If you’ve read many of my columns, you probably know that some of the advice I offer is important enough to bear repeating.
In this post, I thought I’d put together the seven best pieces of advice I have. They’re all things I’ve told gamblers, both in person and online, more than once.
1 – Manage Your Casino Bankroll
The first and most important step in managing your casino bankroll is to make sure that any money you gamble with is money separate from your other funds and that isn’t needed for anything else.
Spend some time with a CPA and a financial planner before deciding what you can and can’t afford. Treat gambling as part of your entertainment budget.
Any good CPA or financial planner is going to advise you to do some things with your money before gambling with it:
- Have savings for an emergency. Most financial professionals recommend having between three months’ and six months’ worth of living expenses set aside for this. Here’s my take – if you don’t have 6 months’ worth of living expenses saved, you shouldn’t spend any money gambling. Put that money toward your emergency fund instead.
- Have savings for retirement and other long-term goals. Other long-term goals might include saving for a down payment for a house or for your kids’ college tuition. The old rule used to be to save 10% of everything you earn, but if you’re not young anymore (and who is), you should probably increase that to 20% of your earnings. If you’re unable to afford to save that aggressively, you don’t have extra money to gamble with.
- Be mostly debt-free and caught up on your bills. You shouldn’t be gambling if you’re deep in debt. The only acceptable debts are a car payment and a house payment. And I’m not so sure about the car payment. (I pay cash for my cars.) Also, if you’re paying late fees, or if you’re behind on your child support, you don’t have a gambling bankroll.
- Have appropriate amounts of insurance. Everyone should at least try to have health insurance. If you can’t afford health insurance even through Obamacare, you need to be saving as much cash as you can for the next medical emergency. You also need car insurance if you drive, and you need homeowners’ insurance if you own a home. If you’re a renter, you should have renters’ insurance. Finally, you should have life insurance. It’s cheap, and it will do a lot to help out your family.
That’s just the beginning of bankroll management, though. Once you’ve determined that you can afford to set aside money for gambling, you need to treat it like any other item on your overall budget. You should portion it out according to your goals.
If you can afford $200 a year to gamble with, you probably shouldn’t bet it all on red at the roulette table – at least, not unless you feel like you’re going to get $200 worth of fun out a bet that’s going to lose more than half the time.
And if you’re an advantage gambler, you must spend even more time deciding what size bets are appropriate because you want to reduce your risk of ruin as aggressively as possible.
2 – Learn Some Math
No one should be gambling if they don’t understand how the casino makes its money. And that requires some basic math skills.
Don’t worry, though – you don’t need advanced algebra for this – just some probability math.
If you can add, subtract, multiply, and divide, you can learn enough probability to understand what’s really happening when you gamble in a casino.
3 – Play Games With a Low House Edge
The house edge is a statistical prediction of how much each bet costs you in a casino.
This is a long-term, over hundreds and thousands of bets phenomenon. Of course, on any given pass bet at the craps table, you’re going to lose $100 or win $100.
I suggest sticking with games where the house edge is 1.5% or lower. A house edge higher than that tells me a game isn’t worth my time or effort.
4 – Learn to Play Poker
The house edge doesn’t apply to real money poker. And by real poker, I mean a poker game where you’re competing with other poker players at a table. Games like Ultimate Texas Holdem, which is bankrolled by the house, don’t count. Games like that have poker trappings but are just casino games like blackjack. You’re playing against the casino, not the other players.
Why should you learn to play poker?
For one thing, it’s probably your best chance of getting a mathematical edge when playing a traditional gambling game.
It’s hard to get an edge at any kind of casino game. It’s even harder to beat the sportsbook (although it can be done.)
But in poker, all you need to do is be better at poker than the other players.
If you’re playing in casinos, the house takes 5% of every pot, though, so you must be so much better than the other players that you can afford that 5%.
On the other hand, if you’re playing in home games, you don’t have to worry about the rake at all – not usually, anyway.
Most poker players still lose money. You can be in the top 5%, though – it just requires know-how and discipline. Go read The Theory of Poker, find a low stakes game, and get started.
5 – Don’t Play Slot Machines
Slot machines are some of the worst bets in the casino.
And worse, you don’t even know how expensive they are. They don’t tell you what the house edge is on these games.
But even in the best case scenario, the house edge on a slot machine game is 6% or higher, making it a worse bet than ANY of the table games (assuming you’re not making sucker bets at the craps table or something.)
In the best slot machine game with the 6% house edge, your expected loss per hour is between $90 and $108.
Now assume you’re playing blackjack at 100 hands per hour and for $10 per hand. You’re betting 3 times as much per bet, but you’re still only putting $1000 per hour into action.
And, if you stick with games with good rules and use basic strategy, the house edge is less than 1%. We’ll call it 1% just to keep the math simple.
Your expected hourly loss on that the blackjack game is only $10 per hour.
How can you justify playing slots instead of blackjack given the cost?
And – keep this in mind – MOST slot machines have a higher house edge than 6%. That was just for illustrative purposes. You might be facing a house edge of 8% to 25% (or more).
6 – Play Video Poker Instead
If you absolutely hate playing table games in the casino, consider playing video poker as an alternative to slots.
If you play the right games with the right pay tables, you can get the house well below 1.5%. In some cases, if you combine optimal play with the right pay tables and the rewards from the slots club, you can play with effectively an edge over the casino.
There’s a whole world of information about video poker out there. You can find a lot of it on our site.
7 – Get Help If You Need It
Gambling addiction is every bit as big a problem as any kind of substance abuse. Scientific studies have clearly demonstrated that gambling’s effects on the brain are every bit as serious as that of chemicals. Why would people take it less seriously than a drinking or drug problem?
What are the symptoms that a problem gambler demonstrates?
For most problem gamblers, this means gambling way beyond their bankrolls, which brings eventual financial ruin.
And, take it from me, if you destroy your family’s financial health, you soon won’t have a family. I’ve seen it happen multiple times.
The good news is that there’s plenty of help out there if you’re willing to seek it out. Treatment centers can help, and there’s also good old-fashioned Gamblers Anonymous.
Some gambling advice is so good that it bears repeating. In this post, I’ve shared the best of what I’ve got.
Mostly it’s aimed at beginners, but even a lot of gamblers who’ve been at it for years could use a lot of this advice.
I have a friend who wastes a fortune on an annual basis playing slot machines, for example. He calls me now and then to let me know how much he’s won at the casino.
He never calls to brag about how much he’s lost, though.