  Let’s continue on to our next pattern.

System: Flat Bet

Rules: Always bet 1 unit

Pattern:#5 Wins Surrounded by Losses

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

L

L

L

L

L

W

W

W

W

W

W

W

W

W

W

L

L

L

L

L

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

B

0

5

0

In the above scenario, the player (1) with the lowest bankroll (5 units) goes bust at hand 5 everyone else breaks even at hand 10 by hand 15 all players are up 5 units but by hand 20 all players have broke even.  Our next pattern is the opposite of the previous one.

System: Flat Bet

Rules: Always bet 1 unit

Pattern:#6 Losses Surrounded by Wins

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

W

W

W

W

W

L

L

L

L

L

L

L

L

L

L

W

W

W

W

W

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

5

0

B

0

In the above scenario all players are up by 5 units by hand 5 but by hand 10 they are all even, by hand 15 the player with the smallest bankroll goes bust and by hand 20 the remaining players break even.  Let’s move on to our next pattern.

System: Flat bet

Rules:  Always bet 1 unit

Pattern:#7 Wins and Losses Evenly Distributed

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

W

L

W

L

W

L

W

L

W

L

W

L

W

L

W

L

W

L

W

L

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

The net result of the above sequence is that all players break even.

 

System: Flat bet

Rules: Always bet 1 unit

Pattern#8  Wins and Losses are Clustered

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

W

W

L

L

L

L

W

W

W

W

W

L

W

W

W

L

L

L

W

L

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

0

0

 

The net result of the above sequence is that all players make $20. However, before I go through what happens with the other bet progressions, now is a good time to talk about another important concept and that is, the concept of Volatility.  Baccarat is a game that is full of volatility at every level. For instance; there is volatility from hand to hand, there is volatility in every 10 to 20 hands of a game, there is volatility in every half game, that is, every 40 of 80 hands and then there is volatility from game to game, from day to day and from week to week and month to month.  To help you understand this concept,  I will provide you with the following diagram so that you can see the concept visually, but basically, volatility is a sine wave and when you play Baccarat you are riding the wave, or playing against it.  The casinos mathematical edge is on the center line (not shown in diagram).  Every time money crosses that line, they grab pennies.   Therefore, you win because money comes towards you, and you lose money when it is flowing in the opposite direction.

Example of Volatility:

Just about every player of the game experiences volatility in terms of bankroll swings ( both up and down) that is, wins that turn into losses and losses that turn into wins. For example, I have programs that let me graph the outcomes of shoes.  I can also graph betting progressions and when I overlay the betting progressions on top of the shoe outcomes, I get graphs that change sometimes dramatically, this is because betting progressions increase volatility.  To understand this concept more fully let’s go back to an elementary math concept of the number line for positive and negative integers.  Pictured below:  When you win bets, the scale tips towards the positive end of the scale and when you lose bets it tips towards the negative end of the scale.  If your wins and losses are equal you get zero.   Betting systems attempt to influence this process by pushing you to the right of zero as much as possible and then they might work to slow your slide back down to zero.   Negative progressions, attempt to slingshot you from left of zero to the right of it. They do this by loading up the negative side of the scale with lots of money so much so that once you get a win you are thrust back into positive territory.  Both are valid approaches if you have an endless amount of money, or when your win targets are small, but play reckless, have an inadequate bankroll, a win target that is too high and the most likely result is that you will go broke first.

Example of the Money Line In Baccarat

Now that you understand the concept of volatility lets move on to look at how bet progressions increase volatility.  We will pick up where we left off.  We have 12 players at the table each with bankrolls that are represented by the following range  in units [5, 10, 15, 20, 25, 30, 50, 100, 150, 200, 500, and 1000].   These players will play their progressions across the same eight patterns we used when analyzing flat betting.  Because I need to write larger numbers into the fields  we will chop the result tables in half that is, I will present 20 hands of game play as two sets of 10 instead of one set of 20.  Otherwise, everything else is the same.

System: Martingale

Rules: Always bet 1 unit, Double on Loss

Pattern:#1 All Losses

1

2

3

4

5

6

7

8

9

10

L

L

L

L

L

L

L

L

L

L

1

2

4

8

16

32

64

128

256

489

B

B

B

B

B

B

B

B

11

12

13

14

15

16

17

18

19

20

1

2

3

4

5

6

7

8

9

10

L

L

L

L

L

L

L

L

L

L

11

12

13

14

15

16

17

18

19

20

Results of Shoe #1 All Losses Using Martingale Betting System

player No.

Result

1

Goes broke at hand 3

2

Goes broke at hand 4

3

Goes broke at hand 4

4

Goes broke at hand 5

5

Goes broke at hand 5

6

Goes broke at hand 5

7

Goes broke at hand 6

8

Goes broke at hand 7

9

Goes broke at hand 8

10

Goes broke at hand 8

11

Goes broke at hand 9

12

Goes broke at hand 10

As you can see from the results above the Martingales biggest strength (a single win recovers all past losses, plus adds a profit of 1 unit) is also its biggest weakness. This is because consecutive losing streaks will cause steep and dramatic bankroll drawdowns. player psychology also plays a major role.  For example, it is easy to look at the shoe after the fact and say well it is stupid to bet against a streak but this is hindsight bias, (see lesson 3) as losing streaks can come in many forms including guessing the wrong outcomes in a neutral shoe, or jumping from table to table and missing several bets in a row.  The more bets you miss the more your confidence goes down both mathematically and psychologically.  The table hold for 12 gamblers busting playing the Martingale is $21,050.00 which is the combined bankroll of all of our players.

Let’s continue our analysis of the system by having our players to play it against other patterns.

System: Martingale

Rules: Always bet 1 unit, Double on Loss

Pattern:#2 All Wins

1

2

3

4

5

6

7

8

9

10

W

W

W

W

W

W

W

W

W

W

1

1

1

1

1

1

1

1

1

1

11

12

13

14

15

16

17

18

19

20

W

W

W

W

W

W

W

W

W

W

1

1

1

1

1

1

1

1

1

1

The net result of shoe #2 all of our players win $200.

System: Martingale

Rules: Always bet 1 unit, Double on Loss

Pattern:#3 Losses Followed By Wins

1

2

3

4

5

6

7

8

9

10

L

L

L

L

L

L

L

L

L

L

1

2

4

8

16

32

64

128

256

489

11

12

13

14

15

16

17

18

19

20

W

W

W

W

W

W

W

W

W

W

In the above scenario all of our players go broke before they can achieve a win.  Let’s move on to our next pattern which is Wins followed by Losses.

System: Martingale

Rules: Always bet 1 unit, Double on Loss

Pattern:#4 Wins Followed by Losses

1

2

3

4

5

6

7

8

9

10

W

W

W

W

W

W

W

W

W

W

1

1

1

1

1

1

1

1

1

1

11

12

13

14

15

16

17

18

19

20

L

L

L

L

L

L

L

L

L

L

1

2

4

8

16

32

64

128

256

512

B

B

B

B

B

B

B

Results of Shoe #4 Wins Followed by Losses

player No.

Result

1

Goes broke at hand 14

2

Goes broke at hand 15

3

Goes broke at hand 15

4

Goes broke at hand 15

5

Goes broke at hand 16

6

Goes broke at hand 16

7

Goes broke at hand 16

8

Goes broke at hand 17

9

Goes broke at hand 18

10

Goes broke at hand 18

11

Goes broke at hand 19

12

Goes broke at hand 20

In the above scenario the winning streak only added 10 units to each players starting bankroll.  It took only four losing bets to give up these gains and after that, all players went broke.  

System: Martingale

Rules: Always bet 1 unit, Double on Loss

Pattern:#5 Wins Surrounded by Losses

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

L

L

L

L

L

W

W

W

W

W

W

W

W

W

W

L

L

L

L

L

1

2

4

8

16

32

1

1

1

1

1

1

1

1

1

1

2

4

8

16

B

B

B

B

Results of Shoe #5 Wins Surrounded by Losses Using Martingale Betting System

player No.

Result

1

Goes broke at hand 3

2

Goes broke at hand 4

3

Goes broke at hand 4

4

Goes broke at hand 5

5

Goes broke at hand 5

6

Goes broke at hand 20 *

7

Loss of 20 units

8

Loss of 20 units

9

Loss of 20 units

10

Loss of 20 units

11

Loss of 20 units

12

Loss of 20 units

* player 6 started with a bankroll of 50 units but by hand 6 he only had enough money left to bet 19 units and not the required 32 units the Martingale requires so he goes for it and makes an all in bet which he wins. His total bankroll now stands at 18 units.  He picks up another 10 units from the winning streak to bring his total to 28 units, but then he finally goes broke at hand 20.  The rest of our players players 7-12 have big enough bankrolls  to make the required bets and survive the downswings.  The game ends with them all taking a 20 unit loss.

Now let’s look at what happens when the losses are surrounded by wins

System: Martingale

Rules: Always bet 1 unit, Double on Loss

Pattern:#6 Losses surrounded by Wins

1

2

3

4

5

6

7

8

9

10

W

W

W

W

W

L

L

L

L

L

1

1

1

1

1

1

2

4

8

16

B

B

11

12

13

14

15

16

17

18

19

20

L

L

L

L

L

W

W

W

W

W

32

64

128

256

512

B

B

B

B

B

Shoe #6 Losses Surrounded by Wins Martingale

player No.

Result

1

Goes broke at hand 9

2

Goes broke at hand 10

3

Goes broke at hand 10

4

Goes broke at hand 10

5

Goes broke at hand 10

6

Goes broke at hand 11

7

Goes broke at hand 11

8

Goes broke at hand 12

9

Goes broke at hand 13

10

Goes broke at hand 13

11

Goes broke at hand 14

12

Goes broke at hand 15

.

System: Martingale

Rules: Always bet 1 unit, Double on Loss

Pattern:#7 Wins and Losses evenly distributed

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

W

L

W

L

W

L

W

L

W

L

W

L

W

L

W

L

W

L

W

L

1

1

2

1

2

1

2

1

2

1

2

1

2

1

2

1

2

1

2

1

In the above scenario, each of our players finished ahead by 9 units or $90.00  Let’s move on to our final pattern of Wins and Losses Clustered.  

 

System: Martingale

Rules: Always bet 1 unit, Double on Loss

Pattern:#8 Wins and Losses Clustered

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

W

W

L

L

L

L

W

W

W

W

W

L

W

W

W

L

L

L

W

L

1

1

1

2

4

8

16

1

1

1

1

1

2

1

1

1

2

4

8

1

B

B

Analysis of shoe #8 Wins and Losses Clustered using the Martingale.   The previous shoes (1-6) all showed level of volatility that lasted over several hands that is, 5-10 hands.  Shoe #7 showed very high volatility (consistently choppy shoe) where the volatility can be represented by a zigzag pattern.  However, shoe number #8 contains volatility that is of varying lengths.  The vast majority of the shoes players encounter will be of this type.  It will be much clearer to explain what happens by using a combination of narrative and  underlying math to walk you through what happens to each player's bankroll as a result of the aforementioned shoe.  First, lets walk through the underlying mathematics based on our bet selection use the table above as a reference:

1. We win our first two hands and pick up 2 units

2. We encounter a losing streak that lasts for 4 hands and we win on the 5th hand.

3. We encounter another winning streak that last for three hands.

4. This is followed by a Win/Loss which cancel each other out for a net gain of zero

5. We encounter another winning streak of 3 hands which allows us to pick up 3 units.

6. This is followed by a losing streak that last for 3 hands we win at hand 19 only to lose at hand 20.

The math looks like this:

SBR = Starting Bankroll

() = we had to remove from our bankroll to bet but we won.

SBR +2 [ -1 -2 -4 -8 (-16) = -31 + 32] + 3 + 3 [+1 + -1] = 0  + [-1 -2 -4 -(8) -15  + 16]

-1. The net result of this string of numbers is that each player either goes broke, suffers a net loss or win $90.00.

Session Analysis for player #1

1. Starting bankroll is 5 units.

2. Wins 2 hands bankroll is now 7 units

3. Bet 1 unit and loses (hand 3) bankroll is now 6 units

4. Bet 2 units and loses (hand 4) bankroll is now 4 units

5. Bet 4 units and loses player goes broke at hand 5

Session Analysis for player #2

1. Starting bankroll is 10 units

2. Wins 2 hands bankroll is now 12 units

3. Bet 1 unit and loses (hand 3) bankroll is now 11 units

4. Bet 2 units and loses (hand 4) bankroll is now 9 unites

5. Bet 4 units and loses (hand 5) bankroll is now 5 units

6. Bet 5 units and loses (hand 6) required bet was 8 units (player goes broke)

Session Analysis for player #3

1. Starting bankroll is 15 units

2. Wins 2 hands bankroll is now 17 units

3. Bet 1 unit and loses (hand 3) bankroll is now 16 units

4. Bet 2 units and loses (hand 4) bankroll is now 14 units

5. Bet 4 units and loses (hand 5) bankroll is now 10 units

6. Bet 8 units and loses (hand 6) bankroll is now 2 units.

7. Bet 2 units and wins (hand 7) required bet was 16 units bankroll is now 4 units

8. Wins a total of 6 units by (hand 15) bankroll is now  bankroll is now 10 units

9. Bet 1 unit and loses (hand 16) bankroll is now 9 units

10. Bet 2 units and loses (hand 17) bankroll is now 7 units.

11. Bet 4 units and loses (hand 18) bankroll is now 3 units.

12. bet 3 units and wins (hand 19) required bet was 8 bankroll is now 6 units.

13. Bet 1 unit and loses (hand 20) bankroll is now 5 units.  (lost 66% of bankroll)

Session Analysis for player #4

1. Starting bankroll is 20 units

2. Wins 2 hands bankroll is now 22 units

3. Bet 1 unit and loses (hand 3) bankroll is now 21 units

4. Bet 2 units and loses (hand 4) bankroll is now 19 units

5. Bet 4 units and loses (hand 5) bankroll is now 15 units

6. Bet 8 units and loses (hand 6) bankroll is now 7 units

7. Bet 7 units and wins (hand 7) required bet was 16 bankroll is now 14 units

8. Wins a total of 6 units by (hand 15) bankroll is now 20 units

9. Bet 1 unit and loses (hand 16) bankroll is now 19 units

10. Bet 2 units and loses (hand 17) bankroll is now 17 units.

11. Bet 4 units and loses (hand 18) bankroll is now 13 units.

12. Bet 8 units and wins (hand 19) bankroll is now 21 units.

13. Bet 1 unit and loses (hand 20) bankroll is 20 units (player breaks even.)

Session Analysis for player #5

1. Starting bankroll is 25 units.

2. Wins 2 hands bankroll is now 27 units

3. Bet 1 unit and loses (hand 3) bankroll is now 26 units

4. Bet 2 units and loses (hand 4) bankroll is now 24 units

5. Bet 4 units and loses (hand 5) bankroll is now 20 units

6. Bet 8 units and loses (hand 6) bankroll is now 12 units

7. Bet 12 units and and wins (hand 7) required bet was 16 bankroll is now 24 units

8. Wins a total of 6 units by (hand 15) bankroll is now 30 units

9. Bet 1 unit and loses (hand 16) bankroll is now 29 units

10. Bet 2 units and loses (hand 17) bankroll is now 27 units

11. Bet 4 units and loses (hand 18 ) bankroll is now 23 units

12. Bet 8 units and wins (hand 19) bankroll is now 31 units

13 Bet 1 unit and lose (hand 20) bankroll is now 30 units (player shows 20% profit)

Session Analysis for player #6

1. Starting bankroll is 30 units.

2. Wins 2 hands bankroll is now 32 units.

3. Bet 1 unit and loses (hand 3) bankroll is now 31 units

4. Bet 2 units and loses (hand 4) bankroll is now 28 units

5. Bet 4 units and loses (hand 5) bankroll is now 24 units

6. Bet 8 units and loses (hand 6) bankroll is now 16 units

7. Bet 16 units and loses (hand 7) bankroll is now 32 units

8. Wins a total of 6 units by (hand 15) bankroll is now 38 units

9. Bet 1 unit and loses (hand 16) bankroll is now 37 units

10. Bet 2 units and loses (hand 17) bankroll is now 35 units

11. Bet 4 units and loses (hand 18) bankroll is now 31 units

12. Bet 8 units and wins (hand 19) bankroll is now 39 units (player shows a 24% profit)

The rest of our players (7-12) will show results similar to player #6 as they all have big enough bankrolls to make all of the required bets.  However, their percentage gained will drop off relative to the size of their starting bankrolls.  I know that I hit you with a lot of math in this lesson, but I wanted to illustrate  how volatility, bankroll size and bet selection influence a player's experience at the table.  As you can see from the examples I have presented so far,  while all of our players, played the same tables and made basically the same betting decisions their outcomes varied some in large part due to bankroll limitations. I also wanted to show that bet selection doesn’t affect the underlying mathematics of the game.  We did this by looking at two different betting progressions (flat betting and the Martingale).  I will review the other betting selections in a different section of the book but I would like to wrap up this lesson by giving you a visual representation of the volatility present in the shoes I have used as a basis for my tests in all of the aforementioned examples.  I should also mention, that I will use these  same shoes for testing the other betting systems I listed earlier.

Shoe #1 and Shoe #2 were two shoes that were constructed from volatility that had a duration of 20 hands. The following diagram visually represents the first two test shoes.

The next shoe (Shoe 3) describe as Losses followed by wins where the volatility lasted exactly 10 hands is depicted in the following diagram:

Shoe #4 Wins followed by losses in which the volatility lasts for 10 hands is depicted in the following diagram:

The next diagram depicts shoe #5 Wins Surrounded by Losses in which the duration of the losses were for 5 hands and the duration of wins were for 10 hands:

Shoe #6 Losses Surround by Wins is just the opposite and is depicted below:

Our next shoe is shoe #7 which exhibits very high volatility (choppy) described as wins and losses evenly distributed.  This is pictured below:

Shoe #8  Is a shoe that consists of variable length volatility that is, where the wins and losses are of differing lengths such as; 2 wins, 4 losses, 5 wins, 1 loss , 3 wins, 3 losses, 1 win and  1 loss etc.  Volatility for shoe #8 is pictured below:

In this lesson you learned a lot about the underlying mathematics of the game and the concept of volatility.  You learned what it means to put your money at risk and how to calculate those risks.  You learned that betting progressions don’t change the underlying mathematics of the game but they do significantly alter the players experience of the game. You learned the importance of having a properly sized bankroll to support your method of play and to survive the associated down swings.

Chapter 6

Game Characteristics

“Those who cannot remember the past are condemned to repeat it.” 

- George Santayana

 

In this section I want to focus on a few concepts, the first one is what you should be paying attention to when playing Baccarat.  A lot of players spend time tracking hands and card counts but you already know  that much of this is a waste of time especially if doing so is in anyway related to determining what the next hand is going to be, as no one can see around corners.  However, what you should do is set up a card and keep copies of the shoes you encounter in the casino. You should keep these cards for your records.  These cards can be used for several useful purposes such as;

1. To serve as a record of the volatility of the shoes you encounter.

2. You can use them to test betting strategies and approaches (both tactile and logical  execution)  Let me explain tactile and logical execution,  tactile execution would involve you practicing with actual chips your betting strategy whereas, logical execution means to practice your betting strategy on paper using simple arithmetics.

Some may think that this is a waste of time, but I can assure you that it is not and you will see why soon.  Besides, you need something to do while you are sitting at the table for 2 hours other than to watch the hands come out.  Eventually, you won’t care (how) you win or lose, but rather, what that win or loss means to your money and what you are going to do next.

This brings us to the second thing you should be tracking when playing the game, and that is your money.  The flow of your money (I will show you how to plot this). Provides many clues about the volatility of the game you are playing (refer to the graphs at the end of the last section).  For instance, if you are playing and the overall trend is that you are winning despite a few losing hands then the volatility is positive and you can expect this  to be followed by negative volatility. Conversely, if you are playing  and the overall trend is you are losing, despite winning a few hands then, the volatility is negative and you can expect this to be followed by positive volatility.  This is the only thing you can place any real confidence in, however, here is where it gets tricky, you will never be able to determine how many hands you will have to wait for this to happen and your ability to survive this downswing of unknown duration will largely be a function of your bankroll size, your betting spread and the method you are using to reach your win goal. Finally, you will learn that it is not what happens as much as how.

Lesson 6

Understanding the Game Characteristics

“In Baccarat, it is not about what happens, but how.” -- Lee Evans

The first concept we want to cover is game boundaries, game boundaries is just another way of saying what defines a game, how many hands.  For Baccarat it is 80 hands and it takes about two hours to play a game.  I call anything more than a few hands a long game. Therefore, a short game is 5 or less hands.  Most people sitting at the tables that are standing and betting for long periods of time are playing a long game.  The big betting table jumpers are playing a short game (at least they are when they place 1-2 bets at a table). They are playing a long game too, but some of them don’t realize it.  Most of the big betting table jumpers are playing one of two systems 1) The Martingale (double on loss) or 2) the Anti-Martingale (double on win).  I just want you to understand what you are seeing when you see these guys walk up to the table and place a $2,000 bet and then disappear for a while.  

Back to game boundaries and how to record them,  I have tried many different card layouts but the most efficient layout is to break the 80 hand game into 4 quarters of 20 hands each.  This will give you a good overall view of the volatility and any skews created by the tie hands.  The casino provides cards that are on graph paper and you should set your cards by orienting them the long way and then starting from the left fill in the top row of boxes 1 through 20,  skip two lines this will take you to row 4 and write in 1 through 20 again, skip two lines, this will take you to row 7 and write in 1 through 20 gain.  This represents the first three quarters of the game (60 hands) for the  last 20 hands of the game, start at row one and write 1 through 10 in the remaining space and then skip to row 4 and write 11-20.  You should date this card and label it with the shoe number.  For example, if this is your first shoe you should call the card Shoe #1 so on and so forth.  You are going to use this card to make a permanent record of the tote board.  The numbers that you wrote on the card are the hand numbers.  The first blank line right under the numbers is for the banker events, every time the banker wins a hand you should put an “X”.  The next line is for the player events, every time the player wins a hand you should put an “X”.  If there are ties,  you should draw a vertical line through both the banker and the player lines. Below is an example of what a complete card looks like (this card represents a real shoe I played at the Rivers Casino in Des Plaines, Illinois).  The grid is 20 wide by 12 long.  Most of the time the yellow card indicating one more hand  until the end of the shoe, should come out at hand 19 in the fourth quarter of the game (really hand 79).  If the game is going to end early, this card may come out after hand 15 in the fourth quarter (hand 75).  In some instances, the game will be a little longer than 80 hands and you can use any free space left on the card to record the overflow.

Baccarat Game Boundaries  (Rivers S5 01/XX/2011)

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

X

X

X

|

X

X

X

X

X

X

X

X

X

X

X

|

X

X

X

X

X

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

|

X

X

X

X

X

X

|

X

|

X

X

X

X

X

X

X

X

X

X

|

X

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

X

|

X

X

X

X

X

X

X

X

X

X

X

X

X

X

|

X

X

X

X

Remember, the above card captures the outcome of the game and nothing else.   However, once you impose order on this randomness,  several characteristics emerge such as:

1. Event Distribution (how the game is balanced between banker and player events).

2. Volatility (the frequency of shifts between banker and player events.)

3. The overall characteristic of the shoe that is, choppy, streaky, neutral, player dominant, banker dominant.

Let’s look at each one in turn starting with Event Distribution.  We measure Event Distribution at every quarter of the game by tallying the total banker events vs the total player events.  Finally, we tally the totals for the entire game like so:

Quarter

banker

player

1

9

10

2

10

10

3

7

11

4

10

9

Total

36

40

The above table tells us several things about the shoe for instance, in the first quarter of the game player beat banker by one point. This was due to a tie at hand 9  I will talk about how ties skew the results shortly and how you can use this information to make educated guesses.  In the second quarter of the game, banker and player events were balanced.  In the third quarter of the  game player beat banker by 4 points, where two of these were due to ties at hands (1 and 18). Finally, in the fourth quarter of the game, banker beat player by one point.  The net result is player wins by 4 points.

Let’s talk about ties, ties skew the game by putting one hand (banker or player ) at a disadvantage while giving the other hand an advantage. You can usually tell which by the following, If the tie is putting you at a disadvantage, then you will push on a hand you needed to win.  If the tie is providing you with an advantage, then you will push on a hand instead of losing.  In lopsided shoes, banker dominant or player dominate shoes the tie counts consistently against one of the sides. In neutral shoes, it will switch between the sides.

The following is an assertion that is made from observation which may or may not be supported by the mathematics. Ties can provide you with clues about the shift in volatility if you can read them correctly.  If you will recall from our previous lessons what players call luck is really volatility and some players don’t like to play after a tie because they think that ties “mess up the shoe” while there is a lot of superstition in gambling, I think that the players are onto something when it comes to ties.  Here’s my assertion, shoes would largely come out even if there were no ties that is, the endgame Event Distribution would show scores like 40 bankers to 40 players or 35 bankers to 35 players etc.  Shoes can still show these scores if the distribution of ties is equitable that is, that they amount to an even number or an odd number that is small enough to not take away events from either player or banker to cause the shoe to be lopsided. However, most of the time, ties skew the results as the vast majority of shoes contain at least 7 or 8 ties. Let me draw a mental picture of this,  Let’s say we have tube and we can fit exactly 80 marbles into this tube, we have 40 red marbles and we have 40 green marbles and 15 blue marbles.  Our red marbles will represent the player hands, our green marbles are for the banker hand and our blue marbles are for the ties.  

So we start to fill our tube like so:

Slot Number

Marbles

1

Red

2

Green

3

Green

4

Red

5

Blue

6

Blue

7

Blue

8

Blue

9

Blue

10

Red

11

Green

12

Green

13

Blue

14

Blue

15

Green

16

Green

17

Blue

18

Blue

19

Blue

When we tally the results we get:

6 Green (bankers) to 3 Red (players) to 10 Blue (Ties)   You can see a couple of things here first of which the player hands are being disadvantaged by the ties.  So when you look at the tote board when playing Baccarat and you see:

banker 6 Ties 10 and player 3  Gamblers will start betting that the player will catch up.  This is  a logical assumption.  However, it is very rare (but not impossible for one side to have a higher number when starting only to be outpaced by the other side during the game) but what usually happens as you will see when playing, is that once one side has the lead, the side that is ahead usually stays ahead by a fixed ratio for the duration of the game.  In other words, if you add the ties to the lower of the two numbers on the tote board, (in our example to the player hands) then you get player 13 banker 6 so it is the banker that is going to go on the run to catch up to the players number + the ties.  Once you can establish the fixed ratio that is being maintained, it will seem like magic that you know exactly where to place your money and when.  In essence, what you are really doing, is riding the underlying wave of volatility.  For example, let’s say a shoe starts out: BPBBBPBBPBBB and the tote board shows banker 10 player 3 (a point difference of 7) let’s say that you know that 7 is the point ratio between the two hands, you also know at this point that the banker pulls ahead first and then the player follows.  The ratio is important because as long as the ratio holds, the hand that is behind will not advance beyond this point difference before the other side moves to maintain its lead.  The simplest way I can describe this bit of pseudoscience is to say that it is like watching stop and go traffic where some random car is defined as my reference point for leader, the cars in between are the ratio and the car at the end of the chain is my reference point for follower. But therein lies the rub, you are ultimately forced back into a binary decision of matching the unfolding of hands in groups and when you are correct, people will think that you are some kind of Baccarat master but when you are wrong, you can end up on the opposite side of things and people will start to bet against you because you are “unlucky.”

 

Getting back to our card,  the next thing you will see is a literal graph of the volatility between hands.  For example, We know that the top row of our card contains the hand numbers and the first line under the hand numbers is the banker line and the line below that is the player line.  If you use the line that is separating the banker events from the player events as your reference point  of zero you will see a graph of the volatility that is, the transition of events above or below the center line.  You will notice that your “X” are snaking over that center line.  Here’s a section of our card for reference.  Can you see the graph created by the “X”?

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

Finally, our card provides a lot of information about event groupings.  That is, a lot of Baccarat players are pattern players.   For example, in the section of the shoe above there are 7 chops at the following hands [1, 2, 6, 10, 14, 17 and 18].   Other players like to play streaks, there are 5 streaks in the above section at the following hands [3, 7, 11, 15 and 19]. Other players like to play doubles there are 8 doubles at hands [3, 5, 7, 9 11, 13, 15 and 19].  These various different grouping of events make up the overall characteristics of a shoe and any serious player in my opinion should maintain a record of the shoes played or observed and then analyze those shoes for the count, duration and variance in english (how many,  how long and how far apart) the desired events appear in the shoes a player has been exposed to and then use this information to define and select a money management plant to capitalize on the most common occurrences.  Because you can only place a 49% confidence in any outcome and you cannot see around the corner, you also need a contingency plan for dealing with unforeseen circumstances because nothing kills a player faster at the table than when they encounter a situation that forces them to make a decision that they haven’t thought through how they would address it.  This brings us to the subject of Hit Ratios.  If you are using any kind of bet placement system whether a pattern play or just based on a feeling you get inside, you should be tracking your hits.  You can do this by circling the “Xs” on your card.  

Now let’s talk about the 2nd card you are going to be using during your game play, that is, your money card.  Just like a bean counter you should be tracking the flow of your money. and like a tide, it will be going out and coming back in during the course of the game.by tracking these numbers, you will be able to monitor the rate and flow money between you and the dealers tray.  You will also be able to see the volatility here as it should track closely with your game performance.  For example, if you have a cluster of wins most of your numbers will be positive. on the other hand if you have a series of losses then the numbers will be non-positive.   Setting up your money management card is similar to setting up your card for tracking the tote board with one major exception that is, you only need one blank line between the hand numbers you write on your card therefore, you should be able to get all of your hands to fit on the card without using the space in the upper right corner of the card.  If you lose a bet, you will mark the number of units you loss for example, if you bet $10 and loss put a 1,  If you bet $50 and lose put a 5 etc. On the other hand, if you win $10 put +1 and if you win $50 put +5.  Below is an example of a blank money management card.

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

Below is a sample(only 10 hands) of a money management card that is filled out.

1

2

3

4

5

6

7

8

9

10

1

1

1

+2

+4

+1

+2

1

1

1


Let me explain what you are seeing when you look at the above sample money management card, first, you are seeing the number of units I bet at each hand.  Then, you can see which hands I won and which ones I lost.  Finally, you can see the volatility (wins surrounded by losses).  For example,  I lost the first three hands for a total of $30 then I win the next four hands for a total of $90 then I lose the next three hands for a total of $30.  At the end of a series or a quarter which is 20 hands (not shown in this example) you add up all of your wins and all of your losses and then subtract your losses from your wins whatever remains is the amount of money you are up or down.  Using the above sample as an example, (amounts are expressed in units)

Total Wins: 9

Total Losses: 6

9 - 6 = 3  (I won $30)  You can also quit after a series of wins for example, after winning hands 4-7 (I might have a rule that says that I will quit on my next loss) that happens at hand 8, so that is my signal to stop playing now my totals are this:

Total Wins: 9

Total Losses:4

9 - 4 = 5 (I won $50)

These are the only two cards you will need at the table. You can pitch the money management card at the end of the game, because you can always create a new one.  But remember to keep the card containing the outcomes of the shoe (copy of the tote board) because you will use these for purposes I am going to get to shortly.

Finally, I would like to present you with two shoes which represent every possible outcome in Baccarat.  Each shoe is composed of 16 blocks of 5 outcomes grouped from worse to best.  Every shoe is a random combination of these master patterns.  I ignore ties because ties only skew the results in that they are non-actionable events when you are playing the game head-to-head that is, it only matters if you win or lose a hand as pushes only advance you through the game. To create the win/loss patterns line bet the player line through both shoes.  I use these shoes to stress test betting systems which is going to be my next topic.  I can test their balance that is, how much money you lose when you lose vs how much money you can win when you win.  Therefore these two shoes and the resulting win/loss patterns will serve as essential tools in the development of a betting method that is appropriate for you in terms of your bankroll size and action requirements.

Master Shoe #1  Blocks 1 - Blocks 16

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

Master Shoe #2 Blocks 17 - Blocks 32

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

Here are the resulting win/loss patterns for the above shoes, you can use the same card layout to plot win/loss patterns as you use for money management.

Plot of Win/Loss Patterns from Master Shoe #1

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

L

L

L

L

L

L

L

L

L

W

L

L

L

W

L

L

L

W

L

L

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

L

W

L

L

L

W

L

L

L

L

L

L

L

W

W

L

L

W

W

L

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

L

W

W

L

L

W

W

L

L

L

W

L

L

L

W

W

L

L

W

L

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

W

L

W

L

L

L

W

L

L

W

L

L

W

L

W

L

W

L

W

L

Here’s a tally of the characteristics to the first shoe:

Quarter 1: Wins = 3 (15%)  Losses = 17 (85%)

Quarter 2: Wins = 6 (30%)  Losses = 14 (70%)

Quarter 3: Wins = 8 (40%)  Losses = 12 (60%)

Quarter 4: Wins = 8 (40%)  Losses = 12 (60%)

Total Wins = 25 (31%)

Total Losses = 55 (68%)

Plot of Win/Loss Patterns from Master Shoe #2

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

L

L

W

W

W

L

W

W

W

L

W

W

W

L

L

L

W

L

W

W

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

W

L

W

W

L

W

W

L

W

L

L

W

W

W

W

W

W

W

W

L

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

W

W

W

L

W

W

W

L

W

W

W

L

W

W

W

W

W

W

W

L

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

W

W

W

L

W

W

W

L

W

W

W

L

W

W

W

W

W

W

W

W

Here’s a tally of the characteristics of the second shoe:

Quarter 1: Wins = 12 (60%) Losses = 8 (40%)

Quarter 2: Wins = 14 (70%) Losses = 6 (30%)

Quarter 3: Wins = 16 (80%) Losses = 4 (20%)

Quarter 4: Wins = 17 (85%) Losses = 3 (15%)

Total Wins = 59 (73%)

Total Losses = 21 (26%)

Every shoe in Baccarat is a made up of the 32 to blocks I’ve chained together in master shoe #1 and master shoe #2.  Those five hand blocks are just put together in different orders. Sometimes, the same blocks are chained together or repeat themselves multiple times in a shoe.  This is what makes the game so familiar, but at the same time, so elusive.  When players have high exposure to the game, they see the same patterns so often that they begin to believe that they know what is going to happen next and sometimes they are right, but most of the time they are wrong and this is usually because you can never tell (when) something is going to happen (exactly), so as long as there is an element of uncertainty all of your efforts will be reduced to simply guessing.  Therefore, players should never become convinced of their own greatness. Proceed cautiously because the game is tricky. For example,  there are 16 blocks out of 32 (50%) that start with banker winning the first hand.  There are players that believe that banker wins the first hand 80% of the time.  The only thing that is absolutely true about Baccarat is that for long term success, always bet the bank as the number of banker events over time will always outpace the player events.   This doesn’t mean that you won’t encounter player dominant shoes and you won’t feel that great betting banker in a shoe that ends with player going 50 over banker 25.  In Baccarat anything is subject to happen at any time that’s why you have to be prepared.

Lesson 7

Appreciate the Value of Practice

I highly recommend that players of Baccarat practice outside of live game play.  It has many benefits such as; allowing you to enjoy the up and downs of the game without the pressures of putting real money on the line;  Let’s try different approaches in much less time than it would take doing it in a live environment.  All of this practice will help build your confidence as most of the complicated stuff will become routine. I recommend your practice include the following things:

1. Learn to deal the game including collecting bets and making payouts.

2. Learn to use your outcome cards to practice tactile betting with real chips.

3. Learn to use your outcome cards to practice logical execution of betting strategies.

4. Learn to use simulations as part of your game play strategy.

5. Learn to observe live games.

Like anything in life, the more you do it, the better you can become at it.  You might be wondering  why I would contradict myself and recommend practicing a game that I said requires zero skill to play.  Well, it is not a contradiction because the game really doesn’t require any skill to play you simply place money inside little circles on the table and wait to see if you won or loss.  It is all of the other stuff (money management, discipline, tracking outcomes, understanding volatility  and basic math) that you will need to master.   You can pretty much get all of the basics (8 decks of playing cards, 300, 400 or 500 piece poker set and card shoe and automatic shuffler) from your local Target or Walmart stores.  You can usually find this stuff where they keep the board games.  If you like to shop online, you can get the stuff on Ebay.  You can get graph paper from just about anywhere or you can make and print your own.  Whenever you deal shoes at home you should record the outcomes on your graph paper and keep a copy of it.  

Let me walk you through some of my practice routines so that you can get some ideas about how you might approach this. If I am playing by myself, which means that I have to be the dealer and the player, I simply set up my card and my chips as I would  if I was playing a live game and once I am all set up, I place a bet then I deal the cards to see if I won or loss.  If I lose, I collect the bet and put it in my dealer tray.  If I won,  I pay the bet.  I make all of my usual notes and continue on with the game.  This is much faster, if you have someone to act as the dealer for you.  However, what you will notice is that live play is really slow it takes about 30 minutes to progress through 30 hands at the mini-bac tables.  The big tables take about 45 minutes or more to cover the same number of hands.  Another mode of tactile execution, if I am simply planning to line bet one of the sides in a shoe, I can deal 80 hands and simply record the outcomes on one of my cards then, go back and make the actual bets and payouts based on my bet selection.  My final mode of solo play, involves using my outcomes book to determine if I won a hand or not by using an index card to hide the results and show them after I’ve made my bet placement.    For logical execution,  I practice with my outcomes book and my money management card just plotting out what I would have bet if I were playing.  I can do the same thing when observing live games in the casino.   If you have an Apple Ipad, there is a Baccarat Free application.  If you have a PC, you can use the following free application to play online  from the Wizard of Odds website: http://wizardofodds.com/play/baccarat/new/ 

Lesson 8

Betting Systems

Understanding the Power and Perils of using them

You already know that betting systems do not change the underlying mathematics of the game.  So you might be wondering what good are they then? To answer that question, let’s start with what these tools do for you in the short-term.  Betting Systems are basically rules usually based on some kind of trigger event that tells you how much you should bet and when.  At a fundamental level, they are usually designed to create more paths to a win and few paths to a loss.  They do this by putting more money at risk in the hopes that the underlying math of the game will align to make the payoff worth the risk.  In other words, Betting systems are the epitome of gambling.  Another benefit of betting systems is that they can help you accumulate winnings at a faster rate than you would by simply flat betting.  However the major peril of Betting systems is that this function can cut both ways which means that during a losing streak you can compound your losses.  What is fun about betting systems is that you can design them to provide you with a reasonable amount of action, a corresponding amount of inescapable risk all tailored to the size of your bankroll.  Therefore, I highly recommend that gamblers evaluate factors that are important to them and custom design an approach that is suitable for individual styles of play.

The thing to know and never forget when it comes to betting systems is that many will appear to work most of the time, but it is not the system as much as the underlying math that system depends on that makes it work.  Therefore, you really should not be surprised when you encounter a shoe that causes your system to fail catastrophically and when this happens, you will have to accept the loss and not push it as doing so will only make it worse. If you design a good betting system you should be able to get some good runs out of it.  Another thing you should be aware of when evaluating betting systems, is that most modern betting systems are elaborate combinations of older systems.  If you understand the strengths and weaknesses of a series of  betting systems, with practice, you can learn to switch between them as the situation dictates.

Once you have a betting system you like,  I recommend only playing enough to reach a particular win target.  You can go back and try another session if you want.  But a word of caution, most gamblers when faced with a losing streak will play differently (more reckless) than they do when winning.  This causes losses to balloon out of proportion to the wins.  Therefore, you should see your betting system through to the end and except that losing is as much a part of the game and the experience as winning.  With that being said, let me illustrate the considerations that one must make by outlining one of the  systems that I use for my game play, and the process by which I arrived at the development of this system and others.  The first concept of consideration is that of Utility (what would make me happy?) and the answer to that question:  I would like to have the ability to play for a while with a decent shot to win some money.  The next question to ask and to answer is how much am I willing to risk to pursue this goal?  Finally, we calculate our best chance to accomplish this goal (we covered much of this in previous lessons). For example, let’s say that I would be happy winning between $100 and $200 per game and I would be willing to lose $1,000 in an effort to achieve this goal.  So the formula for calculating this is:

(Money I want to Risk / Money I want to Risk + Money I want to Win) = My Chance of Getting Money I Want to Win Before Losing The Money I Want to Risk.

The math would look like this:

($1000 / $1200) = 83% chance I will be able to win $200 before losing $1000.  Let’s lower the amount to a $100 win.

($1000/$1100) = 90% chance I will be able to win $100 before losing $1000.  

The aforementioned calculations tell me that I should stop playing when I’ve won any amount between $100 to $200.  Every $100 extra I try to win especially in the same shoe, increases the risk that I will lose my $1000 before making an additional $100.  The next step involves determining how to use my $1000 bankroll to secure the win. Maximum boldness says that my best chance of success comes from placing a single bet for the total amount of money I would like to win. While effective, this approach would violate one aspect of my utility and that is I would like to play for a while.  So I use a method to spread the $1000 bankroll into a series of bets and I grind my way to a win.  The offsets differences between wagered amounts and the betting rules will produce a profit of between $10 and $40 for every bet that succeeds.  The next table shows the distribution of my $1000 bankroll.  The top row represents the bet number.  The bottom row shows the dollar amount of each bet.  On my money management card, these would be represented in unit numbers.

1

2

3

4

5

6

7

8

9

10

11

12

13

10

10

10

20

30

40

50

60

80

120

150

200

220

The total of all 13 bets equal  $1000.   The rules are structured so that it takes two hands to resolve a bet.   The strategy is simple,  in Baccarat single events are the most common, followed by doubles, followed by triples.  This betting system relies on there being at least one double at some point along the sequence.  If we pass through the entire sequence of bets without a double we bust and lose $1000.  However, if we hit a double at any point between bets 1-12 we recover any loss units and show a profit.   If we get a double at bet 13 we will be down $340.   If we get a double we start the sequence over from bet 1.  If we bust, we start the sequence over from bet 1.  My system does both,  I push when I am ahead and I push when I am behind. I push when I am ahead by letting all of my winning bets ride that is, my base bet plus my win becomes my next bet this is known as a pyramid strategy.  When I win two hands back to back my base bet is multiplied by 3. However, when I lose, I only lose my base bet.  The following table shows the amounts won from successful parlays (row 3).

1

2

3

4

5

6

7

8

9

10

11

12

13

10

10

10

20

30

40

50

60

80

120

150

200

220

30

30

30

60

90

120

150

180

240

360

450

600

660

I push when I am behind, every time I lose a bet or a parlay, I advance to the next bet in the sequence and I keep going until I score a win or bust.  The following table shows a mapping of win paths created by the sequence of numbers in my method.  If a win occurs at bets 2-13, then that means that all of the proceeding bets were lost so any money won goes first to payoff all past losses and amounts shown as profits is what remains after recovering all of the lost amounts.  The formula for this is:

Units Won - Total Units Loss = Net Profit  or Loss.

Bet Number

Total Units Loss

Net Profit

1

0

$30

2

1

$20

3

2

$10

4

3

$30

5

5

$40

6

8

$40

7

12

$30

8

17

$10

9

23

$10

10

31

$50

11

43

$20

12

58

$20

13

78

-$120

I could make my last bet $300 instead of $220 and it would return a positive amount of $120 but if I have lost by such a ratio that I have exhausted all of my bets.  I should simply accept the $1,000 loss which is easy to recover from. However, as the amount of money I win grows,  I can add more rungs to my ladder for example, bet 13 would become $280 followed by $360 for bet 14 and finally bet $500 for bet 15. I should note for the record, that I have a defensive mode of play that I can switch to once I get to bet 10 where the objective would switch from winning to recovery only. The next task for any system is to stress test it against my master shoes.  In the first shoe this system busted three times for a total loss of $3,220.  I scored a few small wins which brought the total loss down to $2,950.  In Master Shoe #2 the system scored a net win of $540.  Remember that the purpose of the stress test is to show how unbalanced a method or a system is. The final stages of testing involved tactile execution, logic testing on paper and trending analysis by programming the betting rules into a computer and let the computer run a simulation of 200 hours of game play. What I will be looking for in the simulations, is how many times the system busts how long to it take to recover from a bust and is the overall trend in terms of winning positive or negative.  If negative, then I throw the system out.  If the overall trend is positive, then I keep the system as part of my arsenal.  I have two modes of executing my strategy during live game play,  and which one I use depends on the observed volatility of the game. For instance, if the game has high volatility very (choppy)

 then always bet the bank.  If the shoe is streaky then follow the shoe that is, bet on the side of the last winning hand.  If the shoe is lopsided, (strong banker or strong player) pay attention to the point difference between the two sides.  Ride the strong side until the other side gets really far behind and then switch to the weak side.  You would also opt to sit out hands to conserve capital and wait for favorable conditions to develop before you start playing again.  But you should know, that this usually just delays the inevitable because Baccarat is a persistently unpredictable game. Once you have your strategies down you should play 30 games against the computer or by using your cards and poker chips this is the equivalence 60 hours of live casino play.  Keep track of your starting and ending bankrolls so that you can track your overall progress. If you are successful, then you should have won between $4,000  $6,000 and the end of 30 games.  This would represent a win rate of $100 to $200 per game.  If you can do this in practice, then there is no reason you cannot do it in the casino.  Let me warn you about some of the challenges of live casino play: First, everything in the casino happens in slow motion which means that when losing hands things will (seem) a lot worse and when winning hands it will not (seem) fast enough.  These are perceptual problems that you can convert into positive experiences by using the delays to update your cards, think about the volatility of the game and just generally enjoy yourself as the game is unfolding.  Second, is it’s noisy and crowded. The noise and the crowds will begin to irritate you on a subconscious level after a while therefore, you should get up and walk around for 20 minutes or so  this is good for the body also because it is not good to sit for long hours without a break.  My triggers for when to take a break are: Whenever, I reach a win target, or finish playing a quarter of the game (20 hands). The third and most important sign for when to quit is once you are tired.  Baccarat can be a mentally exhausting game, once your mind is tired you are done and should stop playing immediately and leave the Casino. Mental fatigue is like  being asleep while you are awake, you have to learn to pay attention to what your body is telling you and more importantly listen and take action. If you don’t get up when you are tired you will start making mistakes and doing things that are irrational.  You’ll will feel like the game took a dramatic turn but the only thing that happened is you got tired and so are the other people at the table if they have been playing for a while without a break.

My last recommendation, is spend some time away from the casino while it can be fun, you need to take days off.  None of the advice I’ve given is guaranteed to make you a winner but it will make you a better gambler and knowledge is power. Let’s wrap up this section by completing the

analysis of some popular betting systems which were mentioned in previous lessons but not reviewed.  We will use the same test shoe patterns outlined in lesson 5:

1. All Losses

2. All Wins

3. Losses Followed by Wins

4. Wins Followed by Losses

5. Wins Surrounded by Losses

6. Losses Surrounded by Wins

7. Win and Losses Evenly Distributed

8. Clustered Wins and Losses

The betting progressions we will review are:

1. Anti-Martingale

2. D’Alembert

3. Parlay

4. Paroli

5. 1-3-2-6

5. U1D2M2

We will start with a review of the Anti-Martingale system.  The table is laid out so that the hand numbers are on the first and the fifth rows. The win/loss patterns are on the second and the sixth rows and the units bet are on the third and seventh rows.  The blank rows are used to indicate where a system busts based on a bankroll consisting of the following unit amounts [5, 10, 15, 20, 25, 30, 50, 100, 150, 200, 500, 1000].  If you will recall from earlier examples, we have 12 players sitting at the tables that represented by the respective bankroll amounts.

System: Anti-Martingale

Rules: Always bet 1 unit double on Win

Pattern #1 All Losses

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

L

L

L

L

L

L

L

L

L

L

L

L

L

L

L

L

L

L

L

L

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

B

B

B

B

Session Analysis for Shoe #1

1. player #1 goes broke at hand 5

2. player #2 goes broke at hand 10

3. player #3 goes broke at hand 15

4. player #4 goes broke at hand 20

5. player #5 losses 75% of bankroll

6. player #6 losses 66% of bankroll

7. player #7 losses 40% of bankroll

8. player #8 losses 20% of bankroll

9. player #9 losses 13% of bankroll

10. player #10 losses 10% of bankroll

11. player #11 losses 4% of bankroll

12 player #12 losses 2% of bankroll

System: Anti-Martingale

Rules: Always bet 1 unit double on Win

Pattern #2 All Wins

1

2

3

4

5

6

7

8

9

10

W

W

W

W

W

W

W

W

W

W

1

2

4

8

16

32

64

128

256

512

11

12

13

14

15

16

17

18

19

20

W

W

W

W

W

W

W

W

W

W

1024

2048

4096

8192

16384

32768

65536

100k

100k

100k

TL

TL

TL

The power of the Anti-Martingale is simple in a winning streak you can profit big.  TL show the point when our players hit the table limit so they were limited to making $100,000 bets for a total win per player of $365,593. The players wins were capped by the table limit.  Without the table limits, the players would have won $524,288 each.  

System: Anti-Martingale

Rules: Always bet 1 unit double on Win

Pattern #3 Losses Followed by Wins

1

2

3

4

5

6

7

8

9

10

L

L

L

L

L

L

L

L

L

L

1

1

1

1

1

1

1

1

1

1

B

B

11

12

13

14

15

16

17

18

19

20

W

W

W

W

W

W

W

W

W

W

1

2

4

8

16

32

64

128

256

512

Session Analysis for Shoe #3

1. player #1 goes broke at hand 5

2. player #2 goes broke at hand 10

3.  The rest of our players (3 through 12) win $5,020 each.

System: Anti-Martingale

Rules: Always bet 1 unit double on Win

Pattern #4 Wins Followed by Losses

1

2

3

4

5

6

7

8

9

10

W

W

W

W

W

W

W

W

W

W

1

2

4

8

16

32

64

128

256

512

11

12

13

14

15

16

17

18

19

20

L

L

L

L

L

L

L

L

L

L

512

1

1

1

1

1

1

1

1

1

B

B

1. player #1 goes broke at hand 15

2. player #2 goes broke at hand 20

3. player #3 losses 66% of bankroll

4. player #4 losses 50% of bankroll

5. player #5 losses 40% of bankroll

6. player #6 losses 33% of bankroll

7. player #7 losses 20% of bankroll

8. player #8 losses 10% of bankroll

9. player #9 losses 7% of bankroll

10. player #10 losses 5% of bankroll

11. player#11 losses 2% of bankroll

12. player#12 losses 1% of bankroll

System: Anti-Martingale

Rules: Always bet 1 unit double on Win

Pattern #5 Wins Surrounded by Losses

1

2

3

4

5

6

7

8

9

10

L

L

L

L

L

W

W

W

W

W

1

1

1

1

1

1

2

4

8

16

B

11

12

13

14

15

16

17

18

19

20

W

W

W

W

W

L

L

L

L

L

32

64

128

512

1024

1024

1

1

1

1

B

Session Analysis for Shoe #5

1. player #1 goes broke at hand 5

2. player #2 goes broke at hand 20

3. player #3 losses 66% of bankroll

4. player #4 losses 50% of bankroll

5. player #5 losses 40% of bankroll

6. player #6 losses 33% of bankroll

7. player #7 losses 20% of bankroll

8. player #8 losses 10% of bankroll

9. player #9 losses 7% of bankroll

10. player #10 losses 5% of bankroll

11. player#11 losses 2% of bankroll

12. player#12 losses 1% of bankroll

System: Anti-Martingale

Rules: Always bet 1 unit double on Win

Pattern #6 Losses Surrounded by Wins

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

W

W

W

W

W

L

L

L

L

L

L

L

L

L

L

W

W

W

W

W

1

2

4

8

16

16

1

1

1

1

1

1

1

1

1

1

2

4

8

16

B

B

Session Analysis for Shoe #6

1. player #1 goes broke at hand 10

2. player #2 goes broke at hand 15

3.  The rest of our players (3 through 12) have a net win of $60 or 6 units each.  The formula for calculating this is:

(Starting Bankroll - 10 ) + 16 units won) = 6 net units won.

System: Anti-Martingale

Rules: Always bet 1 unit double on Win

Pattern #7 Wins and Losses Evenly Distributed

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

W

L

W

L

W

L

W

L

W

L

W

L

W

L

W

L

W

L

W

L

1

2

1

2

1

2

1

2

1

2

1

2

1

2

1

2

1

2

1

2

B

B

Session Analysis for Shoe #7

1. player #1 goes broke at hand 10

2. player #2 goes broke at hand 20

3. players (3 through 12) suffer a net loss of 10 units each.

To get the percentage of loss for each player we can use the following formula:

Total Units Loss / Starting Bankroll = Percentage of Loss

System: Anti-Martingale

Rules: Always bet 1 unit double on Win

Pattern #8 Clustered Wins and Losses

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

W

W

L

L

L

L

W

W

W

W

W

L

W

W

W

L

L

L

W

L

1

2

2

1

1

1

1

2

4

8

16

16

1

2

4

4

1

1

1

1

B

Session Analysis for Shoe #8

1. player #1 goes broke at hand 12

2. All other players suffer a 9 unit loss.

Let’s test the D’Alembert system across our test patterns.

System: D’Alembert

Rules:  Add 1 unit after as loss, subtract 1 unit after a win.

Pattern #1: All Losses (20 hands)

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

L

L

L

L

L

L

L

L

L

L

L

L

L

L

L

L

L

L

L

L

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

B

B

B

B

B

B

B

B

B

B

B

Session Analysis for Shoe #1

1. player #1 goes broke at hand 3

2. player #2 goes broke at hand 4

3. player #3 goes broke at hand 5

4. player #4 goes broke at hand 4

5. player #5 goes broke at hand 7

6. player #6 goes broke at hand 8

7. player #7 goes broke at hand 10

8. player #8 goes broke at hand 14

9. player #9 goes broke at hand 17

10. player #10 goes broke at hand 20

12. player #11 losses 42% of bankroll

13. player #12 losses 21% of bankroll.

System: D’Alembert

Rules:  Add 1 unit after a loss, subtract 1 unit after a win.

Pattern #2: All Wins (20 hands)

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

W

W

W

W

W

W

W

W

W

W

W

W

W

W

W

W

W

W

W

W

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

Session Analysis for Shoe #2

All players win $200 (20 units)

System: D’Alembert

Rules:  Add 1 unit after a loss, subtract 1 unit after a win.

Pattern #3: Losses Followed by Wins. (20 hands)

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

L

L

L

L

L

L

L

L

L

L

W

W

W

W

W

W

W

W

W

W

1

2

3

4

5

6

7

8

9

10

11

10

9

8

7

6

5

4

3

2

B

B

B

B

B

B

B

 

Session Analysis for Shoe #3

1. player #1 goes broke at hand 3

2. player #2 goes broke at hand 4

3. player #3 goes broke at hand 5

4. player #4 goes broke at hand 4

5. player #5 goes broke at hand 7

6. player #6 goes broke at hand 8

7. player #7 goes broke at hand 10

The rest of the players (8 through 12) have a net win of $100 or (10 units).

System: D’Alembert

Rules:  Add 1 unit after a loss, subtract 1 unit after a win.

Pattern #4: Wins Followed by Losses (20 hands)

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

W

W

W

W

W

W

W

W

W

W

L

L

L

L

L

L

L

L

L

L

1

1

1

1

1

1

1

1

1

1

1

2

3

4

5

6

7

8

9

10

B

B

B

B

B

B

B

B

B

B

B

B

B

Session Analysis Shoe #4

The outcome for each player is calculated using the following formula:

(Starting Bankroll + 10 units ) - 55 units ) = Net Units

1. player #1 goes broke at hand 15

2. player #2 goes broke at hand 16

3. player #3 goes broke at hand 17

4. player #4 goes broke at hand 18

5. player #5 goes broke at hand 18

6. player #6 goes broke at hand 19

7. player #7 goes broke at hand 20

8. player #8 losses 55% of bankroll

9. player #9 losses 36% of bankroll

10. player #10 losses 27% of bankroll

11. player #11 losses 11% of bankroll

12. player #12 losses 5% of bankroll

 

System: D’Alembert

Rules:  Add 1 unit after a loss, subtract 1 unit after a win.

Pattern #5: Wins Surrounded by Losses (20 hands)

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

L

L

L

L

L

W

W

W

W

W

W

W

W

W

W

L

L

L

L

L

1

2

3

4

5

6

5

4

3

2

1

1

1

1

1

1

2

3

4

5

B

B

B

Session Analysis  Shoe # 5

1. player #1 goes broke at hand 3

2. player #2 goes broke at hand 10

3. player #3 goes broke at hand 15

4. The rest of our players (4 through 12) lose 5 units each.

System: D’Alembert

Rules:  Add 1 unit after a loss, subtract 1 unit after a win.

Pattern #6: Losses Surrounded by Wins (20 hands)

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

W

W

W

W

W

L

L

L

L

L

L

L

L

L

L

W

W

W

W

W

1

1

1

1

1

1

2

3

4

5

6

7

8

9

10

11

10

9

8

7

B

B

B

B

BB

B

Session Analysis Shoe #6

1. player #1 goes broke at hand 9

2. player #2 goes broke at hand 10

3. player #3 goes broke at hand 11

4. player #4 goes broke at hand 12

5. player #5 goes broke at hand 13

6. player #6 goes broke at hand 13

7. player #7 goes broke at hand 15

8. The rest of our players (8 through 12) lose 5 units each.

System: D’Alembert

Rules:  Add 1 unit after a loss, subtract 1 unit after a win.

Pattern #7: Wins and Losses evenly distributed (20 hands)

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

W

L

W

L

W

L

W

L

W

L

W

L

W

L

W

L

W

L

W

L

1

2

1

2

1

2

1

2

1

2

1

2

1

2

1

2

1

2

1

2

B

B

Session Analysis Shoe #7

1. player #1 goes broke at hand 10

2. player #2 goes broke at hand 20

3. The rest of the players (3 through 12) lose 10 units each.

System: D’Alembert

Rules:  Add 1 unit after a loss, subtract 1 unit after a win.

Pattern #8: Clustered Wins and Losses (20 hands)

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

W

W

L

L

L

L

W

W

W

W

W

L

W

W

W

L

L

L

W

L

1

1

1

2

3

4

5

4

3

2

1

1

2

1

1

1

2

3

4

3

B

Session Analysis for Shoe #8

1. player #1 goes broke at hand 3

2. player #2 ends session with a 2 unit loss.

3. The rest of our player(3 through 12) all finish with a win of one unit.

The next betting system I want to evaluate is the Parlay bet.

System: Parlay

Rules:  Bet 1 unit, let all winning bets ride until the next bet, return to 1 unit after result.

Pattern #1: All Losses (20 hands)

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

L

L

L

L

L

L

L

L

L

L

L

L

L

L

L

L

L

L

L

L

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

B

B

B

B

Session Analysis Shoe #1

1. player #1 goes broke at hand 5

2. player #2 goes broke at hand 10

3. player #3 goes broke at hand 15

4. player #4 goes broke at hand 20

5. The rest of our players (5 through 12) lose 20 units each.

System: Parlay

Rules:  Bet 1 unit, let all winning bets ride until the next bet, return to 1 unit after result.

Pattern #2: All Wins (20 hands)

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

W

W

W

W

W

W

W

W

W

W

W

W

W

W

W

W

W

W

W

W

1

2

1

2

1

2

1

2

1

2

1

2

1

2

1

2

1

2

1

2

Session Analysis Shoe #2

All of our player win 30 units ($300)

System: Parlay

Rules:  Bet 1 unit, let all winning bets ride until the next bet, return to 1 unit after result.

Pattern #3: Losses Followed by Wins (20 hands)

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

L

L

L

L

L

L

L

L

L

L

W

W

W

W

W

W

W

W

W

W

1

2

1

2

1

2

1

2

1

2

B

B

Session Analysis for Shoe #3

1. player #1 goes broke at hand 5

2. player #2 goes broke at hand 10

3. The rest of our players (3 through 12) finish 5 units ahead ($50)

System: Parlay

Rules:  Bet 1 unit, let all winning bets ride until the next bet, return to 1 unit after result.

Pattern #4: Wins Followed by Losses (20 hands)

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

W

W

W

W

W

W

W

W

W

W

L

L

L

L

L

L

L

L

L

L

1

2

1

2

1

2

1

2

1

2

1

1

1

1

1

1

1

1

1

1

Session Analysis Shoe #4

All players finish 5 units ($50) ahead.

System: Parlay

Rules:  Bet 1 unit, let all winning bets ride until the next bet, return to 1 unit after result.

Pattern #5: Wins Surrounded by Losses (20 hands)

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

L

L

L

L

L

W

W

W

W

W

W

W

W

W

W

L

L

L

L

L

1

1

1

1

1

1

2

1

2

1

2

1

2

1

2

1

1

1

1

1

B

Session Analysis Shoe #5

1. player #1 goes broke at hand 5

2. The rest of our players (2 through 12) finish 5 units ahead ($50)

 

System: Parlay

Rules:  Bet 1 unit, let all winning bets ride until the next bet, return to 1 unit after result.

Pattern #6: Losses Surrounded by Wins (20 hands)

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

W

W

W

W

W

L

L

L

L

L

L

L

L

L

L

W

W

W

W

W

1

2

1

2

1

1

1

1

1

1

1

1

1

1

1

1

2

1

2

1

Session Analysis Shoe #6

All players finish 3 units ahead ($30)  The formula for making this calculation is:  

(Starting Bankroll  + 6) - 10)  +7  = 3

System: Parlay

Rules:  Bet 1 unit, let all winning bets ride until the next bet, return to 1 unit after result.

Pattern #7:Wins and Losses evenly distributed (20 hands)

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

W

L

W

L

W

L

W

L

W

L

W

L

W

L

W

L

W

L

W

L

1

2

1

2

1

2

1

2

1

2

1

2

1

2

1

2

1

2

1

2

B

B

Session Analysis Shoe #7

1. player #1 goes broke at hand 10

2. player #2 goes broke at hand 20

3. The rest of our players (3 through 12) lose 10 units each ($100)

System: Parlay

Rules:  Bet 1 unit, let all winning bets ride until the next bet, return to 1 unit after result.

Pattern #8: Clustered Wins and Losses (20 hands)

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

W

W

L

L

L

L

W

W

W

W

W

L

W

W

W

L

L

L

W

L

1

2

1

1

1

1

1

2

1

2

1

2

1

2

1

2

1

1

1

2

 

Session Analysis Shoe #8

The net result of the above session is that all of our players finish one unit behind -($10).   This is captured by the following calculation:

(Starting Bankroll +2 ) -4 ) +3)  -1) +3) -4) = -1  

The next betting system we will evaluate is the  Paroli.  This system is very similar to the Parlay and the Anti-Martingale system as the rules require the gambler to bet 1 unit until a win is encountered and then double the next bet. Where the system differs from the Anti-Martingale, instead of perpetually doubling a bet as the Anti-Martingale would call for, the Paroli stops after two Parlays which means that it requires three successful bets to complete a sequence.

System: Paroli

Rules:  Bet 1 unit, let all winning bets ride up to a maximum of two bets. Reset on Win/Loss

Pattern #1: All Losses (20 hands)

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

L

L

L

L

L

L

L

L

L

L

L

L

L

L

L

L

L

L

L

L

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

B

B

B

B

Session Analysis Shoe #1

1. player #1 goes broke at hand 5

2. player #2 goes broke at hand 10

3. player #3 goes broke at hand 15

4. player #4 goes broke at hand 20

5. The rest of our players (5 through 12 ) lose 20 units each ($200)

System: Paroli

Rules:  Bet 1 unit, let all winning bets ride up to a maximum of two bets. Reset on Win/Loss

Pattern #2: All Wins (20 hands)

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

W

W

W

W

W

W

W

W

W

W

W

W

W

W

W

W

W

W

W

W

1

2

3

1

2

3

1

2

3

1

2

3

1

2

3

1

2

3

1

2

Session Analysis Shoe #2

All players finish 39 units ahead ($390)

System: Paroli

Rules:  Bet 1 unit, let all winning bets ride up to a maximum of two bets. Reset on Win/Loss

Pattern #3: Losses Followed by Wins (20 hands)

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

L

L

L

L

L

L

L

L

L

L

W

W

W

W

W

W

W

W

W

W

1

1

1

1

1

1

1

1

1

1

1

2

3

1

2

3

1

2

3

1

B

B

Session Analysis Shoe #3

1. player #1 goes broke at hand 5

2. player #2 goes broke at hand 10

3. The rest of our players (3 through 12 ) finish 9 units ahead ($90) this result is calculated by using the following formula: (Bankroll - 10) + 19 = 9

System: Paroli

Rules:  Bet 1 unit, let all winning bets ride up to a maximum of two bets. Reset on Win/Loss

Pattern #4: Wins Followed by Losses (20 hands)

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

W

W

W

W

W

W

W

W

W

W

L

L

L

L

L

L

L

L

L

L

1

2

3

1

2

3

1

2

3

1

2

1

1

1

1

1

1

1

1

1

Session Analysis for Shoe #4

All players finish 8 units ahead ($80) this result is calculated by using the following formula:

(Bankroll + 18) - 10 = 8

System: Paroli

Rules:  Bet 1 unit, let all winning bets ride up to a maximum of two bets. Reset on Win/Loss

Pattern #5: Wins Surrounded by Losses (20 hands)

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

L

L

L

L

L

W

W

W

W

W

W

W

W

W

W

L

L

L

L

L

1

1

1

1

1

1

2

3

1

2

3

1

2

3

1

2

1

1

1

1

B

Session Analysis for Shoe #5

1. player #1 goes broke at hand 5

2. The rest of our players finish 8 units ($80) this result is calculated by using the following formula:  (Bankroll  -5) + 18 ) - 5  = 8

System: Paroli

Rules:  Bet 1 unit, let all winning bets ride up to a maximum of two bets. Reset on Win/Loss

Pattern #6: Losses Surrounded by Wins (20 hands)

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

W

W

W

W

W

L

L

L

L

L

L

L

L

L

L

W

W

W

W

W

1

2

3

1

2

3

1

1

1

1

1

1

1

1

1

1

2

3

1

2

Session Analysis Shoe #6

All players (1 through 12) finish 5 units ahead ($50) this result is calculated by using the following

formula:  (Bankroll +6 ) - 10 ) + 9 = 5

System: Paroli

Rules:  Bet 1 unit, let all winning bets ride up to a maximum of two bets. Reset on Win/Loss

Pattern #7: Wins and Losses Evenly Distributed (20 hands)

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

W

L

W

L

W

L

W

L

W

L

W

L

W

L

W

L

W

L

W

L

1

2

1

2

1

2

1

2

1

2

1

2

1

2

1

2

1

2

1

2

B

B

Session Analysis Shoe #7

1. player #1 goes broke at hand 10

2. player #2 goes broke at hand 20

3. The rest of our players (3 through 12) lose 10 units each ($100)

System: Paroli

Rules:  Bet 1 unit, let all winning bets ride up to a maximum of two bets. Reset on Win/Loss

Pattern #8: Clustered Wins and Losses (20 hands)

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

W

W

L

L

L

L

W

W

W

W

W

L

W

W

W

L

L

L

W

L

1

2

3

1

1

1

1

2

3

1

2

3

1

2

3

1

1

1

1

2

Session Analysis Shoe #8

All players (1 through 12) finish 3 units ahead ($30) this result is calculated by using the following

formula: (Bankroll - 4) + 6 ) -1 ) + 6) -4 = 3

Our next betting system is the 1-3-2-6 method.  Basically, this system  takes 12 units and spreads it into four wagers you always start with one unit and continue through the progression on wins but reset to 1 on loss.

System: 1-3-2-6

Rules:  Bet 1 unit, if win continue to next number in sequence if lose, return to 1 unit.

Pattern #1: All Losses (20 hands)

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

L

L

L

L

L

L

L

L

L

L

L

L

L

L

L

L

L

L

L

L

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

B

B

B

B

Session Analysis Shoe #1

1. player #1 goes broke at hand 5

2. player #2 goes broke at hand 10

3. player #3 goes broke at hand 15

4. player #4 goes broke at hand 20

5. The rest of the players  (5 through 12) lose 20 units each ($200)

System: 1-3-2-6

Rules:  Bet 1 unit, if win continue to next number in sequence if lose, return to 1 unit.

Pattern #2: All Wins (20 hands)

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

W

W

W

W

W

W

W

W

W

W

W

W

W

W

W

W

W

W

W

W

1

3

2

6

1

3

2

6

1

3

2

6

1

3

2

6

1

3

2

6

Session Analysis Shoe #2  

All players finish 60 units ahead ($600)

System: 1-3-2-6

Rules:  Bet 1 unit, if win continue to next number in sequence if lose, return to 1 unit.

Pattern #3: Losses Followed by Wins (20 hands)

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

L

L

L

L

L

L

L

L

L

L

W

W

W

W

W

W

W

W

W

W

1

1

1

1

1

1

1

1

1

1

1

3

2

6

1

3

2

6

1

3

B

B

Session Analysis Shoe #3

1. player #1 goes broke at hand 5

2. player #2 goes broke at hand 10

3. The rest of our players (3 through 12) finish 18 units ahead ($180) this result is calculated by using the following formula: (Bankroll - 10 ) + 28 = 18

System: 1-3-2-6

Rules:  Bet 1 unit, if win continue to next number in sequence if lose, return to 1 unit.

Pattern #4: Wins Followed by Losses (20 hands)

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

W

W

W

W

W

W

W

W

W

W

L

L

L

L

L

L

L

L

L

L

1

3

2

6

1

3

2

6

1

3

2

1

1

1

1

1

1

1

1

1

Session Analysis Shoe #4

All players finish 17 units ahead ($170) this result is calculated by using the following formula: (Bankroll + 28 ) - 11 = 17

System: 1-3-2-6

Rules:  Bet 1 unit, if win continue to next number in sequence if lose, return to 1 unit.

Pattern #5: Wins Surrounded by Losses (20 hands)

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

L

L

L

L

L

W

W

W

W

W

W

W

W

W

W

L

L

L

L

L

1

1

1

1

1

1

3

2

6

1

3

2

6

1

3

2

1

1

1

1

B

Session Analysis Shoe #5

1. player #1 goes broke at hand 5

2. The rest of the players (2 through 12) finish 17 units ahead ($170) this result is calculated by using the following formula:  (Bankroll - 5 ) + 28 ) - 6 = 17

System: 1-3-2-6

Rules:  Bet 1 unit, if win continue to next number in sequence if lose, return to 1 unit.

Pattern #6: Losses Surrounded by Wins (20 hands)

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

W

W

W

W

W

L

L

L

L

L

L

L

L

L

L

W

W

W

W

W

1

3

2

6

1

3

1

1

1

1

1

1

1

1

1

1

3

2

6

1

Session Analysis Shoe #6

All players finish 14 units ahead ($140) this result is calculated by using the following formula:

(Bankroll + 13) - 12 ) + 13 = 14

System: 1-3-2-6

Rules:  Bet 1 unit, if win continue to next number in sequence if lose, return to 1 unit.

Pattern #7: Wins and Losses Evenly Distributed (20 hands)

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

W

L

W

L

W

L

W

L

W

L

W

L

W

L

W

L

W

L

W

L

1

3

1

3

1

3

1

3

1

3

1

3

1

3

1

3

1

3

1

3

B

B

B

B

Session Analysis Shoe #7

1. player #1 goes broke at hand 5

2. player #2 goes broke at hand 10

3. player #3 goes broke at hand 15

4. player #4 goes broke at hand 20

5. The rest of our players (5 through 12) lose 20 units each ($200)

System: 1-3-2-6

Rules:  Bet 1 unit, if win continue to next number in sequence if lose, return to 1 unit.

Pattern #8: Clustered Wins and Losses  (20 hands)

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

W

W

L

L

L

L

W

W

W

W

W

L

W

W

W

L

L

L

W

L

1

3

2

1

1

1

1

3

2

6

1

3

1

3

2

6

1

1

1

3

Session Analysis for Shoe #8

All players finish 5 units ahead ($50) this is calculated by the following formula:

( Bankroll + 4) -5) + 13 ) -3 ) +6) - 8)  +1 ) -3  =  5

The final betting system we will evaluate is called U1D2M2.  This betting system appears to be a variation of the D’Alembert Betting system. The system requires you to increase the bet one unit after each loss thus the “1U”, and down 2 Units after a win “D2” and a Mandatory 2 Unit bet after a 1 unit win.  Structurally, the system keeps you betting between 1-3 units during winning streaks and rises gradually during losing streaks and fall rapidly (2 units per win) after a winning streak has finished.   The system has some interesting dimensions to it.

System: 1UD2M2

Rules:  Bet 1 unit, if lose raise bet by 1 unit, if win, lower bet by 2 units bet 2 units after 1 unit win.

Pattern #1: All Losses (20 hands)

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

L

L

L

L

L

L

L

L

L

L

L

L

L

L

L

L

L

L

L

L

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

B

B

B

B

B

B

B

B

B

B

Session Analysis Shoe #1

1. player #1 goes broke at hand 3

2. player #2 goes broke at hand 4

3. player #3 goes broke at hand 5

4. player #4 goes broke at hand 6

5. player #5 goes broke at hand 7

6. player #6 goes broke at hand 8

7. player #7 goes broke at hand 10

8. player #8 goes broke at hand 14

9. player #9 goes broke at hand 17

10. player #10 goes broke at hand 20

11. The rest of our players (11 and 12) both lose 210 units ($2,100) each.

System: 1UD2M2

Rules:  Bet 1 unit, if lose raise bet by 1 unit, if win, lower bet by 2 units bet 2 units after 1 unit win.

Pattern #2: All Wins (20 hands)

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

W

W

W

W

W

W

W

W

W

W

W

W

W

W

W

W

W

W

W

W

1

2

1

2

1

2

1

2

1

2

1

2

1

2

1

2

1

2

1

2

Session Analysis Shoe #2

All players finish ahead by 30 units ($300)

System: 1UD2M2

Rules:  Bet 1 unit, if lose raise bet by 1 unit, if win, lower bet by 2 units bet 2 units after 1 unit win.

Pattern #3: Losses Followed by Wins (20 hands)

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

L

L

L

L

L

L

L

L

L

L

W

W

W

W

W

W

W

W

W

W

1

2

3

4

5

6

7

8

9

10

11

9

7

5

3

1

2

1

2

1

B

B

B

B

B

B

B

Session Analysis Shoe #3

1. player #1 goes broke at hand 3

2. player #2 goes broke at hand 4

3. player #3 goes broke at hand 5

4. player #4 goes broke at hand 6

5. player #5 goes broke at hand 7

6. player #6 goes broke at hand 8

7. player #7 goes broke at hand 10

8. The rest of our players (8 through 12) all finish behind by 13 units or ($130)  this result is calculated by using the following formula:  (Bankroll - 55) + 42 = -13

System: 1UD2M2

Rules:  Bet 1 unit, if lose raise bet by 1 unit, if win, lower bet by 2 units bet 2 units after 1 unit win.

Pattern #4: Wins Followed by Losses (20 hands)

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

W

W

W

W

W

W

W

W

W

W

L

L

L

L

L

L

L

L

L

L

1

2

1

2

1

2

1

2

1

2

1

2

3

4

5

6

7

8

9

10

B

B

B

B

Session Analysis shoe # 4

1. player #1 goes broke at hand 16

2. player #2 goes broke at hand 17

3. player #3 goes broke at hand 18

4. player #4 goes broke at hand 18

5. player #5 goes broke at hand 19

6. player #6 goes broke at hand 19

7. All other players (7 through 12) players finish behind by 40 units ($400) this result is calculated by using the following formula: (Bankroll + 15) - 55 = - 40

System: 1UD2M2

Rules:  Bet 1 unit, if lose raise bet by 1 unit, if win, lower bet by 2 units bet 2 units after 1 unit win.

Pattern #5: Wins Surrounded by Losses (20 hands)

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

L

L

L

L

L

W

W

W

W

W

W

W

W

W

W

L

L

L

L

L

1

2

3

4

5

6

4

2

1

2

1

2

1

2

1

2

3

4

5

6

B

B

B

1. player #1 goes broke at hand 3

2. player #2 goes broke at hand 4

3. player #3 goes broke at hand 5

4. All other players (4 through 12) lose 13 units each ($130) this result is calculated by using the following formula: (Bankroll - 15)  + 22 ) - 20 = - 13

System: 1UD2M2

Rules:  Bet 1 unit, if lose raise bet by 1 unit, if win, lower bet by 2 units bet 2 units after 1 unit win.

Pattern #6: Losses Surrounded by Wins (20 hands)

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

W

W

W

W

W

L

L

L

L

L

L

L

L

L

L

W

W

W

W

W

1

2

1

2

1

2

3

4

5

6

7

8

9

10

11

12

10

8

6

4

B

B

B

B

B

B

Session Analysis Shoe #6

1. player #1 goes broke at hand 9

2. player #2 goes broke at hand 10

3. player #3 goes broke at hand 11

4. player #4 goes broke at hand 11

5. player #5 goes broke at hand 12

6. player #6 goes broke at hand 13

7. player #7 goes broke at hand 15

8. All other players finish 80 units behind (-$180)  this result is calculated by using the following formula: (Bankroll +7) - 65 ) + 40 = -18

System: 1UD2M2

Rules:  Bet 1 unit, if lose raise bet by 1 unit, if win, lower bet by 2 units bet 2 units after 1 unit win.

Pattern #7: Wins and Losses Evenly Distributed (20 hands)

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

W

L

W

L

W

L

W

L

W

L

W

L

W

L

W

L

W

L

W

L

1

2

3

1

2

1

2

1

2

1

2

1

2

1

2

1

2

1

2

1

Session Analysis Shoe #7

The net result is all players finish ahead by 4 units ($40)

System: 1UD2M2

Rules:  Bet 1 unit, if lose raise bet by 1 unit, if win, lower bet by 2 units bet 2 units after 1 unit win.

Pattern #8: Clustered Wins and Losses (20 hands)

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

W

W

L

L

L

L

W

W

W

W

W

L

W

W

W

L

L

L

W

L

1

2

1

2

3

4

5

3

1

2

1

2

3

1

2

1

2

3

4

2

B

Session Analysis Shoe #8

1. player #1 goes broke at hand 6

2. player #2 finished 3 units ahead because he didn’t have enough money to make one of the required bets ($30)

3. The rest of our players (3 through 12) finish 5 units ahead ($50) this result is calculated by using the following formula:  (Bankroll + 3) - 10 ) + 12) -2 ) + 6 -6) + 4) -2 = 5

As you can see from all of the examples I have provided, betting systems will have varying outcomes and those outcomes will largely depend on two things; First, the size of your bankroll you need to have enough money to support the kind of betting system you want to employ at the tables.  You need to have enough money to survive downswings of unknown durations and know your bust points! that is, the total amount of bet you can lose before you go broke. The higher number of losses you can sustain, the better your chances are for recovery.  I know that this might appear counter intuitive, but if you look back over the examples,  you will see that the players with the higher bankrolls were able to survive the downswings and in most cases came out okay.  However, during really bad losing streaks the betting systems in many cases only made the losses greater.  The second thing, is betting systems only work when the underlying mathematics align to support the method used.  Therefore, it is incumbent that every gambler logic test and simulate betting approaches before trying them when real money is on the line so that you can get the best measure of the pros and cons of employing them.   I stand by my recommendation that every gambler should custom design a betting approach that balances bankroll, action requirements and risk tolerance. Betting systems sold my system sellers are nothing more than classic betting approaches cobbled together in different ways.  

For example,  I haven’t talked a lot about side bets in Baccarat like the Dragon bonus or the Tie bets because as a general measure I simply avoid bets that have very high house edges. But a fellow player recently told me that she bets on the ties for the first three hands of every shoe.  This seems like a completely reasonable approach to me, because she is limiting the amount of total money she will allocate to burning on side bets and whenever a shoe starts with a tie as one of the first three hands, she will get an 8-1 payoff.  Yet there are other players who make side bets a big part of their regular game play but I don’t think that they have given much thought to how those bets contribute to the premature depletion of their bankrolls.  My recommendation to anyone who throws regular money on the dragons and ties is to track the hit ratios, once you see how bad it is and how much it is costing you, you might come to realize that it is simply not worth it.  I know that a lot of players bet the dragons and the ties as a lifeline to revive a bankroll that is nearing zero. But a better approach would be to simply stop playing while you still have some money left and come back and play another day, because the much more likely outcome, is that you are going to lose a disproportionate number of those bets and it will only accelerate your demise. So far I have provided you with a lot of information on the underlying mathematics of the game of Baccarat and casino games in general and while casino games can be fun to play, they are structured in ways that make it easy for you to lose your money but difficult for you to win much.  Most casino games don’t require a lot of skill to play but they do require you to understand and to appreciate the odds you are challenging when you decide to play them.  If you want to have any chance at actually winning, you will have to master self-discipline, patience, wisdom to develop an effective strategy to reach your goals and the courage to see that strategy through. In addition, you’ll understand that it takes a considerable amount of money to survive the downswings.  Once you fully understand the risks you are taking, then you will be able to appreciate why it is difficult to “beat the house” you will also abandon any notions of earning a stable living from gambling because the best you will be able to accomplish is to lengthen the cycles between booms and busts, this means by implication that when you are not winning, you will be losing, breaking even or recovering from a past loss therefore, you will really have to enjoy the journey and you will discover that to make (win) money playing this game on a near persistent basis is a lot of work, so much so, that you really would be better off doing something that actually guarantees a payoff that is, of course, unless you actually enjoy the thrill of the chase which can be a lot of fun every so often.  But do it do much and too often, and you will find it to be a major source of aggravation, frustration and dred.  So it is paramount that you spend some time away from the game to get your bearings.

A subtle effect of gambling is that once you get into the games you are encouraged to go for broke in an attempt to score a win therefore, it is imperative that you first define what it means to win and second, define what risks you are willing to take to score this win.  Finally, and most important, what it will mean to you if you are unsuccessful? You will discover in the end that gambling is about you.  It is about the kind of person you are, in terms of the utility you assign to your money and your time.  For example, in playing Baccarat for over a year as part of my experiment,  I have wagered over $300,000, won about $30,000 lost about $23,000.  The game edge has cost me about $7,000 for a net result of Baccarat which is zero.  The casino on the other hand finished $7,000 in the black.  This brings us full circle to lesson 4 “Understanding the Concept of a Negative Expectation Game” where the casinos profits are determined by the following formula:

Profits = (Total Wager) x (Edge)  

When you look at my numbers:

$7,000 / ($300,000) = 2.33%

This result brings me back to something I said earlier and that is, when playing games that have a house edge you will pay in one of two ways, either in terms of losses or through reduced winnings. I paid a little of both and this outcome illustrates why it is so important to know how far ahead or behind you are at all times, as  it is the only way you can play and keep the edge low.

Chapter 7

Winning the Long Game

With the experience of hindsight, I can look back at the games I played especially the ones I lost and see that in most cases I killed myself.   I did this in several ways:

1. Not playing with enough money.

2. Not betting progressively (playing scared)

3. Quitting prematurely (being scared of losing streaks)

4. Not having a plan (how much I want to win vs how much I am willing to lose to achieve that win)

5. Playing while tired. (not following through, lack of will)

In addition to other things I have outlined in the book, these were the primary reasons I left money on the table which means that I lost more than I had to. Once I got a firm grasp of the fundamentals, most of what is covered in this book.  I came to the conclusion that the only way to win, especially if you want to play a while, is  to have as wide of a spread as possible (the difference between your lowest bet and your highest bet).  Furthermore, another essential aspect is to press your wins or bet progressively, this is something you will likely have to train yourself to do.   This is because, your natural inclination is to protect your wins and the best way to protect your wins, is to get up from the table.  If you can afford it, you want to start with at least a 1:100 spread that is, if the table minimum is $10, you should be able to bet up to $1000 if necessary.  The primary purpose of these larger bets is not to win money as much as they are necessary to keep your loss balance from growing out of proportion to what you can win.  Remember that it is easier to lose these games than to win them therefore, you need to counterbalance this aspect of the game.  A spread of 1:100 with a win target of $100 (10) units has a 90% chance of success. But once you play longer to use that same spread to go for $200 win, your chance of success drops to 83% which means that the threat to you losing your $1,000 bankroll jumps from 10% to 17% this threat will keep rising the longer you play and the more you try to win.  The bigger you make the spread the better.  I know that people make fun of me when I sit at a $10 table with a $10,000 bankroll and start betting $10 a hand but I hope that after reading this book, they will be able to appreciate the wisdom of doing so, especially considering that bet size is relative to bankroll for example, if I bet $1000 per hand and I win 10 hands but lose 11 not only will I be broke but I would be $1,000 in the hole.  This outcome would be no different from the guy who walks up to the table with $100 bankroll and bets $10 per hand.

But because my spread is 1:1000 my chance of winning $100 is 99% and of winning $200 is 98% which means that the corresponding risks to my bankroll is 1-2% and furthermore,  I can bet my way out of a bad situation without any real risk of going broke doing so, and this fact inspires confidence.  Therefore,  thrill or fear is limited to not knowing the length of the adverse run or downswing.  But it is not in anyway related to leaving the table broke.  players with spreads that are less than 1:100 are particularly vulnerable to having their money chipped away at especially, if those players don’t have an established win target or a betting strategy that would allow them to play for a while and have a decent chance to win some money.  These players best chance to win comes from making as much as possible from the fewest bets as possible and quitting while ahead.

Once, I got on the right path which means that I started winning just about as easily as I see people lose, as winning just requires varying degrees of effort in terms of the risks you are willing to take to win.  It wasn’t that I discovered some unknown branch of mathematics that made the game consistently winnable, but rather, by tearing the game apart and looking at the underlying mathematics including volatility I was able to see  and study the relationships starting from the underlying mathematics of the game all the way through to the players experience.  Because I have lived long enough to know that most discoveries are not entirely unique I started doing research on the concept of “winning more when you win than lose when you lose.” With that search, I learned that Seth Theobeau of (http://www.sethbets.com/aboutbaccarat.html).  Seemed like the only person and the most credible authority on something he calls Targeted Betting.  While I would love to take credit for being the first person to conclude that the only way to win at Baccarat is to bet in a way so that your average win is larger than your average loss.  Seth appears to have pioneered the idea.  Furthermore, he has produced reams of compelling data to support his assertions. You can read his blog here (http://targetbetting.blogspot.com/).  I have no affiliation with Seth and I only bring him up because I think he deserves the credit for his work in this area and second because his findings mirror both my technical and practical findings.

In addition to simply documenting my findings, the thing that motivated me the most to finish this book was a conversation I have with another player who like so many times before, sat at the same table with me, played the same game but at the end she was broke.  She offered to buy me a drink and started the conversation with how she always loses.  The she said to me, “you always win, you never lose.” I corrected her by informing her that I lose just like everyone else just not as often or catastrophically as the other players.  Depending on how I decide to play, I can break even, and even is good in a casino.  I can push it and blow away some of my winnings, or finish a few bets behind or simply quit when I am ahead.  Which is an action I am much more likely to take than any others.  I explained that I am not special, it really just depends on the math and what it means to win.  She looked at me with tears in her eyes and said “Can you tell me how to win?”  I was stunned into silence because at that moment, I could see her desire for some kind of holy proclamation and I knew that any credible answer I could give to that question would be too long and too complicated to provide to a person who had just finished getting beat up at the tables.   So every time I think about her and many others, it motivated me to answer the question and this book is the beginning of the best answer I could give to the question.  If you started reading from the beginning, then  you have been presented with concepts which will help you to understand  and process the information I am about to give you in the spirit it is intended.  However, if you are starting here, you need to go back and read the book from the beginning because every subject is dependent on the one before it and there are no shortcuts to success when playing a game of chance where the odds are stacked against you.

Lesson 9

Understanding the Long Game

To play Baccarat as a long game you need five things and they are:

1. A Goal

2. A Bankroll

3. An Effective Method

4. Discipline

5. Time

Let’s start by defining a long game, a long game in Baccarat is a series of shoes that you play as a single long game, and your goals are going to be defined and achieved over the long game. Individual shoes break this long game up into neat little boundaries of time and play. Remember that a shoe contains about 80 hands and it takes about 2 hours to play from start the finish.  Therefore, if we were to set a 100 shoe limit, we are looking at about 200 hours of gameplay and about 8,000 decisions.  If you are relying on any kind of bet placement system you can expect your hit ratio to be somewhere in the 30% to 40% range which means you will miss about 60% to 70% of the events that are available to you.  Therefore, I recommend that you pick a side and stick to it. If you like player, bet player and if you like banker bet banker.  If you want to change between the the two occasionally you can do that too. But be warned the more you chase individual decisions around, the higher your miss ratio climbs.   There is nothing worse than looking at a tote board that looks completely fine and you realized that you have missed 10 in a row because you were always in the wrong place at the wrong time.  While it is hard to do, line betting can increase your hit ratio for the events you care about to 100%.  This will be really good in shoes that are lopsided in your favor where your side beats the other side by 20 points.  However, it will be a bad day when the opposite happens.  The good news, is that the vast majority of shoes you are likely to encounter will be somewhere in between those two extremes where the banker and player events will reach parity or will differ by up to 7 to 8 points per game. The bad news, is you will never know what you are going to get when you sit down at the table.

Within each shoe is 4 quarters composed of 20 hands each, you are going to start and end your sessions inside of those quarters.   Adverse conditions may cause you to not score any wins in a quarter, other times, you will win really well in the first quarter, but won’t do anything  but lose in the next two only to get bailed out in the last quarter of the game.   This can happen during any point of the game and is an effect of volatility at work.  You can use your money card to track the distance (hands) between winning and losing events. Sometimes, the volatility in a game is constant other times, it is uneven.  I am telling you all of this because you can use the volatility present in the game as a marker for when you should finish a session.  My personal preference is not to play a shoe longer than I have to reach a particular win target.  The thing to always keep in mind and never forget is that you are playing a game and the points that you accumulate amount  to money. The more points you have the more money you have.

Lesson 10

Establishing Clear Gambling Goals

If you are a regular Baccarat player or a regular casino patron, you want to get a win/loss statement from the casino so that you can establish how far behind you are. We know from previous lessons that $10 = 1 unit and 1 unit can be thought of as 1 point.  Once you have your win/loss statement, you should convert the negative amount into points and then play  the casino to get that point balance to zero.  For example, if my win/loss statement showed a loss of $800.  I can convert this amount into units which would be 80 or points.  With this number in mind, when I play Baccarat I can start chipping away at that negative number (5, 10, 15, 20) units at a time until the balance reaches zero.  Once the balance reaches zero, then you will be ready to work on the real plan and it starts like this:  

1. If you have a bankroll that is less than $1000, for example, $300 then you want to try to build your bankroll up to $1000 or (100 units / points).   For a 90% chance of success,  your win target should be set to $30 per session.  This means that you are going to risk losing $300 to win $30.  There is a 10% chance you will lose your three hundred bucks before you can win $30.  Therefore, if you want to press and protect your fragile bankroll, you should bet the winnings only that way if you lose, you will be back at zero and not behind.  Then you can start all over again.  In terms of utility, a $300 bankroll can buy you 30 chances to win 30 bucks before you go broke.  Raising your base bet by $10 cuts the number of chances you can afford in half. Therefore, you probably want to use a betting method that is a combination of flat bets and parlays.  Flat bets to keep you from going broke too fast and parlays to act as 3 x multipliers when ever you can win two bets back to back.  If you can roll a $300 bankroll into a $1,000 bankroll then you can pat yourself on the back because you would have succeeded in tripling your bankroll.  Now, because you are playing a Long Game, you don’t need to try to accomplish this in a single shoe.  The overall idea is to try to win some points in every shoe you play without being sent to the lockers because you went broke.  If you are starting with a $1000 bankroll, your goal is to reach $3,000.  If you can reach that amount then you can pat yourself on the back because you just tripled your bankroll.  You will want to keep adding $1,000 as often as possible and if you are successful overall after about 100 shoes you should have about $15,000.  You want to set your milestones low, for example, instead of thinking about $3,000.  Just work on getting from $1,000 to $1,500 and from $1,500 to $2,000 so on  and so forth.  While you can always take this money out of the casino,  I recommend leaving it in the chip bank for two primary reasons first, because leaving your chips there will keep you focused on what you are trying to accomplish and second,  you can use those winnings to insulate you against any losses you might take and while it will be a setback, those losses are only temporary.  Once you reach the $3,000 milestone, it shouldn’t be necessary for you to bring any new money into the casino as you can use half of your winnings as your gambling bankroll.  Furthermore, the only money you should always take from the Casino is money related to your net losses.   Now that I have outlined the goal and provided some information about how you can go about bootstrapping your bankroll, let’s wrap up with the final dimensions which are; playing using an effective method for system.  I generally shy away from prescribing to people exactly what betting system they should use when playing because everyone has different bankrolls, win targets and risk tolerances. Therefore, people should custom design a betting system that works for them.  For instance, I use a mashup of the following betting systems:  Fibonacci, Parlay, D'Alembert and depending on the circumstance, I can switch to other layouts.  Therefore, whatever method you use is good enough if you can triple your bankroll using it.  The last two aspects I want to discuss are discipline and time.  If you are actually patient enough to take the time to accomplish the goals that are outlined here playing Baccarat, accept the setbacks with grace and dignity and learn the lessons they teach, not only will you win some money, but you will have obtained something far greater and that is you would have mastered yourself.

Good luck and see you at the tables.

Chapter 8

Playing the Long Game

Welcome back!  If you’ve made it this far, then you know probably more than you wanted to know about the various aspects of gambling.  In fact, mastery of self and the effective management of your money is the most important aspect of gambling.   Another important factor which is often under appreciated is time management.  In this chapter we will cover what you’ve been waiting for and that is some examples of how what I’ve talked about so far looks like in actual practice. In the last chapter,  I left off by covering the concept of the Long Game and we will pick up on that concept.   Basically,  a Long Game is a series of games you play towards meeting an overall goal.  The goal will largely take two forms:

1. Recovery games, these are games where the win balance are applied toward recovery of your net loss that is any amounts that cause you to be to the left of zero.  Once your wins are to the right of zero, then the recovery games  can be used to recover any loss units due to wipe outs or setbacks which should be rare with the right confidence levels and methods.

2. Progress games,  these are games you are playing to gain ground towards

reaching your win targets.

In chapter 7 titled “Winning the Long Game”of the last book we talked about taking a $1,000 bankroll and trying to reach $3,000.  I also talked about how to bootstrap a $300 bankroll into a $1000 bankroll. However, I will start this book by first covering concepts related to the utility of money and casino gambling, then I will dispel a popular myth regarding mechanical gambling systems when applied to games like baccarat.

Lesson 11

Understanding the Utility of Money when it comes to

casino gambling

Every gambler who plays casino games places a value on the money they are risking in order for a chance to win some money.  In fact many dream of being able to find a way to take minimal risks but score life changing payoffs.  Yet others, dream of a situation where they can turn gambling into a reliable source of income.   There are three fundamental challenges that stand in the way of 99% of gamblers reaching this goal:

1. Time

2. Money

3. Math

Casinos are in the entertainment business and time is money so built into each of their games is an edge which guarantees the casinos a payoff which amounts to a fixed percentage of the total amount of money you cycle through their system.  Therefore, the longer you play their games the higher the cumulative costs to your bankroll.  This edge doesn’t mean that you will go broke, but it does mean that after a significant amount of play the edge will grow to consume the entire value of your bankroll.   If you don’t keep track of your win loss ratios these amounts can grow to consume your entire wealth!  This is why people think gambling is dangerous,  I don’t think that gambling is dangerous, I think the way people gamble is dangerous.  The games never change, what happens is that over time the players  change.  Another way to think about the function of edge relative to your money is to picture a wheel.  This wheel is your money,  on opposite sides of the wheel are two values win and loss, these two values counterbalance one another and the more you try to control the position of the wheel the faster it spins.  Edge is a blade that is slicing off a thin layer of that wheel with each passing turn and over time that constant grinding would wear the wheel down to nothing.  The smaller the wheel the faster this happens the bigger the wheel the slower this happens.  Conversely, the slower the wheel turns, the slower this happens.  The function of edge is something that cannot be overcome because basically it is the built in cost of playing the game and is therefore a mathematical reality.  But the edge is separate from winning and losing because the math is set in such a way that the net result of a long series is break even, finish slightly ahead or slightly behind due to standard deviation. Gambling is therefore a very simple mathematical proposition:

Can you Win X before Losing Y?

Which brings us back to the first concept as it relates to the utility of money when gambling and that is time. Let’s start with the 1% of gamblers.  All gamblers should know that at a minimum the more money they have the more chances they have to win.   They also know that to get the most mileage out of their money and to overcome the break even effect  of the game, they will need to resort to some form of progressive betting which means that they should not make bets so big that they cannot sustain additional losses, or so small that the wins and losses cancel each other out.  This gets us back to the conversation on betting spreads that is, the difference between your lowest bet and your highest bet.  A single well funded player with a bankroll of $1,000,000 or more  would be able to play the casino for 9,000,000 decisions, such a player, would have 99% confidence that he can win $10,000 virtually every time he plays. The bigger the bankroll the bigger the confidence.  Such a player or players could present a real challenge to the casinos bottom line.  For example, lets say you have 12 players that have bankrolls of at least $2,000,000 each and they decide to play  baccarat where they all play follow the leader and the objective of their play for the evening is to start with $100,000 players bankrolls bets in an attempt to parlay a winning bet 4 times.  The size of the players bankrolls will give them 20 chances to  do something that only has a 12.25% chance of being successful in any given attempt, which means that the casino has a 87.75% chance of gaining $24,000,000. However, if the players win, and they can pull this off a couple of times during the night, then the situation would not be good for the casino as the players combined winnings would total $37,200,000 for a single successful attempt.  What if they were able to score three wins!  So the casinos protect themselves by setting table limits which effectively hobbles players whose bankrolls can present a serious challenge to the casinos bottom line. Furthermore, players of this type are not likely to hang around the casino long enough to allow  their winnings to end back up in the dealers tray. But there is another practical reason more rich people don’t gamble and that is time, you see, anyone with a considerable amount of money probably got that money not by chance but by taking a series of very deliberate actions.  Furthermore, people who have money, value their time and when you value your time, you will come to realize that there are much more efficient ways to allow your money to work for you.  Sitting in a casino making wagers doesn’t qualify . To appreciate this concept, imagine building a business where you put in a lot of work up front but once everything is up and running, you can hire other people to make sure it keeps working, then you can sit back and simply collect the returns for years.  Therefore, for people with a lot of money, who could win every time they play, means that if they decided to engage in the act of gambling, they themselves wouldn’t be gambling but actually working the tables for their money, and the time  and effort required to do this has a  low utility for someone who has more money than time.  Ironically, the people who could really win in ways that others can only dream of are the least likely to play especially at low stakes because it doesn’t present a challenge and is simply not worth their time.   Which means by extension gambling has a high appeal to people who have more time than they have money.

Of the people who have the time to invest in gambling, their main problem is not having the money to do so at a level which would make it worth their while. But when you consider the steep losses that many of these players have taken some of which runs into many thousands, it becomes evident that they had the money but didn’t really understand the math and furthermore, they were and are  doomed by the impulsive nature of their greed and fear.  The players play styles while rational, only contributes to their demise this is because most players are  trying too hard not to lose so they are killing their chances to actually win. To understand this concept better, you only need to know that most of the games are designed so that players will lose slightly more often than they will win.  So that when a player tries to control this by making sure he can win more often than he loses he will only create more volatility.  Going back to our example where your money is a wheel, the more you try to control the position of the wheel the faster it turns.   In a game like baccarat players focus too much attention on trying to do the impossible like predict the future and scoff at the idea of simply reacting to the past as a dangerous and risky idea.  Furthermore, betting on a single outcome is considered a “boring” way to play the game.   These are all curious positions especially when the math tells us that both events are equally likely we just don’t know in which order they will come.  But if we are applying hard math to the game, it won’t really matter much because whether we get the cheese or the hammer is totally determined by how something happens and if we can craft a response that captures the vast majority of the hows, then we will either win in ways that is consistent with our confidence levels which are based on hard math or we will lose every penny of the money we are risking trying.    Which brings us back to our proposition can we win X before we lose Y which is the fundamental essence of baccarat and gambling in general.

I would like to dispel the myth that no mechanical system has a chance at winning baccarat in the long run, and while I agree with the overall sentiment of such an assertion,  I completely disagree with the proposed alternative of relying on bet placement systems as a viable alternative. Here’s why:

1. Baccarat is a perfectly designed, virtually symmetrical game that uses zero as its center of gravity.  But, the house edge, causes the center to be negative one. Therefore on a number line the game would look like so: Zero is the natural center of the game, but the house edge causes the game to skew to (-1)

-10 -9 -8 -7 -6 -5 -4 -3 -2 (-1)  -- 0 --  1 2 3 4 5 6 7 8 9 10

This mathematical fact has the following influence on flat betting systems where a single unit is bet consistently over the various curves of volatility and the net result is a -1% return.  But what this does to the other two types of betting approaches is far more interesting.  Let’s call them money management systems for clarity (what we do with our money). Most money management systems will fall into one of two camps and they are: positive progressions (bet more when winning) which pushes to the right of zero.  And, negative progressions (bet more when losing) pushes to the left of zero.  Both approaches, change the players experience in the following ways:  A positive progression accelerates away from zero during winning streaks but it only takes one loss to bring this one crashing back towards zero or to the negative side of the scale.  Furthermore, it is a constant struggle to stay above zero as the gravity of the game pulls the player back towards zero which means that the game is constantly grinding away at the bankroll.  Interestingly, negative progressions pour money into the game by loading up the negative side of the scale and with the right offsets, one of two things will happen, the player will go broke before scoring a win or a single win will recover all losses and thrust the player into positive territory.  The bottom line, there is an underlying level of mathematics operating at all times during the game that is shaping the players experience and the more you understand how this operates the better you can understand what you can and cannot change.  

2.  No matter how many different combinations there are, the math tells us that at a basic level there are only three outcomes to every single game (each hand): banker wins, player wins or tie.  The math also tells us that the most common events are singles, the second most common are doubles, followed by triplets.  The longer the streaks the more rare the occurrence. Ties happen about 1% of the time or on average about 8 every 80 hands.   The problem is that we will never know the exact composition of the shoe we are playing but instead of trying to guess the composition which is basically what bet placement systems attempt to do, we should trust the underlying math to deliver the game to us and we simply respond mechanically using pre-establish and consistent rules. By doing this, we will win what we expect to win, and lose, what we expect to lose when we lose, on a basis that is consistent with our predefined confidence levels. This is in effect using the underlying math to our advantage.  Now, I can appreciate why people religiously rely on bet placement systems even though mathematically they can be demonstrated to be no better than single sided betting and in many instances worse.  Bet placement systems give the player an illusion of control that is, when the shoe is consistent with their chosen pattern or trend plays they win but when it is not they lose.  What bet placement systems do, is they cause players to have a lot of misses in situations where they could have benefited  from the events that actually showed up rather than betting where they predicted the next event would be.  When a player is out of sync the misses really start to add up and the losing streaks can be long and brutal.   Therefore, the  path of least resistance, when playing baccarat would be to pick any event and use your money to seek out matches and figure out how to use those matches to your advantage for example take the following shoe (keep in mind that you don’t know what is going to happen, so you are looking at the past.)  I am going to show you several examples of what happens when you let the math determine if you win or lose.

Reference Shoe:

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

B

P

P

P

P

B

B

P

B

B

P

P

P

P

P

B

P

P

P

B

21

22

23

24

25

26

27

28

29

30

31

32

33

34

35

36

37

38

39

40

B

P

B

B

P

P

B

P

P

P

P

B

B

P

P

B

B

P

P

B

41

42

43

44

45

46

47

48

49

50

51

52

53

54

55

56

57

58

59

60

B

P

B

P

B

B

P

P

B

P

B

P

B

B

P

B

P

P

P

P

61

62

63

64

65

66

67

68

69

70

71

72

73

74

75

76

77

78

79

80

P

B

P

B

P

P

B

B

B

B

B

P

P

B

P

P

B

B

P

B

Let’s tear this shoe apart by event distribution:

Event

Count

B

36

P

44

BB

12

PP

16

BP

22  (10)  *

PB

22  (10)  *

Let’s look at the stats in terms of hit ratios for each event type: (wins / total hands = 80 )

B = 45%

P = 55%

BB = 15%

PP = 20%

BP = 27% (12%)*

BP = 27% (12%)*

As you can see from the above numbers if you back single events either banker or player your hit ratios will never be worse than what is delivered by the game.  The more events you back, the lower your hit ratios become.  Simply backing doubles (BB or PP ) on the same line (player or banker) cuts your hit ratio in half.  But you really don’t need to win a lot of hands if you concentrate your efforts on winning the hands that are delivered by the shoe, then you win whenever a match comes along and you start a new series in search of the next win.  The math tells us that if our match criteria is BB then we win 12 hands and if our match criteria is PP then we win 16 hands.

* When we set a match criteria that jumps from line to line, (PB or BP) we run into a problem that is fundamental with bet placement systems and that is, being out of sync with the events as they come out of the shoe this produces the worse possible hit ratios. Bet placement systems attempt to address this by waiting out events, playing on paper before betting and other voodoo.   But all of that effort is a futile attempt to predict the future.  To the players that rely on such systems, when the matches occur, the results seem inevitable.  But this is like a broken clock having the right time twice a day.  While there were literally 21 BP and PB events we are only able to capitalize on only about 11 of them because by the time we figure out the pattern it has already happened or is not what we think that it is going to be.  All of this will become clearer when we start to measure the volatility by counting the number of hands we lose before we encounter a winning condition.  We can measure the volatility by counting the number of hands we lose between each winning event.  Knowing the distance between matching events serves as an important metric for what kind of money management system we apply to the game.  It gives us some pretty good ideas about bankroll drawdowns and we can use this information to establish bust points that is, when we consider the losses extreme enough to simply give up.  Something you will likely want to do if you find yourself on the wrong side of standard deviation.

The numbers inside of the brackets represent the number of loss hands before encountering a win for example [5,1,5,3]  means we lost 5 hands between the first and second win , lost one hand between the next, lost 5 hands before the next and lost 3 hands before the next so on and so forth. By averaging these results we get  the center point.

Banker Events:

[5,1,5,3,1,2,4,2,2,1,1,2,1,1,1,5,1,2,2,2,1]  average distance = 2.41

Player Events:

[1,2,2,1,2,2,1,2,2,2,1,2,1,1,2,1,1,1,5,1,2,1]  average distance = 1.63

BB Events:  (doubles)

[5,1,9,1,7,2,2,3,6,12,0,6,2]   average distance = 4.30

PP Events

[1,0,5,0,2,6,1,0,2,2,7,8,0,4,5,1,4]  average distance =2.82

BP Events (opposites)

[4,12,4,5,1,1,0,4,0,18,8]  average distance = 5.18

PB Events (opposites)

[14,2,10,2,2,0,0,8,4]  average distance = 4.2

As far as baccarat shoes go, our sample shoe is pretty much typical of the type of shoe you will find on any given day at the casino.   In terms of event distribution, you want to stay with single-sided outcomes and capitalize on doubles as the more you hop from line to line, the lower your hit ratio drops.

When I play baccarat,  I play mechanically, that is, I have a fixed set of rules and I  play until I hit my win target or bust. Therefore, when I sit at a table I never know if I am going to get the cheese or the hammer.  It all depends on the math.

I have many methods but my favorite one is a mashup of Fibonacci, Parlay, D’Alembert and Star.  I have three levels of risk:  High (bust point set at $3,120.00)  Medium: (bust point set at $1,560.00 ) and Low: (bust point set at $1,260.00).  The following is a list of my methods i.e. A B C.  

Method A = High Risk:

1 1 1 2 3 4 5 6 8 12 15 20 28 50 | 50 28 20 15 12 8 6 5 4 3 2 1 1 1  = $3,120

Method B = Medium Risk:

1 1 1 2 3 4 5 6 8 12 15 20 | 20 15 12 8 6 5 4 3 2 1 1 1  = $1,560

Method C = Low Risk:

1 1 1 2 3 4 5 6 8 12 | 12 8 6 5 4 3 2 1 1 1  | 1 1 1 2 3 4 5 6 8 12 | 12 8 6 5 4 3 2 1 1 1 = $1,720.00

Basically, each method is a bet that is distributed over a series of hands.  The idea behind the sequence design is to give me the maximum amount of chances to net a small gain (usually between $10 - $40 ) per session or more in the event of adverse losses that turn around before or at the highest bet in my sequence.  In other words, If am going to lose the sum  indicated at the end of each string, then that means that underlying math made it impossible to put together two back-to-back wins in head to head play.   Therefore, using Method A, I give up after losing 28 consecutive attempts.  When using Method B, I give up after losing 24 consecutive attempts and when using Method C (described as low risk because you are likely to encounter enough wins to make the loss less than the sum of method B which is, $1,560) I give up after 40 consecutive losses.   The bottom line with each one of these methods is that they are structured in a way that I maximize my chances to capture a win and when the math is against me, then my demise is delayed. The win targets and confidence levels for each method are as follows:

If win target is 10 units

Method A confidence is 96% risk is 4%

Method B confidence is 93% risk is 7%

Method C confidence is 92% risk 8%

If win target is 20 units

Method A confidence is 93% risk is 7%

Method B confidence is 88% risk 12%

Method C confidence is 86% risk 14%

All of the shoes listed in the next section as well as the methods, are derived from Method A which is both high risk and high confidence.  

First we start with a sequence of 28 numbers in units:

1 1 1 2 3 4 5 6 8 12 15 20 28 50 | 50 28 20 15 12 8 6 5 4 3 2 1 1 1  = $3120

The rules for betting are as follows: (First 14 bets in the sequence 1 through 50)

1. Bet base unit if we win let it ride until next bet.  If we win next bet then start over.

2. On loss, proceed to next number in the sequence and then apply rule number 1

The rules for the second set of bets in the sequence 50 through 1

1. Bet base unit, if we win, let it ride until next bet.  if we win next bet  in the sequence, repeat rule.

2. On loss, go to next bet in the sequence and apply rule number 1

Remember,  I recommend that each gambler develop a method that they feel comfortable with and is appropriate for your bankroll.  Also keep in mind that every method has a nemesis that is,  a shoe that when encountered will kill it dead which means you will lose.  This is because mathematically, no system can overcome losing a disproportionate number of bets than you can win.  Furthermore, when playing baccarat with any kind of method or system it is not what happens as much as how that will determine your level of success or failure.

Depending on your level and style of play, the best shoes will be those with high volatility.  As high-volatility produces a lot of data points.  Shoes with low volatility produces less data points and wider bankroll swings.  

Mathematically speaking the key to winning Baccarat is your average wins have to be greater than your average losses.  The problem with this approach, is you never know what kind of shoe you are going to get when you sit down at a table.  Take for example, two shoes I recently played.  The first shoe had high-volatility and was an overall winner for me backing banker the whole time.   The second shoe was a big loser for me betting banker the whole time.  That is, my method failed because the two-count on my line was low and sparse (spread out).

Let me explain how to read the data you are looking at:

Bet placement:  Banker Line

Table Layout: 20  x 12  

1. Numbers 1-20 are the hand numbers

2. Top line is banker events

3. Bottom line is player events

4. Vertical lines are Ties

5. Bolded items on the money charts are winning bets represented in units (all other numbers are losses)

6. Blank spaces on the money charts indicates a winning hand but an unresolved bet.  Lots of these are good as they help to carry my money through the game and slow my progression.

Casino:  Rivers

Location: Des Plaines IL

Description: S1

Date: December 01, 2012

Shoe #1

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

X

X

|

X

X

X

X

X

X

X

X

X

X

X

X

|

X

X

X

X

X

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

|

X

X

X

X

X

|

X

X

X

X

X

X

X

|

X

X

X

|

X

X

X

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

X

X

X

X

X

X

X

X

|

X

X

X

X

X

X

|

X

X

X

X

X

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

X

X

X

X

X

X

X

X

X

X

X

X

X

Money Chart for Shoe #1 (20 x 8)

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

1

1

3

1

3

1

1

3

1

1

3

3

1

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

1

1

2

12

1

1

1

6

3

1

1

1

6

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

1

3

3

1

3

1

1

1

2

9

1

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

3

1

1

1

2

9

1

1

Session Summary Shoe #1 December 01, 2012

Banker Events

39

Player Events

31

Total Wins

$720.00

Commission Costs

$36.00

Net Win

$684.00

Total Losses

$330.00

Profit / Loss

$354.00

The volatility chart show the swings in bankroll in terms of units (numbers on the left). The numbers along the bottom of the chart shows the data points for volatility.

Rivers Shoe #1 December 01, 2012

Here’s an example of a shoe where I bust.

Casino:  Rivers

Location: Des Plaines IL

Description: S2

Date: December 01, 2012

Shoe #2

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

X

X

X

X

X

|

|

X

X

|

X

X

X

X

X

X

X

|

|

X

|

X

X

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

X

|

X

X

|

X

X

|

X

X

X

X

X

X

X

X

X

|

X

|

X

|

X

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

|

X

|

X

|

X

X

X

X

X

|

X

X

X

X

|

|

X

X

|

X

X

X

|

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

X

X

X

|

X

X

X

X

X

X

X

X

|

Money Chart for Shoe #2 (20 x 8)

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

1

1

3

1

3

1

1

1

2

3

4

5

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

6

8

12

15

20

28

50

50

28

20

45

12

8

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

6

5

4

3

2

1

3

1

3

1

1

3

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

1

1

1

2

3

4

5

Session Summary Shoe #2 December 01, 2012

Banker Events

25  (11 ties against the Banker)

Player Events

37

Total Wins

$650.00

Commission Costs

$32.50

Net Win

$616.50

Total Losses

$3,130.00

Profit / Loss

($2,512.50)

As you can see from the charts above, a shoe with high volatility gives you the best chance to win. Whereas, a shoe with low volatility can kill you especially,  if you  are betting on the wrong side of the streak.  A couple of things you can do when you think there is an adverse run against you is simply try to wait it out.  Your other option is to hop to the strong side and ride the streak.  The thing you will find difficult is knowing when to do this and sometimes a change to the other side will only result in additional losses as the shoe starts to balance out.  When in doubt, stop betting.   Another skill you will need to master is knowing went to get out of a shoe. that is, once you reach your win target you should quit.  Of course you can plot the numbers to see if staying longer would have resulted in additional winnings but it is better to be safe than sorry.

Lesson 12

“Gambling is a hard way to make an easy living” -- Lem Banker

If you can master and put into practice the concepts I’ve talked about so far, then you have graduated to the status of a professional gambler.  Welcome to the club!  Let’s talk a little bit about what it means to be a professional gambler,  like any profession, doctors, lawyers, engineers both mechanical and technical.  These professions have several things in common and that is, practitioners have deep knowledge about various aspects of their chosen profession.  But the really good ones have something that is far more important and that is wisdom.  The fundamental difference between knowledge and wisdom is simple, knowledge is knowing what to do. Wisdom is knowing if what you should do is a right or wrong decision in a given situation.   Case and point, you are in a dark cave wading through water.  You have a book of matches and a candle in your backpack.  If you can’t see, the solution to your problem is simple, you take the matches and light the candle. That’s knowledge.  Take the same situation, but this time instead of water, the liquid substance you are wading through in a dark room is gasoline.   It should be obvious for a host of reasons that the practical solution in this situation would be an extremely bad idea.  Therefore, those that recognize this are wise, and those that do not, well, they get the darwin award.  Professional gambling requires a few things,  the first and most important is emotional maturity and the ability to study and improve your performance.  It also requires you to be knowledgeable enough to know what you can and cannot change.   Furthermore, you will need the wisdom which only comes through direct experience to not give in to your irrational impulses because as a  professional gambler these failings, will only make bad situations worse and cost you money unnecessarily.  Now, if you have aspirations to gamble as a full time profession, my opinion would be that your chances are much better if you do it as a professional hobby rather than as a means of survival.  This is primarily because gambling is extremely risky, unstable and a scary way to make a living. It is one thing to play a game in which one outcome is that you can win money doing it.  It is another thing to have your livelihood riding on the volatility constant exposure to a game will yield.   It is also difficult to appreciate the psychological and emotional fatigue  that comes with the hours you’ll put in at the tables.  Furthermore, if you are not using your winnings to properly capitalize your bankroll because you are extracting money to pay for life necessities what happens when you hit a downswing?  Where is the money going to come from?   Gambling is a very slippery slope therefore, if you are taking money out instead of building your bankroll, then you are putting yourself at risk of going on a tilt. That’s why I say it is better to have another source of income as that will completely reduce the stress of suffering a downswing.  Furthermore, the larger the bankroll, the more decisions you can play and the only cash you should ever take out (especially) if you are going to continue to play, is the money related to your net losses.   Therefore, if you want to beat the casino, use their money and your time to do it. You can also opt to cash out at any point because one of two things will happen eventually, and that is, you will get tired and quit or go broke.  Here’s hoping for the former.

Chapter 9

The first 40 Hours of Baccarat

What follows is a summary of the first 40 hours (about 20 shoes) of Baccarat using Method A which is high risk, and has a bust point of $3,120.00.  This summary will cover 20 shoes of live game play. The charts containing the distribution of events and completed money sheets and volatility charts are contained in another book titled “Playing the Empire for Fun and for Profit Baccarat The Long Game”.  

It is true that gambling and investing in the stock market have a lot in common.  Contrary to the moral objections people have to comparing the two, the individual experiences in terms of volatility and the cost or brokerage fees which grind away at your money, in terms of individual experience, the outcomes are roughly the same, that is, most end up holding the bag or getting wiped out during the downturns, those that have a long term view and are properly capitalized survive for another round.  A few win and win big, while the majority jump in and out at different points along the roller-coaster ride.  The theory asserts that investing is a net positive in the long term, whereas for gambling, the math tells us that the long term prospects will result in a net negative.  I think the key distinction that is often overlooked is that of utility.  Most regular people don’t have a lot of interest in what happens over 100 years or billion baccarat decisions. What they really care about is what happens in the short term and that time horizon is going to be different for every individual.  When your money disappears in the stock market as it did in the 1920’s and in the most recent downturn of 2008 and other busts, people will tell you, that you are not giving it enough time.  But if you are a net winner in gambling, people think you are fool who is blinded by short term success.  A curious position considering that both  gambling and investing deliver the same individual experience and that is,  you win until you lose or lose until you win.

When you gamble in a casino you are putting your money up for direct risk for gain.  When you “invest” in the stock market you are paying someone to gamble your money for you. When you win, you win, and when you lose, you lose.   In both cases, you have two types of participants, those that take a measured approach, and those that go for the “quick kill”.   When you take a measured approach, you are subject to the same volatility, but your gains and losses are more gradual and stay within a defined range.  Which means, that in the up swings you will never win as much as you could win. But it also means that in the down swings, you will never lose a much as you could lose.  Those that go for the ”quick kill” ride the waves to the highest peaks but usually drown during deep downturns.  Market speculators usually experience a similar fate.  

 The following table shows the performance of one of my  $20,000 investments in the stock market over a 10  year period:

Year

Investment  $20,000

Starting Investment

$20,000.00

1

$16,262.00

2

$20,865.17

3

$23,310.65

4

$24,886.33

5

$28,517.00

6

$30,356.60

7

$20,281.24

8

$26,302.74

9

$29,611.62

10

$28,725.90

Net Gain after 10 years:  $8,725.90 which is an average appreciation of 4% per year.  This result was accomplished with no time investment on my part.

 

Volatility Graph for my 10 year investment

In casino gambling, you are constantly cycling money through a system that is not only volatile but where there is a function shaving off a fixed percentage of money with each revolution.  The following is a summary of the first 40 of 200 hours of Baccarat performance.  I bust once (shoe #18) for a setback of $2,314.50 which is a deduction of about 9 games (18 hours of my time!)  Without this bust, my gains after just 40 hours of play would have  equaled my 10 year performance in the stock market.  However,  when you are gambling, you are risking 100% of a lot of money to achieve that short term gain.

20 Shoes of Baccarat

Total Banker Events

716

Total Player Events

656

Total Action (Money)

$37,347.00

Total Wins

$21,660.00

Total Commissions

$732.50 (0.01%)

Total Losses

$15,687.00

Net Wins

$5,240.00 (14%) gain of total

From the above numbers we can get all kinds of statistics:

Average Action Per Game

$1,867.35

Average Win Per Game Gross

$1,083.00

Average Cost Per Game Edge

$36.62

Average Loss Per Game

$784.35

Average Net Win Per Game

$262.00

Volatility Graph hours 1-40

 Chapter 10

Hours 41-80 of Baccarat

The following table represents the next 40 hours of game play starting at shoe #21 through shoe #40.  We bust twice once at shoe #30 ($782.00) and again at shoe #33 for ($1,081.00).

 

20 Shoes of Baccarat

Total Banker Events

677

Total Player Events

669

Total Action (Money)

$44,192.00

Total Wins

$24,920.00

Total Commissions

$1,214.50 (0.02%)

Total Losses

$19,902.00

Net Wins

$3,173.50 (7%) gain of total

From the above numbers we can get all kinds of statistics:

Average Action Per Game

$2,209.60

Average Win Per Game Gross

$1,246.00

Average Cost Per Game Edge

$60.72

Average Loss Per Game

$995.10

Average Net Win Per Game

$158.67

Volatility Graph hours 41-80

 Chapter 11

Hours 81-120 of Baccarat

The following table represents the next 40 hours of game play starting at shoe #41 through shoe #60. We bust once at shoe #43 for ($1,280.00)

 

20 Shoes of Baccarat

Total Banker Events

618

Total Player Events

608

Total Action (Money)

$38,880.00

Total Wins

$21,710.00

Total Commissions

$1,085.50 (0.02%)

Total Losses

$17,170.00

Net Wins

$3,454.50 (8%) gain of total

From the above numbers we can get all kinds of statistics:

Average Action Per Game

$1,944.00

Average Win Per Game Gross

$1,085.50

Average Cost Per Game Edge

$54.27

Average Loss Per Game

$858.50

Average Net Win Per Game

$172.72

Volatility Graph hours 81-120

 Chapter 12

Hours 121-160 of Baccarat

The following table represents the next 40 hours of game play starting at shoe #61 through shoe #80.  During this series we bust about 20% of the time which meets the rates calculated for this particular method of play that is, we can succeed about 80% the time.  However, because I decided to use a high risk bet progression with a bust point set at a little over $3,120.00, the lost shoes pretty much wiped out all of the wins from this series leaving us near break-even. I bust in the following shoes: shoe #65 ($1,915.00), shoe #67 ($1,068.00), show #72 ($1,550.00) and show #78 for ($1,006.00). The size of these busts are about equal to the size of my net wins for the series and represents a setback of ($5,540.00). Here my losses plus edge account for 04% of my total action.

 20 Shoes of Baccarat

Total Banker Events

673

Total Player Events

633

Total Action (Money)

$41,276.00

Total Wins

$20,680.00

Total Commissions

$1,034.00 (0.02%)

Total Losses

$20,595.50

Net Wins

($949.50) 02% of total action

From the above numbers we can get all kinds of statistics:

Average Action Per Game

$2,063.80

Average Win Per Game Gross

$1,034.00

Average Cost Per Game Edge

$51.70

Average Loss Per Game

$1,029.77

Average Net Win Per Game

($47.47)

Volatility Graph hours 121-160

 Chapter 13

Hours 161-200 of Baccarat

The following table represents the final 40 hours of game play starting at shoe #81 through shoe #100.  During this series we bust twice in twenty games. Once in game #92 ($1,107.00) and again in game #100 for ($301.00). Total action for this series is $38,230.00  we gave up $1,059.00 to edge which represents 2% of total action and we finish with an 8% gain $3,091.00.

 20 Shoes of Baccarat

Total Banker Events

703

Total Player Events

711

Total Action (Money)

$38,230.00

Total Wins

$21,190.00

Total Commissions

$1,059.00 (0.02%)

Total Losses

$17,040.00

Net Wins

$3,091.00  08% of total action

From the above numbers we can get all kinds of statistics:

Average Action Per Game

$1,911.50

Average Win Per Game Gross

$1,059.00

Average Cost Per Game Edge

$52.95

Average Loss Per Game

$852.00

Average Net Win Per Game

$154.55

Volatility Graph hours 161-200

Chapter 14

 Betting Layouts

You should know by now that winning at baccarat takes more than just a system or method  which are nothing more than tools you can use to accomplish your goals.  Winning requires money, discipline, patience and the ability to accept  occasional setbacks. When it comes to betting systems, most are good for short term plays however, where they all fail is that no system can overcome losing a disproportionate number of wagers.  But how you apply your money to the game  has everything to do with the kinds of experiences you can have.  I saved the discussion of betting layouts as my final topic for several reasons, first of which,  I wanted you to have solid foundation as it relates to gambling and the risks involved.   The second reason of many, is that I wanted you to understand the dynamics of the game.  A lot of system sellers make bogus claims about their systems ability to beat the game, the truth is there is no systematic or non systematic way to win.  if you want to be in a situation where you can never lose, then you have two choices, the first, is not playing and the second is to have endless money.   The first choice is self-evident,  If you have endless money, you will never find yourself in a situation where you cannot afford to make a winning bet. The problem with this of course, is virtually everyone who plays the game doesn’t  have endless money therefore, they have to settle for a trade off and that is to use a betting system to apply money to the game systematically.  The reason this would be a trade off and not a winning approach is if you had an endless amount of money you could use just about any betting system you like and have a pretty good chance at winning.  But when you don’t have an endless amount of money, you are forced to apply your money to the game in a way that gives you the most bang for the buck and there are several ways to do this. Are there extremely poor ways to apply your money to the game? Absolutely!  Winning at baccarat requires three things that are peripheral to the game; bankroll, the will to execute the required bets and the grace to accept the outcome.   Most people that lose all the time, come up short on one or all three of these areas.  When it comes to game dynamics, progressive betting is the most effective approach to take when managing your money. The central idea of progressive betting is to always have some greater amount of money to the right of zero than exists to the left of zero.  As long as you still have enough money to apply to the right of zero then you still have a chance to win.  However, if you don’t have enough money to apply to the right of zero then you lose.   Sizing your bankroll to your method of play is a very important aspect of money management and establishing a method of play is a very important aspect of the game.  When playing baccarat, you are always betting for or against something, I call this your gamble.  For each person the gamble will be something different.  The simplest and most straightforward approach to baccarat is to play one side banker or player where your gamble is disparity that is, the difference between the two sides.  If your side has a higher count at the end of the game you win and if it does not you lose.   How much you win and lose by will be a function of your unit size and the total disparity.  Disparity between hands will shift back and forth during the game but the net result will range from 0 disparity to 2:1 or 20 points. Which means that when you are on the right side, you can win a maximum of 20 points and when you are on the wrong side, you can lose a maximum of the same.  Therefore, take for example a shoe where you bet bank every hand of the shoe from start to finish and you set your unit size to $40 to make every bet in the game, your bankroll would have to be 40 * 80 = $3,200.00.  If the final score of the shoe is Banker 46 and Player 29 then you Win ($588.00).  Here’s how:

Total hands without ties = 75 * $40 = $3,000 (action)

Total winning hands = 46 * $40 = $1,840.00 - $92.00 = $1,748.00

Total losing hands = 29 * $40 = $1,160.00

$1,748.00 - $1,160.00 = $588.00

If you were betting player every hand in this shoe you would be behind by  -$680.00

With this kind of gamble your best and worse shoes are going to be those with double digit disparity however,  the vast majority of shoes will have a single digit disparity with the average being around 8 points some shoes you will breakeven.  This is an example of a simple betting layout.  

My favorite methods are all variations on the same theme, my gamble is that I will be able to get two back-to-back wins in X number of attempts.  Typically, I am betting for repeats. Therefore, in terms of win/loss patterns LL = Loss and WL = Loss, only WW = Win.  All of my betting layouts are based on lengths that is, I am using my money to buy myself so many attempts to encounter a WW.  If I do not encounters a WW before I reach my last bet then I bust. However, if I encounter a WW anywhere along my string of base bets then I make a full recovery plus I net a profit.  All of my betting layouts have coded names like SBR-430-10 which means Session Bankroll $430 Bust Point  with ten total attempts. Let’s look at my sequence of numbers in SBR-430-10 and then we can look at how it works:

10 10 10 20 30 40 50 60 80 120

It takes two hands for each bet to resolve.  Therefore:

SBR-430-10

Bet No.

Bet Amount

Parlay Win

Loss to Date

1

$10

$30

$0

2

$10

$30

$10

3

$10

$30

$20

4

$20

$60

$30

5

$30

$90

$50

6

$40

$120

$80

7

$50

$150

$120

8

$60

$180

$170

9

$80

$240

$230

10

$120

$360

$310

 

What my layouts all have in common is that there is an offset between the base bet values to make sure the parlay wins cover the LTD (loss to date).  I reset on WW and begin a new session.   I keep playing sessions until I reach my win target or bust.    I have layouts that have up to 21 bets! For me, my methods contain the right balance of action and risk.  I can also switch between layouts dynamically if I choose.   However, experience has taught me that it is better to pick a layout prior to game play that gives a good balance between risk and reward and run with that.  I find that picking a layout with a run length of 14-15 is a pretty good balance.  This is because shorter run-lengths are subject to busting more frequently and longer ones simply cause you to lose more money in long downturns.  After you play for awhile, you will get some pretty good ideas about what is best for you.  All of my layout are based on negative progressions which are dangerous in forward game play for the following primary reason, when using negative progressions, you are raising your bets in response to losses, in the hope that you will be able to score a win before your money runs out.   Another issue with negative progressions, is if you stop once you reach a predefined win target, you always run the risk that you will give that money back + some when you bust in forward game play.  In other words, you win a lit bit slowly but you lose a lot fast.  A feature of my betting layouts is that they were all designed to compensate for low hit rates that is you can play for a while without knowing if you will close a cycle a winner or a loser.

A complete betting system is a combination of three key things and they are:

1. Bet Selection

2. Progression

3. Money Management

I have a baseline data set that I use to run my methods across for volatility testing that is, to see how they hold up against 8,000 decisions or 200 hours of live game play.  I run different methods across the same data to see the differences in performance of each method.  The first graph of each series shows bankroll fluctuations. The second graph shows per game volatility in terms of wins/losses that is, how many times we were ahead or behind and by how much.

SBR 430 10 10 10 20 30 40 50 60 80 120 is my weakest method and we bust a lot.  We were ahead 6% of the time and behind 94% of the series.

The next series of graphs show the performance of SBR-680

SBR-680 10 10 10 20 30 40 50 60 80 120 150 100 is a little stronger, we bust right out of the gate. We were behind 81% of the time and only ahead 19% of the time during the series.

The next series of graphs looks at the performance of SBR-1260.

SBR-1260 10 10 10 20 30 40 50 60 80 120 150 200 280 100 100.  This method spends 59% of the series behind and 41% of the time ahead during the series.

.The next series of graphs looks at the performance for SBR-1420

SBR-1420 10 10 10 20 30 40 50 60 80 120 150 280 360.  I use this method most often in live game play. Here we bust out of the gate (shoe #2) and we spend 55% behind and 45% ahead during the series.

The final series shows the performance for SBR-1760

SBR-1760 10 10 10 20 30 40 50 60 80 120 150 200 280 100 100 100 100 100 100 100. I developed this method to see if I could improve upon SBR-1420.  The numbers got slightly worse! 57% behind and 43% ahead.  

The mathematicians are absolutely correct about the long term negative expectancy of the game.  However, by simply bailing every time we hit +20 in a shoe, our ratios of winners to losers goes up significantly. The downside, is that if we are playing SBR-1420 we give up -140 units each time we bust which sets us back 7 games worth of gains.   The data also proves that my winnings were largely the results of playing a series where the composition of shoes encountered in live play produced positive results but there was an equal chance for them to be negative also.  To illustrate this concept, let’s look at what happens when we flat bet the same series.

The next set of graphs will examine what happens when we use  positive progressions against the same series.  With positive progressions we basically reverse the polarity of the outcomes that is, we sacrifice series of small losses in exchange for a large payoff. The gamble with this method of forward play is that we will be able to score enough big wins often enough to offset the number of smaller losses we will end up taking.   The game dynamics can make this method of play a net negative in the long run.  However, if you love the game as much as winning, both approaches are fun to play.

When using method 1-3-2-6: 10 30 20 60.  This progression is executed by going to the right for each win but returning to the left on any loss. We spend 6% of the time behind in the series and the rest of the time 94% ahead.

The method I am going to use to play my next series is called SBR-3020 and it is a six level positive progression: 10 10 15: 20 30 45 : 50 60 80 : 100 150 200:250 300 350: 400 450 500. Here are the results.  

Here’s the volatility chart for SBR-3020.

My next method is SBR-4150. 10 30 20 30 40 60 80 120 160 200 250 300 350 400 450 500. This progression is a little more aggressive, but really shines when there are positive streaks.  Here are the results from our 8,000 hand series. We were behind 1% of the time and spent 99% of the time ahead.

Here’s the volatility chart for SBR-4150.

As with all betting progressions, you have to be psychologically prepared for the down swings. When using a positive progression you don’t risk going broke from a bust out, but rather, it is death by attrition as long losing streaks can grind away at your bankroll.  Overall, positive progressive betting offers the best bang for your buck when playing a game like baccarat.

To  understand better why progression don’t change or affect the underlying conditions notice how similar the following graphs are to all of the ones shown so far.  The following graphs represent the underlying volatility of the series when no progression is used.

SBR-FB-10 this method contains one bet $10. With flat betting we spent 23% of the time behind and 77% of the time ahead.  The negative progressions in their attempts to stay ahead cost us so much money during the busts that we spent a significant amount of  the series trying to recover.  The positive progressions basically grind along in place during the down trends and take off during the up trends.

Here’s the volatility chart for SBR-FB-10.

My next series of graphs shows the results for 8,000 additional hands of baccarat.  Overall, the series is more balanced.  We examine the performance of the following betting methods:

1. SBR-FB-10 (Flat bet banker only)

2. SBR-120-1326 (Positive progression banker only)

3. SBR-3020 (Positive progression 10 10 15 20 30 45 … banker only)

4. SBR-4150 (Positive progression 10 30 20 30 40 60 80 … banker only)

5. SBR-1420 (Negative progression 10 10 10 20 30 40 50 60 80 120 150 200... banker only)

6. SBR-4150 (Positive progression same as number 4 player only)

There will be two graphs for each method, one will show the overall bankroll volatility and the other will show the win/loss volatility.

In this series we spend 7% behind and 93% ahead. By simply backing the banker we win the series.

When we use the SBR-120-1326 on the same series we get the following results.

With this method we spend 6% of the series behind and 94% ahead.  The next graph shows the volatility for this method.

A lot of players don’t like this method because in forward game play, you ping pong around in this series we lose all of our winnings half-way through the series.

With SBR-3020 we spend 6% of the series behind and 94% ahead.  Whenever we encounter winning streaks we see huge jumps in fortune. But you will also notice that we are largely losing ground between those peaks.  This is because we are reversing the polarity of outcomes.

Notice how the volatility chart mirrors the overall bankroll chart.

With method SBR-4150, we spend 5% of the series behind and 95% ahead.  Due to the aggressive nature of the progression, we really peak on winning streaks.  But, we also lose ground pretty quickly between them.

Just for comparison sake, I wanted to add a negative progression SBR-1420 to the series to see how it performs.  The next two graphs show this.

With SBR-1420 we spend 64% of the series behind and only 36% of time ahead.

Finally, let’s look at what happens when we back the player only using positive progression SBR-4150.  While you don’t pay commissions on the player bets, there is an edge buried in backing the player hands over the long run.

While there is an initial peak for player wagers, the overall slope for this series is negative.

Overall the player loses more bets to the banker.  Which is why if you want to lose the least about of money, you play the side that has the lowest house edge and that is, to bet with the banker. In my next book Baccarat the Long Game, we will start with an analysis of SBR-4150, how to setup your card for managing your money in forward game play using method SBR-4150,  how to read compressed shoe formats and a walk through of 100 shoes recorded and played at Rivers Casino in Des Plaines using this method for the entire series.

Thank you for taking the time to read my book, I hope that you found the wisdom imparted here useful.

About the Author

Lee Evans is the former Owner/Operator of LeeWare Development an Information Technology services company.  With more than 20 years in the business, he currently works as a Senior Level IT Consultant for the Private Security Industry and Several Technology Related Businesses.  Much of his prior written work is on the subjects of Technology and Sociology.  He is 41 and resides in Schiller Park, Illinois and Baccarat is his favorite Casino game.  You can reach him by email at: baccarat@leeware.com