Most people don’t write about casino gambling for a living like I do, so they can be forgiven for not knowing all the things about the subject I do. But enough people gamble that more people should know more of the facts about casino gambling. Everything I write assumes that the best gamblers are the best-educated gamblers. If you’re going to spend your money on something—be it gambling, food, books, or movies—you should know enough about the subject to get your money’s worth.

Most people have such a poor understanding of how casino games work that they don’t even think about it from the perspective of trading money for entertainment—even though that’s exactly what you’re doing in the long run. Once you’re better educated about casino gambling, you can make better, more sensible decisions.

Here are 10 things most people don’t know about casino gambling (in no particular order):

## 1- Not All Roulette Games Are the Same

You don’t need to spend much time in a casino before learning what roulette is. It’s the game with the spinning wheel and the metal ball. You bet on which number the ball lands on.  In fact, there are a bewildering number of ways you can bet on roulette. You can bet on a single number, 2 numbers at a time, 3 numbers at a time, etc.

The house gets its edge at roulette because all the payoffs seem like they’d be fair given that the numbers on the wheel are 1 through 36. If you hit your single number bet, you get a 35 to 1 payoff. If you bet on black (and half the numbers are black), you get an even money payoff. But those aren’t the only numbers on a roulette wheel. The casino also includes a 0 and a 00 on a standard American roulette wheel. This gives the casino a mathematical edge over the player. That edge is easy to calculate, too.

You assume that you’re betting \$100 per spin on black, for example. Then you assume a perfect set of 38 spins. (There are 38 numbers on the wheel if you include the 0 and the 00.) You’ll win 18 times, because 18 of the numbers are black. You’ll lose 20 times, because 18 of the numbers are red, and 2 of the numbers are green. This means you’ll win \$1800 and lose \$2000, for a net loss of \$200. The casino’s edge is the average amount you expect to lose per spin, expressed as a percentage. That just means you divide 200 by the 38 spins, and you get \$5.26 per spin. That’s 5.26% of \$100.

Many gambling experts measure how good or bad the odds of a casino game are by looking at the house edge. This is a fair way to do it, although it doesn’t account for factors like how many bets per hour you’re making. When you compare roulette to blackjack or craps, it looks like a lousy bet. If you use basic strategy when you play blackjack, the house edge falls between 0.3% and 1%. If you stick with the pass line bet in craps, the house edge is only 1.41%.

But not all versions of roulette have this sky-high house edge of 5.26%. Some casinos—especially online casinos, European casinos, and Atlantic City casinos—offer roulette where the wheel has only a single zero. This reduces the house edge from 5.26% to 2.70%. You would think that the house edge would be cut exactly in half when you remove one of the zeros, but that’s not how the math turns out. On a single zero roulette wheel, you have 37 numbers. 18 are red, 18 are black, and one is green (the zero).

You can do the same calculations for the house edge here. You bet \$100 on red 37 times in a row. You win \$1800, but you lose \$1900. This makes your net loss over 37 spins \$100. \$100 averaged out over 37 spins is \$2.70 per spin. If you can find a roulette game with a single zero, ALWAYS play that game over a roulette wheel with 2 zeros.

## 2- There’s a Bet at the Craps Table with No House Edge

I mentioned that the pass line bet at the craps table has a house edge of only 1.41%, and that’s a great deal. But there’s an even better bet at the craps table that isn’t labeled. It’s called the “odds bet” or the “free odds bet.” When a shooter makes a come out roll in craps and sets a point, you can place an additional bet called the odds bet. This bet pays off at the same odds as you have of winning the bet. This mean that the bet has no house edge at all.

The following are the possible point numbers in craps:

• 4
• 5
• 6
• 8
• 9
• 10

The odds bet pays off when the shooter makes the point before rolling a 7. If the point is 4 or 10, the bet pays off at 2 to 1 odds. If the point is 5 or 9, the bet pays off at 3 to 2 odds. If the point is 6 or 8, the bet pays off at 6 to 5 odds. I should point out that you’ll lose the odds bet more often than not, but when you win, the payoff is enough that in the long, you’ll break even.

When you combine the 0% house edge with the already low edge on the pass line bet, the house edge for all the money you have in action drops significantly, too. Casinos base their maximum bet on the odds bet on a multiple of your original pass line bet. Some casinos allow 2X, 5X, 10X, or even 100X odds.

The more you can bet, the lower your cumulative house edge becomes. The pass line bet plus the free odds bet is the best bet in the casino that doesn’t involve any kind of skill. (Counting cards plus basic strategy is a better bet, but it takes tremendous skill. Video poker requires being able to choose the right pay table and then making the right decisions on every hand.)

## 3- Almost All Casino Games Are Examples of “Independent Trials”

Some players have a simple system for roulette. They sit at the table and wait until a certain color comes up a certain number of times in a row, then they bet on the opposite.

Here’s an example:

My friend Brian likes to wait until red has landed 4 times in a row. At that point, he figures black is overdue, so he places a bet on black. After all, the odds of red coming up 5 times in a row is pretty low. And in the long run, we know that the game must eventually even out so that black and red come up close to 50% of the time each.

There are 2 flaws with this kind of system:

The first is that you’re not betting on the ball landing on red 5 times in a row. You’re betting on the results of the next roll. The other events have already happened. The probability for that next roll doesn’t change based on the previous rolls. There are still 38 numbers on the wheel. 18 of them are still red. The probability of a red result is still 18/38, or 47.37%.

In other words, each spin of the roulette wheel is an independent trial. The odds don’t change based on what happened previously. The roulette wheel has no memory. This is true of almost all casino games. The only real exception is blackjack. As each card gets dealt from the deck, the composition of the deck—and therefore the probability—changes. Card counters can take advantage of this, but only if the casino isn’t shuffling the deck after every hand.

Trying to make money via a hot streak or a cold streak is a fool’s errand. The 2nd flaw with this kind of system is that it assumes that the long run is much shorter than it actually is. Sure, the results will even out in the long run, but the long run means tens of thousands of spins of the wheel. 5 results in a row certainly does NOT constitute anything close to the long run.

## 4- It’s Cheaper to Visit Casinos in the Middle of the Week

I used to work for Hotels.com. I learned quickly that hotel rates in Las Vegas are managed more aggressively than hotels in other parts of the country. Hotel prices are a function of supply and demand. If you’re operating a 1000-room hotel and casino, and you have no reservations book for a specific night, you’re going to sell rooms as cheap as possible—especially if the specific night is coming up soon.

Important Note

On the other hand, if you already have 990 rooms reserved, the remaining 10 rooms are a valuable commodity. You’ll charge more for those rooms. Most people visit Vegas on the weekends—specifically, Friday night and Saturday night. You can expect the hotel prices to be correspondingly higher on those nights as a result.

In fact, the average hotel rates on Friday and Saturday nights are probably at least double what the rates would be during the week. Want to save money on your next trip to Vegas? Try to book your rooms in the middle of the week instead of on the weekend. Keep in mind, though, that Vegas is also home to all kinds of conventions and events. When a convention is in town, you’ll pay higher hotel rates just because a larger percentage of rooms are booked during the event.

## 5- Video Poker Is SO Much Better than Slots

At 1st glance, video poker and slot machines look about the same. You have a payline, you have symbols on a video screen, and you get payouts based on the combination of symbols that appear on that payline. But there are some big differences.

Slot machines don’t give you any information about the probability of getting any particular symbols. A cherry might be programmed to show up once out over 8 spins or once out of every 24 spins. Sure, a slot machine has a pay table that tells you what payouts are triggered by which combinations. But without the corresponding probabilities of getting those combinations, you don’t really know anything about the payback percentage for the game or the house edge.

On the other hand, a video poker machine uses a virtual deck of playing cards. The odds of getting a specific card or a specific kind of card are based on a 52-card deck. The probability of getting an ace is 4/52, or 1/13. The probability of getting a heart is 13/52, or 1/4. Since you have both the probabilities and the payouts for the various combinations, you can crunch the numbers to get the payout percentage for the game—assuming you make optimal decisions on every hand. This makes video poker superior to slot machines in the respect that you can choose between better games and worse games.

On top of that, the average slot machine game probably has a top payout percentage of 94%. Most are probably considerably lower than that, especially if you’re not playing in a competitive casino like the ones in Vegas. (Good luck finding a slot machine with a 90% payback percentage in Oklahoma, for example.)

But most video poker games have a payback percentage that starts at 93% or 94%, and they go up from there based on how good the pay tables are. With a little study, you can get much better gambling from video poker machines than you can from slot machines. You also have the additional intellectual stimulation of deciding how to play each hand.

## 6- Changing Your Bet Sizes Based on Whether You’ve Been Winning or Losing Doesn’t Help

The most common betting system in existence is the Martingale System, where you double your bet when you lose, and re-double your bet when you lose again, and so on until you win. At 1st glance, this system seems foolproof. Your goal is to have a net win after the progression equal to the size of your original bet. If you continue with the system, this will happen pretty often, too.

For example
Suppose you bet \$5 on the 1st spin of a roulette wheel and lose. You bet \$10 on the next spin, and you lose again. You’ve now lost a total of \$15. You double the size of your bet again to \$20, and this time you win. You’ve won back the \$15 you lose on the 1st 2 bets, and you have a \$5 profit besides.

The problem with this system is that long losing streaks are more common than you think, and when you’re doubling your bet size, the amounts you’re having to bet get bigger than you’d think. Most casinos have a maximum bet of \$500 on the even money bets at the roulette table.

How many bets does it take to reach \$500?

• \$5
• \$10
• \$20
• \$40
• \$80
• \$160
• \$320
• \$640

You only have to lose 7 times in a row before your system breaks down in the face of the casino’s betting limits. That sounds next to impossible, but it happens several times a day at every casino offering roulette. Also, think about what you’re having to risk on those later spins just to get a net profit of \$5. If you place that \$320 bet on your 7th bet and win, you’re only up \$5. But you had to risk \$320 to get there. And you’ve already lost \$315 at this point, too.

All betting systems involve lowering and raising your bets in an attempt to overcome the house edge, but you can’t do it. A bet with a house edge is like a negative number. You can’t add together a bunch of negative numbers and wind up with a positive number, no matter what you do to the size of those numbers. I’m not suggesting that there’s no use at all for betting systems. They can be a fun way to gamble. They’re never a sure thing, though, and if you use a betting system, you’ll still lose all your money in the long run.

## 7- Counting Cards Is both Easier and Harder than You Might Think

You don’t really have to memorize which cards have already been played when you’re counting cards. And you don’t need to know which cards are in the deck or be able to predict what’s about to be dealt. You only need to track and estimate (in a rough way) what the ratio of high cards to low cards is in the deck.

Card counting works because you raise your bets when there are proportionally more aces and 10s in the deck compared with lower value cards. That’s because 10s and aces increase the probability that you’ll get a blackjack, or a natural. A blackjack is a 2-card hand that totals 21, and when you get one, the casino pays you off at 3 to 2 odds. By putting more money into action when you have a higher probability of getting such a hand, you get a mathematical advantage over the casino.

Most people just add 1 to the count every time they see a low card come out of the deck. When a high card comes out, they subtract 1 from the count. When the count is positive, it’s time to raise the size of your bets. But in another respect, counting cards is harder than that description might make you think.

Casinos don’t like it when you count cards, so to pull it off, you need to be able to count cards without looking like you’re counting cards. That’s tough. Casinos are loud, distracting places. It’s hard to concentrate in such a place to begin with. To concentrate without looking like you’re concentrating adds a whole new layer of difficulty to the task at hand. So yeah, counting cards is both easier and harder than you think it is.

## 8- The Casinos Really Don’t Mind When You Win

Some players think that the casinos and their managers get mad when you win. They even suspect the casinos of changing the odds on the games to catch up.  These players aren’t looking at the big picture.

For a casino to stay in business, some of the players must be able to go home winners at least some of the time. Otherwise, they’d have no reason to play. The casinos’ edge comes from winning slightly more often than you, and they also get an edge from paying your out slightly less than they would if they were offering an even-money game. Sure, they know some players will win some of the time. But in the long run, they should be hugely profitable as long as they’re not mis-managing other elements of their operation.

## 9- Online Casinos Are Surprisingly Honest

Not all online casinos are honest, but the paranoid ravings of some players in gambling forums should be ignored. That’s because online casinos, for the most part, understand that there’s more money to be made in the long run from offering an honest game and not cheating. You’ll see plenty of conspiracy theories based on anecdotal evidence when you read player accounts on forums, but most of the time, these players don’t offer any kind of evidence that anything unusual has happened.

Gambling—even at an online casino—involves short term variance. Anything can happen over 100 slot machine spins—anything at all. A losing streak doesn’t mean the casino is cheating. It just means you’ve hit an unlucky streak. You’re more likely to encounter a casino with confusing terms on their bonus conditions. Or you might find a casino that delays payouts on your winnings. But cheating? It’s rare.

## 10- You’re Required to Pay Taxes on Gambling Winnings

Here’s what the IRS has to say about gambling winnings:

The following rules apply to casual gamblers who aren’t in the trade or business of gambling. Gambling winnings are fully taxable and you must report the income on your tax return. Gambling income includes but isn’t limited to winnings from lotteries, raffles, horse races, and casinos. It includes cash winnings and the fair market value of prizes, such as cars and trips.

If you gamble at a casino regularly, you should keep a diary of your activities—especially your wins and losses. If you win more than a certain amount, the casino will report your winnings to the IRS. They won’t report your losses.

But you ARE allowed to deduct your losses from the amounts of your winnings. This way you only pay taxes on your net win.  You CANNOT deduct more from your gambling losses than the amount you’ve won. In other worse, if you have a \$3000 win an \$4000 in losses, you can only deduct \$3000 of those losses.  In effect, you’ll avoid paying taxes on the \$3000 in winnings because you lost more in the year than you won.

Conclusion
Gambling can be a lot of fun, but it can also be a confusing subject. Understanding how gambling works can help you in multiple ways. The most important way is in helping you make better decisions about how you’re spending your entertainment dollars. Your goal should be to have as much fun as possible for your money.

If you want to be a professional gambler, you should know all of the above, too. But you’ll need more knowledge and skill than what’s been provided in this post. I’ve written other blog posts about professional gambling and advantage gambling for this blog. You should check those out if it’s something you think you’re interested in.

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