Question for the Wiz and Readers: Would you finance advantage gambling?
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| | 8 votes (25%) | ||
| | 20 votes (62.5%) |
32 members have voted
April 15th, 2015 at 4:38:40 PM
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Wiz, you are an investment banker. You have $100 million in capital to invest.
Would you finance an advantage player if you felt certain that he/she was trustworthy, disciplined, and understood BS, and all forms of counting strategy precisely. What other business would you feel was comparable as far as risk? Real estate, automotive, tech industry?
If you would choose not to invest in the advantage player, could you elaborate as to your rationale?
Would you finance an advantage player if you felt certain that he/she was trustworthy, disciplined, and understood BS, and all forms of counting strategy precisely. What other business would you feel was comparable as far as risk? Real estate, automotive, tech industry?
If you would choose not to invest in the advantage player, could you elaborate as to your rationale?
April 15th, 2015 at 6:18:25 PM
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No, because there is no growth.
eventually you will get 86'ed.
eventually you will get 86'ed.
April 15th, 2015 at 6:26:58 PM
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A strong "no" from me. Card counting blackjack is pretty much dead. Even if I could trust the player completely and he proved his skill, some very big ifs, I'm sure said player would expect his expenses to come out of the bankroll and I'm sure he would want a cut for himself. Mathematically, I don't think it would work, post-expenses.
I've mentioned this before but I invested in a card counting team that underwent skills testing and lie detector tests for honesty and still this team managed to lose money. I'm sure they showed a profit on the game itself but a lot of travel and playing expenses had to come out of the bankroll.
I've mentioned this before but I invested in a card counting team that underwent skills testing and lie detector tests for honesty and still this team managed to lose money. I'm sure they showed a profit on the game itself but a lot of travel and playing expenses had to come out of the bankroll.
"For with much wisdom comes much sorrow." -- Ecclesiastes 1:18 (NIV)
April 15th, 2015 at 6:43:46 PM
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My expected return on $100million would be about $5 to 10million a year, 5-10%. So from a required return perspective:
$5,000,000 divided by 50 weeks a year = $100k weekly EV. Or at 5 days a week, $20k daily.
So on good days, this blackjack person/team would be walking out of the casino some days with 6 figure gains. It's just not possible that at this scale, you could get an acceptable investment return on $100million from blackjack. And if I had $100million, I would probably see managing that wealth as a full time job, and don't think the risk/reward of investing in a blackjack team would make sense at any dollar amount. Paraphrasing Warren Buffett, you're working with an elephant gun at this point, bagging rabbits just doesn't move the needle.
Personally, as a manager of less than $100million, I'd never invest in a team, especially where I'm not playing. The risk of theft is just too big. I'd consider a side-by-side act with a loved one/friend or a call-in type team where every person stakes themselves and share profit. But even then there would be a breakpoint where this wouldn't be a good use of time, maybe above a $2million bankroll/portfolio.
$5,000,000 divided by 50 weeks a year = $100k weekly EV. Or at 5 days a week, $20k daily.
So on good days, this blackjack person/team would be walking out of the casino some days with 6 figure gains. It's just not possible that at this scale, you could get an acceptable investment return on $100million from blackjack. And if I had $100million, I would probably see managing that wealth as a full time job, and don't think the risk/reward of investing in a blackjack team would make sense at any dollar amount. Paraphrasing Warren Buffett, you're working with an elephant gun at this point, bagging rabbits just doesn't move the needle.
Personally, as a manager of less than $100million, I'd never invest in a team, especially where I'm not playing. The risk of theft is just too big. I'd consider a side-by-side act with a loved one/friend or a call-in type team where every person stakes themselves and share profit. But even then there would be a breakpoint where this wouldn't be a good use of time, maybe above a $2million bankroll/portfolio.
"Rule No.1: Never lose money. Rule No.2: Never forget rule No.1." -Warren Buffett on risk/return
April 15th, 2015 at 7:39:32 PM
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No, but not hell no.
I'd need to understand the play, ascertain the crew's abilities and integrity, and then contemplate the time frame.
There's absolutely no way I'd bankroll a play at $100M. $200k is really about the total limit, and I'd need to see that they were going in at least equal - so $100k of mine going in.
On the other hand, if you mean "would I operate a casino", sure. The house is an AP that isn't particularly reliant on subjective player skill to make money. I'll take that shot.
I'd need to understand the play, ascertain the crew's abilities and integrity, and then contemplate the time frame.
There's absolutely no way I'd bankroll a play at $100M. $200k is really about the total limit, and I'd need to see that they were going in at least equal - so $100k of mine going in.
On the other hand, if you mean "would I operate a casino", sure. The house is an AP that isn't particularly reliant on subjective player skill to make money. I'll take that shot.
May the cards fall in your favor.
April 15th, 2015 at 9:29:21 PM
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Not my style. While Advantage Play is very much a secondary source of (small) income for me, I wouldn't be inclined to invest in a team even if I could make Advantage Play a primary source of revenue.
With very few exceptions, I don't work with people, I either work for people or work alone. I've just never really been great at collaborative efforts, with Administrating Forums (including others) being a notable exception. Forums aren't even really an exception, because there were two (including this one) where I would directly answer to someone, such as Wizard, and one Forum where I was in charge. Generally speaking, I'm usually more comfortable either taking orders or having my orders go unquestioned, (because I'm the only person being ordered) it's just really hard to work with others on an equal footing because an equal footing is never really that and only appears to be so on the surface.
With very few exceptions, I don't work with people, I either work for people or work alone. I've just never really been great at collaborative efforts, with Administrating Forums (including others) being a notable exception. Forums aren't even really an exception, because there were two (including this one) where I would directly answer to someone, such as Wizard, and one Forum where I was in charge. Generally speaking, I'm usually more comfortable either taking orders or having my orders go unquestioned, (because I'm the only person being ordered) it's just really hard to work with others on an equal footing because an equal footing is never really that and only appears to be so on the surface.
https://wizardofvegas.com/forum/off-topic/gripes/11182-pet-peeves/120/#post815219
April 16th, 2015 at 12:17:20 AM
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Pure Card counting in the US probably no.Quote: RipCovingtonWiz, you are an investment banker. You have $100 million in capital to invest.
Would you finance an advantage player if you felt certain that he/she was trustworthy, disciplined, and understood BS, and all forms of counting strategy precisely. What other business would you feel was comparable as far as risk? Real estate, automotive, tech industry?
If you would choose not to invest in the advantage player, could you elaborate as to your rationale?
Other methods absolutely.
Agian If just counting in the US is the main focus, then it's definitely a pass.
If Some incredible games were found outside the USA, I might think seriously about it. That's probably a good investment assuming you trusted everybody involved.
♪♪Now you swear and kick and beg us That you're not a gamblin' man Then you find you're back in Vegas With a handle in your hand♪♪ Your black cards can make you money So you hide them when you're able In the land of casinos and money You must put them on the table♪♪ You go back Jack do it again roulette wheels turinin' 'round and 'round♪♪ You go back Jack do it again♪♪
April 16th, 2015 at 1:52:31 AM
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Quote: WizardI've mentioned this before but I invested in a card counting team
Interesting. I missed those other occasions where you mentioned this.
the next time Dame Fortune toys with your heart, your soul and your wallet, raise your glass and praise her thus: “Thanks for nothing, you cold-hearted, evil, damnable, nefarious, low-life, malicious monster from Hell!” She is, after all, stone deaf. ... Arnold Snyder
April 16th, 2015 at 5:12:58 AM
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Quote: WizardA strong "no" from me. Card counting blackjack is pretty much dead. Even if I could trust the player completely and he proved his skill, some very big ifs, I'm sure said player would expect his expenses to come out of the bankroll and I'm sure he would want a cut for himself. Mathematically, I don't think it would work, post-expenses.
I've mentioned this before but I invested in a card counting team that underwent skills testing and lie detector tests for honesty and still this team managed to lose money. I'm sure they showed a profit on the game itself but a lot of travel and playing expenses had to come out of the bankroll.
Mike I've never heard you mention your investing experience before. I either missed it, or it was before I joined the board. I'm actually considering putting together a team out here in MD. At a much smaller scale. Any advice. Could you share more details. Our plan would be to play locally, so as to avoid many of the travel expenses you speak of. Overhead is the death of many a new business venture. I would imaging a CC team would be no exception.
April 16th, 2015 at 6:44:47 AM
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Quote: vendman1Mike I've never heard you mention your investing experience before. I either missed it, or it was before I joined the board. I'm actually considering putting together a team out here in MD. At a much smaller scale. Any advice. Could you share more details. Our plan would be to play locally, so as to avoid many of the travel expenses you speak of. Overhead is the death of many a new business venture. I would imaging a CC team would be no exception.
I don't want to hijack the thread. If you were to make a new forum thread about this I'd be happy to contribute.
"For with much wisdom comes much sorrow." -- Ecclesiastes 1:18 (NIV)
April 16th, 2015 at 8:45:38 AM
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It really depends on what the player will be doing. If the plan is solely card counting blackjack in the continental US, then I would pass. I think expenses and also the distribution of results WRT compensation to the player(s) will eat into your EV significantly. Most other things I would (and have) invested in.
April 16th, 2015 at 11:02:31 AM
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Growing a business, from the inside out, on that scale requires a unique brand with a competitive edge. No one will give any action to such a "successful" business. Like putting the cart before the horse.
But, this does highlight the basic long-term problem with being a player bettor: No room for personal growth, unless you want the mob to bankroll you.
But, this does highlight the basic long-term problem with being a player bettor: No room for personal growth, unless you want the mob to bankroll you.
Nonsense is a very hard thing to keep up. Just ask the Wizard and company.
April 17th, 2015 at 9:46:04 PM
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If you had $100M and wanting to invest in an AP team, why not just open a casino. Your staff members are your team and you can have them APing 24/7 with little risk of theft.
April 17th, 2015 at 11:10:18 PM
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They just don't give out gaming licensing like candy.Quote: NumpkinIf you had $100M and wanting to invest in an AP team, why not just open a casino. Your staff members are your team and you can have them APing 24/7 with little risk of theft.
That would be an interesting question and thread.....
What would it take to start a small locals casino in las vegas with a bar, restaurant and a few hundred slots. Including licensing, approval, credit, cash, insurance, advertising, zoning, and whatever it takes to open something. Best location?
What's the cost and requirements to open something smaller like a dottys/ jackpot joanies. That's obviously a successful business model. They only have 1 or 2 employees on site at a time. I see a new location opening monthly it seems.
♪♪Now you swear and kick and beg us That you're not a gamblin' man Then you find you're back in Vegas With a handle in your hand♪♪ Your black cards can make you money So you hide them when you're able In the land of casinos and money You must put them on the table♪♪ You go back Jack do it again roulette wheels turinin' 'round and 'round♪♪ You go back Jack do it again♪♪
April 18th, 2015 at 9:41:13 AM
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Quote: AxelWolfWhat would it take to start a small locals casino in las vegas with a bar, restaurant and a few hundred slots. Including licensing, approval, credit, cash, insurance, advertising, zoning, and whatever it takes to open something. Best location?
What's the cost and requirements to open something smaller like a dottys/ jackpot joanies. That's obviously a successful business model. They only have 1 or 2 employees on site at a time. I see a new location opening monthly it seems.
You can open a small bar or location like a Jackpot Joanies for less than $100k if you go with a slot route operator.
Small casinos are a lot more expensive than you could imagine. A single Buffalo machine will cost you close to $27k. Don't forget to add about $3k per machine just for the player tracking system.
At my age, a "Life In Prison" sentence is not much of a deterrent.
April 18th, 2015 at 1:04:32 PM
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Does Dottys and Joanies use route operators? I know different bars have different deals whats the best and worst deal you have heard of? I assume the location takes the responsibility of promotions(do they share promotion costs?) drink comps advertising etc. Does the slot route operator supply the gaming licensing?Quote: DRichYou can open a small bar or location like a Jackpot Joanies for less than $100k if you go with a slot route operator.
Small casinos are a lot more expensive than you could imagine. A single Buffalo machine will cost you close to $27k. Don't forget to add about $3k per machine just for the player tracking system.
How much control does the slot route operator have on everything?
♪♪Now you swear and kick and beg us That you're not a gamblin' man Then you find you're back in Vegas With a handle in your hand♪♪ Your black cards can make you money So you hide them when you're able In the land of casinos and money You must put them on the table♪♪ You go back Jack do it again roulette wheels turinin' 'round and 'round♪♪ You go back Jack do it again♪♪
April 18th, 2015 at 1:27:08 PM
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Quote: AxelWolfDoes Dottys and Joanies use route operators?
If it was easy and profitable to do,
everybody would be doing it, and
they're not. You know what's easy?
Opening a restaurant, everybody
who can fry an egg thinks they can
own a restaurant. The failure rate
is over 90% for restaurants. In
business, nothing is easy.
"It's not called gambling if the math is on your side."
April 18th, 2015 at 1:37:42 PM
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IMO....
There is a point of diminishing returns. For example, with a $5K bankroll playing solely $0.25 denom FPDW, you'd be getting a "good" return on your $5K investment. Playing the same game on a $50,000 bankroll, your return isn't as good [since you can't or usually can't find FPDW above $0.25 denom].
It's the same thing with card counting blackjack. With a $200M bankroll, you can't just have a spotter/BP approach where a BP sits down at a TC of +2 and start betting some absurd amount of money ($200,000 or $500,000). I don't think you can do that anywhere. Maybe Caesar's in LV will let you bet $50K a hand on the main floor (idk about high limit, but even there, poor chance of being able to wong into a shoe). And if you go to a play-all approach (where you're spreading your bets), you can't get away with that for any good amount of time.
I would invest in a team (I have in the past, but I was part of the team)...but I would not invest such an absurd amount of money relative to the expected return.
There is a point of diminishing returns. For example, with a $5K bankroll playing solely $0.25 denom FPDW, you'd be getting a "good" return on your $5K investment. Playing the same game on a $50,000 bankroll, your return isn't as good [since you can't or usually can't find FPDW above $0.25 denom].
It's the same thing with card counting blackjack. With a $200M bankroll, you can't just have a spotter/BP approach where a BP sits down at a TC of +2 and start betting some absurd amount of money ($200,000 or $500,000). I don't think you can do that anywhere. Maybe Caesar's in LV will let you bet $50K a hand on the main floor (idk about high limit, but even there, poor chance of being able to wong into a shoe). And if you go to a play-all approach (where you're spreading your bets), you can't get away with that for any good amount of time.
I would invest in a team (I have in the past, but I was part of the team)...but I would not invest such an absurd amount of money relative to the expected return.
April 18th, 2015 at 2:09:09 PM
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You have to have the money and understanding of the gaming business. Dottys and Joanies are popping up all over like 7-11s. Obviously ussully 1 employee per shift plays bartender, cocktail waitress, cashier's. They take over all the failed bars. Lease them, Gut them,add cheap carpet and simple decorations.Quote: EvenBobIf it was easy and profitable to do,
everybody would be doing it, and
they're not. You know what's easy?
Opening a restaurant, everybody
who can fry an egg thinks they can
own a restaurant. The failure rate
is over 90% for restaurants. In
business, nothing is easy.
Obviously no business is easy but for now this has some legs.
♪♪Now you swear and kick and beg us That you're not a gamblin' man Then you find you're back in Vegas With a handle in your hand♪♪ Your black cards can make you money So you hide them when you're able In the land of casinos and money You must put them on the table♪♪ You go back Jack do it again roulette wheels turinin' 'round and 'round♪♪ You go back Jack do it again♪♪
April 18th, 2015 at 4:14:27 PM
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To be an investor (as opposed to a participant) in a business, the requirement is that it must be the best and most lucratuve opportunity you have to invest money (unless you are doing it for personal reasons.) Because businessman will invest their money in what they evaluate to be their best opportunity.
Even if investing in an advantage team appeared to be a viable moneymaking opportunity, I can't imagine it would be the best moneymaking opportunity available to a wealthy investor. The Wiz hit the major issues -narrow profit margins that are also uncertain, high risk of theft, historical track record that is discouraging.
If you are going to undertake something shady and covert -like an advantage gambling team - there needs to be a bona fide opportunity to make enormous profits quickly. Like, say, double your money in 4 months and then you're out. And card counting and other tenuous mathematical-edge ventures simply don't offer that.
Even if investing in an advantage team appeared to be a viable moneymaking opportunity, I can't imagine it would be the best moneymaking opportunity available to a wealthy investor. The Wiz hit the major issues -narrow profit margins that are also uncertain, high risk of theft, historical track record that is discouraging.
If you are going to undertake something shady and covert -like an advantage gambling team - there needs to be a bona fide opportunity to make enormous profits quickly. Like, say, double your money in 4 months and then you're out. And card counting and other tenuous mathematical-edge ventures simply don't offer that.
So many better men, a few of them friends, are dead. And a thousand thousand slimy things live on, and so do I.
April 18th, 2015 at 7:43:32 PM
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In my 14 years of living in Vegas and having known many advantage players, and without naming names, let me say that more than 50% are of questionable honesty, to say the at least. Some are downright thieves. A dishonest AP can make a lot more money than an honest one. My advice to any up and coming advantage player is to be very choosy about who you trust. When in doubt -- don't.
"For with much wisdom comes much sorrow." -- Ecclesiastes 1:18 (NIV)
April 18th, 2015 at 8:31:40 PM
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Quote: EvenBobYou know what's easy? Opening a restaurant, everybody who can fry an egg thinks they can own a restaurant.
The failure rate is over 90% for restaurants. In business, nothing is easy.
(Line breaks edited)
There is a difference between opening a restaurant and operating one profitably on an ongoing basis.
May the cards fall in your favor.
April 18th, 2015 at 8:53:29 PM
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Quote: WizardIn my 14 years of living in Vegas and having known many advantage players, and without naming names, let me say that more than 50% are of questionable honesty, to say the at least. Some are downright thieves. A dishonest AP can make a lot more money than an honest one. My advice to any up and coming advantage player is to be very choosy about who you trust. When in doubt -- don't.
I found the "church team" interesting. One of the reasons why I think they found their success was because they started with people they knew, who had no interest in gambling, and trained them. Same with MIT blackjack. I think it would be really hard to build a team from people who you didn't know already.
"Rule No.1: Never lose money. Rule No.2: Never forget rule No.1." -Warren Buffett on risk/return
April 19th, 2015 at 12:52:47 PM
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100% of all plays I put up money for I was a partner. That way I trust everyone involved, and I know exactly what is going on. I don't think I've ever put money in on something I have no idea about, or refuse to play myself.
"Man Babes" #AxelFabulous
