There's been some discussion recently in the Handicapping Corner Forum about slot machines, casinos, racetracks, etc. Thought it would be an interesting point for me to give my 2 cents here about my views on the different speculation/gambling venues, and their relative advantages and disadvantages. For some, the casino is clearly the best place to spend their time. For others, the racetrack offers the best vehicle. First, let's understand the basic differences between the two. My purpose here is NOT to give you what the specific odds are for these games, as it is not neccessary.

So here it is - Steve's rambling guide to casino and track gambling - it's a long read, but should be interesting and fun.

When you go to the casino and play either the machines or table games (poker being the exception) you are playing against the house. They set the rules. They set the odds. I don't know about you, but, I'm not too crazy about playing for a lot of money when my competition is making the rules and setting the odds, especially where the rules plainly say: "WINNING NOT ALLOWED."

"Scuze me young man, but what exactly do you mean by "winning not allowed"? I never saw that rule?"

"Harry … is that you? I thought you committed suicide last year after that sure-thing 1-9 shot that you bet the wad on, bolted into the winners circle 10 yards after the gate sprang?"

"Never mind that son - I'm back in action now. Explain why winning is not allowed in the casino."

Well it's simple. With the exception of certain times at the blackjack table, the odds are always in the house's favor, all the time, in every game. There is not a single wager offered in a casino, which gives the player a potential payoff at odds which are more than the natural odds of the event occurring.

Craps
Craps is a real popular game. I hear people all the time telling me about how they can win at craps. I am proud to say, and will say this for all to hear, and will gladly say this directly to ANYONE who can look me in the eye with a straight face, and tell me that they are ahead at the craps table. To these people I retort: "Either a) you haven't played very much, or b) you are full of shit." On the whole craps layout, there is only one available bet on which the casino does not have a certain exact mathematical advantage - this is what they call the "free odds" bet.

The strange thing about the "free odds" bet is that it does not offer the player any advantage. It is a breakeven bet, made at the natural odds. Mathematically speaking, neither the player nor the house has an advantage on these, although emotionally, the house has a huge advantage here. And strangely, if you look at the craps layout, this "break-even" wager is not found anywhere on the actual layout! You have to know about it ahead of time!

The general rule at the casino, by the way, is that the more colorful, the more prominent and the more easily accessible the wager is on the display or table, the more house advantage it has. The wagers which carry the smallest house vig are found on the most remote portions of the spread, and can often barely be found, the extreme case being the odds bet at the craps table, which as I said before, doesn't even appear!

Now - if you play such a game, for any substantial period of time, there is only one possible result. If the house is gonna pay you 9:5 that a "10" is going to be rolled before a "7", and there are 6 dice combinations that equal "7" and 3 dice combinations that come to "10", then let me tell you something folks - you cannot win! For a $5 bet, you need to get $10 back in order to break even, and they only pay you $9. This is why it is simply impossible to play craps for any long-term period and make money. Over the short run though, anything can and does happen.

I will discuss this a bit later, but here is an interesting question to ponder: why would the casino "free odds" wagers in the first place? After all, players will make bets on which the house has an actual mathematical advantage, why should they even bother to offer you a wager on which they do not have such? It's funny, but if you read any casino gambling book, they will always recommend that you take all the odds that you are offered. They too, are part of the conspiracy to rip you off. They are a fraud to even recommend this. Not only is it mathematically wrong, but it fails to comprehend the true reason why the casino offers such "opportunities" to you, the player.

Anybody who wants to win a free month of gold-club can send me an email telling me why it is to the advantage of the house to offer wagers at free odds, which have no mathematical advantage to the house in the long run.

Slot Machines and Video Poker Machines
I think video poker machines are a lot of fun. But mathematically, these machines are programmed to pay out a certain percentage of the money that goes in. Psst … let me tell you a secret. Lean over and let me whisper this top secret into your ear -- in case you don't know, the percentage it pays out is less than 100% of what it takes in. Surprised? Now, here's a multiple-choice question to see if you understand the implications of this:

If you play slot machines or video poker machines for long enough, you will:
A) lose
B) go broke
C) lie to your friends about how you are ahead
D) all of the above.

And on top of that, you end up with dirty filthy hands from handling the coins that have been spat on, coughed on, whatever by some miserable excuse for a human being, not to mention all the cigarette ash residue that you get reaching into that hopper to get your coins. Yuck.. Yeah, I know they hand out the little wipies at the cashier, but they don't do much good - you probably have already caught tuberculosis before you use them!

I know it varies from place to place, machine to machine, time to time, etc., but in Atlantic City, on average, the machines I think pay out something like 90%. Again, the competition is the house, so YOU LOSE. In Las Vegas, however, you still lose, except you don't feel nearly as bad while you are losing. This is because the machines there, on balance, pay out something around 98%. In the end, all this means is that it takes them longer to squash your foolish ass, which they end up doing with the same degree of surety as their Atlantic City cousins. But there is a BIG DIFFERENCE between the 2 locations - one that you can actually feel and which is readily apparent once you start playing. At least you don't feel like a total schmuck out there cuz you actually don't feel like you are losing so bad. In fact, you will have a noticeable increase in the number of actual winning sessions while at a given machine, which can make you feel very good, especially if you take that money and go out and buy yourself something.

I like the "free-odds" bet that a lot of the video poker machines have these days - after you win a hand, it asks you if you want to "double". This means you can go double or nothing, the dealer gets a card which is displayed face up and you are given the choice of 4 face-down cards. If your card beats the dealer's, you double your money. If not, you lose it. If you win and would like to go on and play for double again, you may.

Personally, I think this would be a great thing to have at the racetrack - imagine going up to a tote machine, sticking in your winning exacta ticket, having the machine say "you have won $112.60 … would you like to double?"

Roulette
Now here's a real game of skill if I ever saw one! Ya know where the name "Roulette" comes from? It derives from the French word "roul" (pronounced roo) meaning "sucker"! You're better off just going to the bathroom and emptying your wallet into the toilet.

Pai-Gow Poker
Pai-Gow Poker is an interest game if you like to move slowly and get bored to tears while you rack up "comps" and losing your money. I actually played for nearly 3 hours during my last trip to Atlantic City and actually made only 6 distinctively separate $80-$100 bets! There's some skill involved here. But it basically comes down to you against the house with the house having an edge on tie hands, and further, every hand you win, you pay a 5% commission to the house. You can cut this edge in half by taking the opportunity to be the banker (means like being the house) versus the other players whenever possible, which cuts your commission down effectively to about 2.5%. Depending on how you play, you can get the house edge down in the 1.5%-2.0% range, depending on whether or not you count the "push" hands in the computation. In exchange for this, you get a very slow-moving game where you don't have to make a decision every 10 seconds, which is not total luck, and has a reasonable house edge. Another advantage to this game is that the majority of hands end up in a draw or push, which basically means that you can play for a long time and get comp credit for being at the table making bets. But let's get is straight - in the end, you lose, casino wins.

Black Jack
This is the only game in the casino where, at certain times, the players actually have an edge over the casino. My purpose here is not to do a book on blackjack, so I will be brief. Basically, the more high cards there are to be dealt, the more the deck favors the player. The more low cards remaining, the more it favors the house. Not exactly, but accurate enough and simple. For the vast majority of the time, the proportion of remaining cards is close enough to neutral such that the house maintains it's advantage. Let's not talk about single deck stuff … but in an 8-deck shoe, if the player plays a basic hit/stick strategy with no mistakes, they can bring the house edge down below 2% or so. Not too terrible, but still a sure loser in the long run. By counting cards, you can get an advantage. What the card counter is trying to do is identify when the deck is neutral (which it is most of the time and this favors the house), when it favors the house even more, or when it might actually favor the player. Further, the card-counter's objective is to have the smallest amount of money wagered when the odds favor the house, and larger amounts wagered when the deck favors the player. If they can successfully do this and get a high enough percentage of their money on the table at those times, they can wind up ahead in the long run versus the casino. Either way, counting or not counting, the game goes through stages where the advantage changes. The card counter is aware of this, non-counters are not.

Needless to say, the casino is on alert and knows what to look for to identify such people. Casinos watch for situations where the player increases their bets, particularly later in a shoe. Furthermore, since it is a private game, they have the right to ask anyone to leave for any reason they like. So, successful card counting requires that you know how to do it (the easy part) and know how to disguise it and put up with all kinds of other casino distractions while you execute your strategy. Not so easy. But not that hard.

The racetrack varies fundamentally from the casino in that you are not playing against the house. You are merely paying the house a "rental fee" for their facility, and your competition is the other bettors. The track takes it's portion right off the top - an average of like 18% on win bets (varies from state to state) and the other 82% goes back to the players. Except in the case of a "minus pool" the track is, financially, indifferent about who wins.

This means basically that overall, the win bettors lose 18%. Exacta and trifecta bettors lose even more. 18% is one tough nut to crack folks - let me tell you. It's much easier and takes much less practice to go to a casino and lose a lot less, plus you get free drinks. Additionally, the casinos will "comp" you for your play, meaning that depending on how long you play for and how much you bet, you can get free meals, free shows, free rooms, etc. The track doesn't do this. Well, they do have that club at the Meadowlands, but I'm not in the mood to bet $20,000 in order to get a tip sheet, a free program and dinner for two at one of those miserable, disgusting restaurants that they have there. Besides, what good is a food comp at the track if you have to go spend the money on the Rolaids? You would think that they should at least give you a small roll! So, believe it or not, most people are better off going on a bus trip to Atlantic City than they are at the Meadowlands - at least percentage wise.

So, why does Steve like racing? Well, for me, I consider it to be a superior vehicle for speculation for a number of reasons. First of all, my competition is not the smart executives at the casino. Instead, I'm competing against dopes like you (not you personally, but the crowd collectively). Furthermore, at the casino, I have to play according to their rules. At the track, I play according to my rules. If I don't like the rules, I don't play. I can wait around for the rules to change. Imagine waiting for the rules to change at the tables! Guess what - they don't change.

Think for a minute about the card counter at blackjack. All of his efforts are toward: 1) identifying the times when the game is in his favor, 2) varying his wager so that he has the most money wagered at that time and, 3) disguising himself so that he can continue to play this way. He cannot bet zero - if he sits at a table, he must make at least a minimum wager. And he cannot (or is not generally advised to) vary his wager too greatly from hand to hand.

To me, the racetrack has all of the benefits that a card counter is looking for, without the pitfalls. I can identify the races and times when I feel that the game is in my favor. I can vary my bet to any extent that I wish, from zero to my whole bankroll. Further, I can do this without the need to vary my behavior or otherwise hide the fact that I am doing this. If I don't like the "rules of the game now" (i.e. the odds I am being offered), I simply sit out now, and enter the game at a later point when the rules are suitable for me. So in short - all of the advantages that the card counter is looking to obtain in order to get a slight edge versus the casino - they are all available to me for the taking at the track. And I don't have to play against Steve Wynn - I play against morons like Al and Bill and Z! (just a joke guys).

Of course, there is one minor fly in the ointment here. First is that the overhead amount is much higher than the casino. The other is that it really does not take much time, training or effort, nor does it take any degree of intelligence, preparation or commitment to obtain very moderate levels of house advantage at the casino. Shit, you don't even need a goddamned brain to push the button on the slot machine and you only lose 10% (in AC) of your money. In fact, I can take a person of mere average intelligence, and teach them the basic hit/stick/double/split strategy in blackjack in about 2 hours. No counting - no special training - no behavior modification, nothing. With this level of training, they can go play blackjack and figure to loose between say 2% and 3%. You don't have to study the results from yesterday's blackjack. No need to look at replays. No homework of any kind. Really, it's quite simple to lose at the casino.

But the big tradeoff at the track, versus the casino, is the level of time, talent, energy, opportunity and money that you have to invest in order to learn this game well - well enough to get enough of an edge over the competition to counteract the enormous 18%-25% cut that the track is going to get. If you are willing to make that investment, consistently over a long period of time, are properly capitalized and have proper patience and discipline (and there are not many who do) - to these precious few, the track offers you the very finest speculating vehicle you could ever dream of. If not -- do yourself a favor - next time you get the urge to go to the Meadowlands - get on a greyhound with a bunch of old people instead, take the $25 in coin they give you and spend your 8 hours a week down at Bally's!

Oh, and by the way … now that the casino's will take all my simulcast wagers AND give me comp credits for my wagers, I am in Pigs Heaven. Now I'm gonna make sure that all my vacations are near casinos! In fact, I just booked my ski vacation this winter for Caesars in South Lake Tahoe - lifts close at 4, Meadowlands starts at 4:30 Pacific time - the whole card will be over by dinner!