Gambling - Risk vs. Reward

Risk. We face it everyday. Risk from uninsured motorists. Risk from eating too much red meat. Risk from unprotected sex.  Risk when we jaywalk in Vegas. Everyone, at some gut level, makes choices about risk every day – and in many cases these can be life or death decisions. For the most part we measure the amount of risk we take against the potential reward – then make a decision as to whether or not that risk is acceptable. But this isn’t always the case. Let’s consider three different players at a craps table. You may even recognize yourself as one of them. Then again – you may see a bit of yourself in all three.

Our first player has $1000 session bankroll and a $500 loss limit. He steps up to the table, buys in and places a bet for $60 each on the six and eight. He knows he has placed an inappropriately large portion of his session money at risk – almost 25% of it in fact. But he has weighed the potential of loss, analyzed the probability that a six or eight may roll, and is cautiously optimistic that he will win. If not – he is optimistic that he still has sufficient bankroll remaining to allow him to get back in the game then get out with a win.

The second player is a bit more pessimistic. He has a $500 session bankroll – and his loss limit is his whole buy-in – $500. He’s in the casino because he doesn’t have enough cash to pay all of his bills. In fact, his car payment is due for $650 right now. He needs to win $150 just to have enough to make his payment – and even then he’ll be broke until next payday. He knows he might lose the entire $500 – but what the heck? He can’t pay his bills anyway. This player cannot AFFORD to lose – and that will ultimately beat him.

The third player has a $2500 session bankroll. He is a classic high roller – in the casino for a good time. The $2500 he’s playing with is strictly “entertainment” money to him. If he wins – great. If he loses – there’s plenty more where that came from. As long as the craps dealer is a cutie and the beverage server keeps showing a little cleavage when she brings his Crown and water he’s a happy camper.

There you have it. Three very different players. All three realize they could lose 100% of their session money. But what will actually happen at the table?

The first player – the optimist – will likely get the most consistent positive results. He’s set loss limits and has a specific game plan for when he gets to the table. He will continually weigh risk versus reward and adjust his betting style as needed. He is thinking like a winner.

The second player – the pessimist – is the most likely to lose. Out of desperation he will make increasingly bolder/high risk plays. He will inevitably chase his losses until he tosses the last chip in. He is a self-fulfilling prophecy.

The third player – the indifferent high roller – may come close to playing to a “draw” with the casino. No, it’s not about the money. It’s about the good time. No doubt you’ve seen these players before – playing for an hour or so – losing a thousand bucks – then throwing out a $100 hard eight and winning it all back on one toss. That black chip they tossed out means nothing to them – and luck just seems to seek them out.

Where do you fit into this mix? Hopefully, you’re player number one. If not – you should be.  Approach the game with a plan.  Set loss limits and win objectives.  Play your plan and be open to adapting to what the table gives you.  If the table takes instead of giving don’t continue to chase your losses.  Color up and call it a session.  There’s always another dice game – if you have the bankroll left to buy-in.