Why high house edge at side bets
Why casino charge such a high per cent? I think >5% is uncalled for? Even at >3% I think is a bit dear.
I mean casinos can charge 3% on blackjack or triple zeros on roulette, but casinos choose not to do it. Probably because it is not fun for the players if they experience too much losing sessions. It is better for the casino to charge a low edge, but milk the player over a longer period.
Why not so on side bets? I hear quite common on tables when a player says to another: 'never place a bet on xxx, it is a sucker bet'. Why not make all side bet around 2%?
I read that casino charge high house edge on games that has a high pay out ratio, like 3 to 1, 5 to 1, etc. Because the game carries more risk for the casino. But surely a thousand bets of $10 on a side bet is less risk than a $10000 bet on a high limit baccarat?
If no one played the side bets they would go away. But people play them.
Quote: NicksGamingStuffThe worst one is the Fortune Bonus on Pai Gow Poker, everyone plays that religiously, sometimes $5-$10 or more to get the envy bonus, I will toss a buck here and there for fun, more often than not I never get anything on it, exactly how the casino makes their money off of it, the additional Progressive is also an incentive that many people love to play!
Actually, the Fortune Bonus, with the best paytable, isn't much worse than the basic pai gow bet, and a $5 bet on a full table, with the Envy bonus, actually becomes a BETTER bet than the basic bet.
Quote: newbie49Typical side bet house edge range from 3% to 10% per cent. Some side bet go up to 30%.
Why casino charge such a high per cent? I think >5% is uncalled for? Even at >3% I think is a bit dear.
Better ask: why not?
Side bets are usually used in low-edge, high-variance games, where player's bankroll can end up being padded almost as easily as blown. A side bet serves to let the player donate his money to the casino faster, while offering palatable rules for the main game. And as for players losing too much, they lose or win on the main game - the side bet is just on the side. It can gradually suck the money out without giving the feeling of loss, much like insects that anesthetize the bite point.
Also, the Main bet in PGP is always less than the bonus bet in terms of HE, even accounting for envy, but its not bad; it's reasonable enough in terms of HE.
Basically, game designers look for 2-3% on the main (flat) bet and 4%-9% on the side bets, and 20%-50% on progressive payout tables because multi-level payouts and their high variance can also produce hard swings against the house. Three card poker dumped with its original pair-plus table.
Quote: newbie49Typical side bet house edge range from 3% to 10% per cent. Some side bet go up to 30%.
Why casino charge such a high per cent? I think >5% is uncalled for? Even at >3% I think is a bit dear.
I mean casinos can charge 3% on blackjack or triple zeros on roulette, but casinos choose not to do it. Probably because it is not fun for the players if they experience too much losing sessions. It is better for the casino to charge a low edge, but milk the player over a longer period.
Why not so on side bets? I hear quite common on tables when a player says to another: 'never place a bet on xxx, it is a sucker bet'. Why not make all side bet around 2%?
For the same reason they have a "resort fee" and airlines now charge for bags. People accept it more than if you change the main rules. So instead of addding the third zero they put in abuse people enjoy--"lucky ladies bet? Thank you sir, may I have another?" I say let them keep doing it that way, the fool and his money were lucky enough to get together in the first place.
Quote: AZDuffmanFor the same reason they have a "resort fee" and airlines now charge for bags. People accept it more than if you change the main rules. So instead of addding the third zero they put in abuse people enjoy--"lucky ladies bet? Thank you sir, may I have another?" I say let them keep doing it that way, the fool and his money were lucky enough to get together in the first place.
I agree, however it should be pointed out that in the case of lucky ladies, the HA is necessarily high to thwart counters. This particular bet would be extremely vulnerable to advantage play at even a regular side-bet house edge (meaning the same winning hands with a better paytable).
Its obvious the side bets can and will survive despite sharpies knowing to avoid it. So its just one more way of milking more money out of a player. Offer One Dollar Blackjack but also offer all these ridiculous side bets... and its going to be a profitable table.
Take craps, for example. You are new to the game and you see an "old timer" craps player making all sorts of prop bets in the center of the table. Maybe the old timer wins a couple of hard 6s and hard 8s. Either way, they are having fun, hooting and hollering, and seem to know what they are doing. So you decide, hey if the "experienced" craps player knows what they are doing, maybe I should copy them... After all, the house edge can't be more then 2 or 3%... right?
I bet if you go around and ask a hundred players who play the hardways, or the craps check, etc. what the house edge is, the vast majority would not be able to tell you. My guess is that they think the house edge is about 3% to 5% at most.
The hard part is that we are posting on a forum of people who are already educated about casino games and house edges or who want to learn and understand more. The average Joe wants to have a good time, and will copy what other more "experienced" players are doing just to fit in.
Quote: P90Better ask: why not?
Side bets are usually used in low-edge, high-variance games, where player's bankroll can end up being padded almost as easily as blown. A side bet serves to let the player donate his money to the casino faster, while offering palatable rules for the main game. And as for players losing too much, they lose or win on the main game - the side bet is just on the side. It can gradually suck the money out without giving the feeling of loss, much like insects that anesthetize the bite point.
So they are totally unaware of the dwindling of their chip stack? Not me.
Quote: NicksGamingStuffThe worst one is the Fortune Bonus on Pai Gow Poker, everyone plays that religiously, sometimes $5-$10 or more to get the envy bonus, I will toss a buck here and there for fun, more often than not I never get anything on it, exactly how the casino makes their money off of it, the additional Progressive is also an incentive that many people love to play!
Mohegan Pocono has a new progressive bonus at 3 Card; A-K-Q of spades pays the bonus, any other royal pays $500 for 1, straight flush pays $70 for 1, 3 of a kind pays 50 for 1. There were also envy bonuses; $100 for the spade royal, $50 for the other royals.
There are 22,100 3 Card hands. The day I was there, the bonus meter was at $1400ish. I think that is the worst side bet I've ever seen.
I play to have fun and bet what I want when I want to, without worrying about it. Indeed, the times I really struck it big - way over the top - is when I took home thousands from hitting the crappy progressive bets on PGP: $7 on PG insurance on 9-high Pai Gow = $700, $2,300 on the Pair Plus on Three Card poker, etc. When I bet my usual $25 main bet, I'd win $23.25 (or $25 on EZ Pai gow), or 6:5 on odds on a 6 or 8 point.
When I gamble, I gamble to have fun and hope to win.
If I choose to look at the math, I don't gamble at all.
Quote: gamblerI actually think that a lot of players don't understand what the house advantage is for a lot of these side bets.
The average Joe wants to have a good time, and will copy what other more "experienced" players are doing just to fit in.
True. And for the side bets the "understanding" when they start to play may be quite correct but by the time that cocktail waitress has come around a few times, the attitude may morph into a greater emphasis on the have a good time.
I think it might be akin to those Casino Fun Book Coupons that are adverized as being 500 dollars in value but the averag visitor to the casino probably never utilizes more than fifty dollars worth of coupons or some such figure. So there is a Declared Value to the coupon book and a Realistic Value. Perhaps its pretty much the same thing with this House Edge stuff. There is a mathematically derived and proper House Edge ... and then reality sets in across a mix of players and a few mixed drinks and some girlfriends that have to be impressed and an attractive dealer in a low cut blouse, not to mention some players who don't even know the basic rules much less the footnotes to the rules. With all that, I think you get a far different House Edge for some players.
Quote: PaigowdanWhen I gamble, I gamble to have fun and hope to win.
If I choose to look at the math, I don't gamble at all.
There is always poker, and there is counting at Blackjack.
Although the latter is unreliable. For instance, despite using a relatively sophisticated four-parameter count and following it rather religiously, I figure I only managed roughly even (and it could have been worse) - but I can at least play knowing my expectation is positive. A lot of players lose with a positive expectation, but a lot more win with negative expectation [mostly because a lot more players have negative expectation]. In low-edge games, your chances of getting ahead are still very strong.
Quote: dmSo they are totally unaware of the dwindling of their chip stack? Not me.
A player might be aware of a dwindling chip stack but not necessarily be alert to the fact that he is losing it on the "side bet". Its sort of a mental "fling" and carries an attitude wherein the dwindling chip stack is blamed on the main game.
I think the above is too cynical of a take on things. Hotel "resort fees" are shady, but it doesn't take a rocket scientist to add the fee to the base rate if you're walking in or purchasing directly from the hotel. The fees though, IMHO, are more about being competitive via deceit in online booking systems. If someone does an Expedia search and sorts by price the $10/night moved from the base rate to the resort fee lets resort X get noticed easier. It doesn't actually raise the cost of the room, though it does make the shopper think the travel is cheaper than it will really be.Quote: AZDuffmanFor the same reason they have a "resort fee" and airlines now charge for bags. People accept it more than if you change the main rules. So instead of addding the third zero they put in abuse people enjoy--"lucky ladies bet? Thank you sir, may I have another?" I say let them keep doing it that way, the fool and his money were lucky enough to get together in the first place.
Side bets and airline bag fees are not the same thing. They're actually un-bundling services, at some base fixed cost, in order to allow more consumer choice, which results in lower costs to those who care about costs, without sacrificing service.
In the airline example rather than charging every passenger a share of the bagging transportation costs, you shift the costs onto those actually sending luggage. If I'm a cheap passenger I pack light and carry on and enjoy a lower fare. If I want to bring lots of luggage I still can, I just pay for the added privilege.
In a casino, a certain house edge needs to exist in order for a table to be operated. We've all heard that craps or 3:2 blackjack would never be allowed to be added to a casino floor if they were invented today. Instead new table games have house edges closer to ~5%. Obviously casinos can't change player preferences overnight and force all pass line betters in craps to suddenly start betting on red/black at roulette, but they can try to push players towards center bets at craps or switch some blackjack tables to 6:5. Or, in a nice win/win move, they can offer side bets that give those players who want a low bet limit and a chance of a high payoff but who don't care about house edge as much a new gambling option. That brings in additional money, which makes the table profitable enough to leave the base game rules alone.
I'm not saying there is no element of psychology here. It may very well be that people are more resistant to a price increase than a surcharge, but in general as long as there isn't a huge fixed cost which gets passed along, consumer should applaud additional choices that allow savvy individuals to pass on costs to those who don't dislike bearing them as much.
Quote: sunrise089Or, in a nice win/win move, they can offer side bets that give those players who want a low bet limit and a chance of a high payoff but who don't care about house edge as much a new gambling option. That brings in additional money, which makes the table profitable enough to leave the base game rules alone.
I'm not saying there is no element of psychology here. It may very well be that people are more resistant to a price increase than a surcharge, but in general as long as there isn't a huge fixed cost which gets passed along, consumer should applaud additional choices that allow savvy individuals to pass on costs to those who don't dislike bearing them as much.
It's a good point. I was playing downtown once at a table with excellent BJ rules and 2 decks. Everybody else at the table was making the side bet except me. All of them (including the dealer) would chide me when I missed a winning hand. At the time, I thought it was ridiculous to sit down at a low house-edge table and fritter your money away a buck at a time. But in retrospect, all those side-betters were keeping that table financially viable.
I did think it was funny how the pit boss was keeping an eye on me, suspecting me for counting because I was playing basic strategy and not making the side bet.
1. Any bet with the potential to pay off big almost always carries a high house edge. This is a lingering artifact from the days when casinos were mostly small, independent operations, and the management was primarily people with no necks who grunted a lot. The specter of a high payoff made multiple times possibly draining the casino's available cash haunted casino manglement. To compensate for this dire threat, the no-necks made sure that all such bets had an insanely high house edge, to ensure that the house would be well ahead when the big payoff finally occured (the Riverside in Reno, for example, was killed by two people hitting max-payoff keno tickets in the same week, so the danger was at least somewhat real). Of course, this logic fails when you consider less drastic payoffs such as the yo-eleven in craps--couldn't it pay 16 to 1 and still have a high house edge, and wouldn't word spread among prop bettors if one casino did that? But many, many of the current practices in casinos are from force of habit or "custom" rather than logic.
2. Sometimes the increment on a payoff pretty much forces the house to charge a high vig, or no vig at all. If you had a roulette wheel with only ten numbers (I believe there is a French game that is like that--"boule" or something?), then if you wanted to pay less than true odds on a single number, you'd have to pay 8-1 (or less) rather than 9-1, resulting in an 11% HE. Similarly, it would be pretty hard to construct a decent payoff for, say, hard ten, which with 8 losers and 1 winner, has to pay 7-1 or worse to make a profit for the house.
Reason 2A: The house can get away with it. People drool at the prospect of a 500-1 payoff even if the true odds are 675-1. Even if they are aware of the discrepancy (and very few are), in most people's minds, both 675-1 and 500-1 are "big", so they don't differentiate between the two.
Quote: mkl6543212. Sometimes the increment on a payoff pretty much forces the house to charge a high vig, or no vig at all. If you had a roulette wheel with only ten numbers (I believe there is a French game that is like that--"boule" or something?), then if you wanted to pay less than true odds on a single number, you'd have to pay 8-1 (or less) rather than 9-1, resulting in an 11% HE.
Isn't that 10%, per 8*.1+(-1)*.9=-.1? But anyway, I don't think it's actually impossible to make just about any game to provide a decent (or indecent) EV.
In this case, for instance, you could make subsequent hits on the same [wrong] number result in a push - that way, the return would go from 90% to a full 99% on all but the first spin, with no change in how the game is played. Returning half the bet would provide 94.5%, similar to 00 roulette. And then there is the whole range of bonus payouts that could be played around with. For instance, paying 16 to 1 for hitting two in a row (+.8%), et cetera. Or 'consolation' pushes if you want to avoid big payoffs.
Quote: mkl654321There are two reasons for the fact that side bets are usually crappy:
(snip)
2. Sometimes the increment on a payoff pretty much forces the house to charge a high vig, or no vig at all. If you had a roulette wheel with only ten numbers (I believe there is a French game that is like that--"boule" or something?), then if you wanted to pay less than true odds on a single number, you'd have to pay 8-1 (or less) rather than 9-1, resulting in an 11% HE. Similarly, it would be pretty hard to construct a decent payoff for, say, hard ten, which with 8 losers and 1 winner, has to pay 7-1 or worse to make a profit for the house.
As someone has posted, the general rule in craps is "the higher the variance, the higher the HA". mkl explains this in #1. One of the big exceptions to this general rule, the Any 7 bet, is an example of #2. The true odds against the seven are 5:1, but the casino is not going to pay true odds; with no half- or quarter-dollar chips, 4:1 is the next "step down". This results in an HA of 16.67%, but the SD is only 1.86 times the amount of the bet, compared to over 5 times for the 30:1 bets.
Cheers,
Alan Shank
Woodland, CA
Quote: MathExtremistAnother reason, which I don't think has been mentioned: side bets are almost always proprietary and patented, so the casino has to pay money to lease them. If the side bet doesn't significantly improve the drop and win on the table, beyond what would be considered noise or typical fluctuations, then the casino won't keep paying for it and out it goes.
A perfect example of this would be the 20+ Streak tables in Blackhawk from about 1999 to 2009. I believe the fee was only in the
$500 monthly range. In early 2010 the limits in Colorado were raised from $5 to $100. On my last visit there was only 1 streak
table in Blackhawk.
Quote: goatcabinAs someone has posted, the general rule in craps is "the higher the variance, the higher the HA".
It's not just in craps. In general, starting from Blackjack and progressing up to craps, roulette, slots and ultimately keno, the higher the potential payout, the higher the house edge.
Quote: P90It's not just in craps. In general, starting from Blackjack and progressing up to craps, roulette, slots and ultimately keno, the higher the potential payout, the higher the house edge.
Then perhaps by changing that fact may be the way to stop the decline of BJ in general.
Quote: P90It's not just in craps. In general, starting from Blackjack and progressing up to craps, roulette, slots and ultimately keno, the higher the potential payout, the higher the house edge.
Ding. In a casino, you buy variance with expected value.
Don't feel bad. The Casino loved to see her hit a long-shot so many times in quick succession. Just about everyone at the table started piling on that bet then and continued the habit long after she left.. and continue the habit to this day. Oh, and that lucky lady who did so well with her non-expected winnings. She talked to all her friends about her experience and brought several of them with her the next week. The casino was very happy about that too.Quote: RavzarI once saw a lady win 30-1 three times in 4 hours though for $750 per time... damn her and her non statistical expectation winnings.
Except for craps odds!Quote: PerpetualNewbieDing. In a casino, you buy variance with expected value.
Quote: newbie49Typical side bet house edge range from 3% to 10% per cent. Some side bet go up to 30%.
Why casino charge such a high per cent? I think >5% is uncalled for? Even at >3% I think is a bit dear.
In Vegas, a significant number of casinos offer a side bet with a house advantage of around 70%, and not only do most people who play the game make the bet, but having it come up when you don't make it is probably considered the ultimate stupid play.
I refer to the "third dollar" on Megabucks slot machines where it does nothing more than activate the progressive. (This assumes that, in fact, most Megabucks machines don't increase any of the other payouts or activate other features (e.g. the Wheel of Fortune "Spin") with the third coin other than the progressive jackpot. Since the other payouts are the same, for all intents and purposes, it is a "side bet."
Assuming that the chance of hitting the jackpot is 1 in 50,000,000 and the jackpot is $15,000,000, the house expects to gain $35,000,000 out of every $50,000,000 bet on just the progressive - a 70% take!
Yet there have been any number of stories (one of which has been documented) about the person who got the three Megabucks symbols but only played one or two coins instead of three. After all, why bother playing a Megabucks machine except for the jackpot?
