Do you ever wonder how much you should wager and how big your bankrolls should be in relation to the size of the wagers you make? If so, we've got the answers!
The Kelly Criterion
Professional gamblers often use the Kelly Criterion, a system that determines what the optimum wager is. In order to ascertain the result, a player will select to enter either a bankroll value or wager size and insert it into the Kelly formula which then produces the ideal size of the other variable. This gives the player a bet-to-bankroll ratio which affords him/her the highest probability of winning and the lowest of losing everything.
But like most systems, the Kelly Criterion is not without flaws and it will advise players to bet nothing when the casino hold the advantage. As we all know, there are few times when the casino doesn't have the upper hand, and especially if you're a slots player. There are other calculations that estimate risk of ruin - the probability of your bankroll becoming depleted, but these are not particularly useful for the average gambler.
Tips from the Pros
Instead of worrying about too many complex mathematical calculations it is easier to work on tips from the pros. For penny and nickel slots players playing a two to three hour session at a time, you're looking at 500 to 600 decisions and actions per hour, so work on 250 times the size of your average bet to determine your bankroll requirements. This doesn't mean that you should play your entire bankroll or buy-in to any slots tournaments for that amount, it's just a figure that will keep you playing comfortably for three hours or more.
If you're playing quarters, you're still looking at 500 to 600 decisions and actions per hour but you'll need around 200 times your average bet and for games where the minimum is a dollar or more, the number of actions remains the same but you can work on 150 bets in order to play for 3 hours.
You'll notice from the above that the number of wagers required per session as the denomination you play increases. Why? This is because generally lower denomination slot machines offer higher overall payouts than those with higher denominations.
This however is not true for video poker games offered at casinos - as the denominations rise, the pay tables occasionally improve but in general all video poker game variants require at least 150 wagers to accommodate 3 hours of game play with around 400 decisions and actions per hour.
And if you're a table games fan and like to play games like Baccarat and Blackjack, then you should budget for a minimum of 50 wagers for 50 to 100 decisions per hour in your three hour gaming session.
You may be wondering why table game bankrolls are quite a lot smaller (in units) than other games, this is because their actual bets in monetary terms are usually quite a lot higher. But on a per bet basis, table games require lower bankrolls because they usually have lower volatility than slots and video poker games, which means there are fewer swings to deal with.
In addition, the majority of wagers pay 1:1 and 3:2, with Roulette's highest payout awarding 35:1. Slots on the other hand payout at 1000: 1 up to 10,000:1 or more because games with higher payouts have to draw the jackpot money from somewhere and there are therefore less small value wins and longer losing streaks to contend with so you'll need a larger bankroll to do so.
Calculating your Bankroll
When determining the size of your bankroll for a gambling session bear in mind that the average wager is not just the lowest value one. For example if you're betting the maximum on a 25 cent video poker game and playing single hands at a time then each wager will amount to $1.25.
When going on the general rule of thumb for video poker mentioned above, you should multiply $1.25 by 150 to get a session budget of $187. If however you are going to play a multi-hand variant of ten hands per game, then your wagering total will increase to $12.50 per hand and your total bankroll requirement to $1,875. Similar calculations will need to be applied if you make multiple number wagers in craps or roulette games and when playing multiple hands in blackjack.
Not a numbers person? Don't worry. Simply take your standard wager, add two zeros to it, so $1 becomes $100 and double it - 200 wagers. This should be sufficient enough to get you through a slots session or blackjack session of 50 bets. Simple isn't it?