Am I Making a Good Bet? Part Three

Keep asking this question. It is the essential question that a poker player or for that matter any gambler must continually keep asking. Every good bet has positive expected value (also known as EV or expectation.) In general, you should only make good bets or at least bets you think are good.

There are two major exceptions. It is okay to make bad bets for entertainment. Sports betting is a typical example. The second exception is betting for long-term gains in equity, even those that have negative EV on this particular bet. It might be necessary to make a few bad bets to keep getting invited to a juicy private game. In all cases, whenever you are considering a bet, always strive to make the best bet possible. Best usually means the most gain for the least risk.

When you are considering a bet, especially one with questionable or negative equity, it is important to know or approximate the EV. I recently went to the movies with poker legend and successful businessman, Dan Harrington, and another friend of ours Joey C. There are few people with a greater understanding of expectation than Dan, and he has always had discipline to avoid doing anything stupid.

After the movie, I mentioned that we were in a casino, which had at one time offered 100 times odds at craps. Joey likes craps, while both Dan and I tend to avoid gambling with the worst of it. They no longer offered 100 times odds, but only 20 times, which is still much more than strip casinos generally do. (I won’t bother to explain craps, but the least bad bets like pass or come have a negative equity of about 1.5 percent of the amount bet. The odds, however, are neutral-zero equity, and are one of the few casino bets you can make without paying juice.)

After a little discussion, Joey talked us into taking a quick shot at the crap table. We put in $200 each for a total of $600. This allowed us to make bets of $5 (negative equity 1.5 percent) and then take 20 times that amount in odds or $100, (0 equity.) We played for about 15 minutes, managed to win about $650, and quit. At dinner, we discussed the craps session.

Joey felt that since we had been winning, we should have started pressing up our bets, and tried for a big score. I think Dan was still a little shocked that we had talked him into investing, and was relieved to escape without a loss. I said that I try not to let the actual outcome cloud my thinking. I have programmed myself to think only in terms of equity. Since we bet $5 about 20 times, with a negative equity of 1.5 percent, we had lost $1.50. Since the odds were bet with no equity, positive or negative, I count them as zero.

Our actual result, winning $650, is an irrelevant random outcome. Our theoretical result, losing $1.50, is how we should look on the session. Thus we each individually had lost 50 cents. If we had cocktails, then we would have had a little plus equity, at least before tipping the waitress and dealers.

You may be thinking that this story is trivial and reading it was a waste of time. I related it only to emphasize the importance of thinking in terms of expected value and not actual result. Once you start thinking this way, you will avoid steaming (going on tilt) in a lot of situations that might otherwise push all the wrong psychological buttons.

I recently got all-in for about $1,000 in a Bellagio $5-$10 game. I had 9 9 and my opponent had J 7 on a flop of 9 8 5. My hand will win about 73 percent of the time in the long run, but it lost when my opponent made a spade flush. Instead of letting this terrible random outcome upset me, I thought about my theoretical EV. The pot was approximately $2,100, so .73 times $2,100 is equal to $1,533. Since I’ve invested about $1,000, I made $500. By thinking that I earned $500, and not that someone drew out and cost me $1,000, I can approach the next hand in a calm, disciplined frame of mind.

In summary, by thinking in terms of EV you will focus more on making right decisions and less on the actual results. You’ll play better. ♠

Steve ‘Zee’ Zolotow aka Zebra is a very successful gamesplayer. He has been a full-time gambler for over 40 years. With two WSOP bracelets, over 50 cashes, and a few million in tournament cashes, he is easing into retirement. He currently devotes most of his Vegas gaming time to poker, and can be found in cash games at Bellagio and at tournaments during the WSOP. When escaping from poker, he spends the spring and the fall in New York City where he hangs out at his bars: Doc Holliday’s, The Library and DBA.