An Introduction To Blackjack Money Management Systems | Training
Money management (or 'bankroll management' - the two terms are often used interchangeably) is one of those phrases that's bandied around as a miracle cure that can turn bad players into great ones. It can't do that, although a lack of money management is often the difference between a consistent loser and a player who can break-even or win over the long term. Without good money management, you're unlikely to do anything other than throw your money away.
What is 'money management'?
Put simply, it's the art of making sure you've always got enough money to come back the next day. To be more precise, it's about making sure that you keep hold of your winnings during the good times, and that you don't magnify your losses during the bad times. Because, make no mistake, as a blackjack player, you will have both good times and bad times. The reason for this is that little thing called the 'house edge'.
Many casino games have a built-in edge for the casino. It costs big money to keep all those lights on, and all those tables stocked with expensively-attired dealers. Even if you're playing the optimal game and making no mistakes at all, the casino wants to be getting something in return for providing you with all of that entertainment. Their playing fee is the 'house edge', a set of rules that determine that, over the long term, you *will* be losing money over the course of your bets.
Compared to many casino games, blackjack has a fair degree of skill attached to it. If you're playing optimally, the edge is down at around 0.5% when playing an eight-deck game. In contrast, roulette's edge is around 2.7-5.4%, while the slots regularly have edges of 15% or more. All the same, unless you're counting cards, or using another trick to twist the odds, you will lose to the casino over time when you're playing blackjack. And even optimal play can make only so much difference to your success. All things being equal, whether you're having a good night or a bad night is likely to be down to whether you're having good luck or bad luck. And that's not really something you can (honestly) influence.
So are factors like 'luck' and the house edge to blame for most players losing?
The house edge determines that most blackjack players will lose gradually over the long term. However, if we bet erratically and take bigger risks, we'll probably lose your money far more quickly than that. That's because optimal play assumes that we're automatons, mechanically playing the same way again and again, regardless of how well or badly we're doing overall. In practice, a bad run of cards is likely to alter our emotions. We may become scared or angry, or simply plain frustrated. As long as we carry on thinking properly, and playing the same amounts, we'll probably be fine. The chances are, though, we'll change something in order to compensate for our poor form:
Style of play
- Perhaps we'll hit more often, or make more use of doubling up? Assuming we know how to play optimally (and if you don't, you owe it to your bank balance to perfect your basic strategy before putting real money at risk), any deviation from our normal rules is likely to increase the house edge rather than keep a lid on it. As such, we're making it even more likely that we'll lose more often.
- This, though, is the big one. Changing play style can only affect the odds so much. Increasing the stakes in order to chase a loss, though, can have utterly catastrophic results, incinerating our entire bank with just a few misplaced large bets.
When faced with a poor run, many of us will go 'off tilt', raising our stakes significantly in order to make back the money that we've lost. The more we raise the stakes, the more quickly we can get out of the red. And often that seems to work. The problem is, when it doesn't work, when the wrong cards keep coming up, even as we stake larger and larger amounts, the result is a blackjack bloodbath. In a perverse way, many gamblers enjoy talking about the times they've blown most or all of their bank in one horrendous session. At the same time, though, most gamblers (even successful ones) are broke. Proper money management is designed to make sure that you don't bet wildly - and that, even when you do, it doesn't result in the death of your entire bank.
Are we talking betting systems, like Martingales or Labouchere?
No. These betting systems are designed to have you increasing your bets in reaction to a poor run. But none of these systems can outrun the house edge. They often produce good results over the short to medium term, but over the long term they're likely to result in massive losses. A player coolly following the staking rules of the Martingale system is a very different beast to an uncontrolled nervous wreck betting their entire bank on the next card. In the long term, though, betting system practitioners will end up drowning their sorrows almost as surely as the off-tilt lunatics.
So what are we talking about?
Well, the first key to success is to acknowledge that, on any particular day, our success or failure is largely down to luck. Most gamblers are far too keen to slap themselves on the back when they do well, and prone to excessive self-flagellation when they do badly. In practice, our success on any one day has far more to do with the run of cards. Part of mastering money management, then, isn't about money at all. It's about taking ourselves out of the equation and keeping ourselves on a more even keel. How we do that is where the art really lies.
In the coming episodes, we'll look at ways of taking out the emotion. We'll learn how to partition our money, and how to ensure that we're always working with amounts that we're comfortable about losing. Betting an amount that we can't afford to lose is the cardinal sin of gambling. But given that one person's fortune is another person's pocket money, how do we determine the correct amount?
We'll look at staking systems (including the legendary Kelly) and see if they make it easier for us to play the cards as they fall. Just how calamitous could it be when we stray from optimal theory?
We'll look at some of the received wisdom passed around in gambling circles, and see how these theories hold up.
We'll also tackle tricky questions on staking - is there a time when it actually makes sense to increase your bets? Will money management change when we get to tournament play?
And we'll look at the in-built tools that many casinos provide us with in order to keep a lid on our losses. How can we use them to ensure that we stick to our plans even when our emotions are running high?
If you gamble because you want a big kick from risking large amounts of cash, money management isn't going to do anything for you. But if you simply enjoy the thrill of the game itself, and want your money to last for as long as possible (while still enjoying the good nights when they come along), you owe it to yourself to learn about this. If you don't have a winning strategy, money management will do nothing to help you. But even with the best tactics in the world, you'll probably soon go off the rails if you don't look after your money.