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Blackjack Money Management

The only reason I play Blackjack is to make money. “Same for me”, you might say, but is that really true? A lot of people play with the hope of winning, but they don’t really expect to win, at least not on a consistent basis. There is no money management method that I can teach you which will allow you to win consistently at Blackjack unless you learn how to count cards. What do I mean by ‘consistently’? I don’t mean that I win every time; what I mean is that I win more than I lose over a year’s play, but I do have losing sessions and, much like you, they usually come when they’re least welcome.

My Blackjack play (it should be called work because, if nothing else, it’s boring as hell) is based on what is called ‘expectation’. Almost all of the math for money management is based upon expectation, so it’s a concept you need to understand thoroughly before you commit large amounts of $$$ to the game. I never know if I’m going to win the next hand I play, but I do have an ‘expectation’. If the count is in my favor, I’m probably betting more money on the hand and, if I took the time to think about it, I could come up with my exact expectation for that hand. If you are following my lessons, right now you’re learning how to convert the running count into the true count. That’s a very important skill to have, since the true count enables us to estimate our advantage (or lack thereof) and to bet an appropriate amount of money.

You won’t be involved with Blackjack very long without hearing about a thing called the ‘Kelly Criterion’ and you’ll probably see a lot of arguments about it in the news groups or at other web sites. Let me give you my read on it. This is a mathematical principle developed by a person named Kelly and it says that in order to bet on an event in which you have an edge and still be assured that you won’t go broke, bet a portion of your bankroll that is in proportion to your advantage. For example, if you have a $3000 bankroll and a 1% advantage, then bet 1% of your bankroll, or $30. By following this principle as your bankroll goes up and down, you’ll be maximizing your profit while minimizing your risk.

But that’s not very practical at a Blackjack game; if you win $30 and your bankroll is now $3030, how do you bet $30.30 on the next hand (assuming the advantage is still 1%)? It’s simple — you can’t. Plus, Kelly didn’t address Blackjack in particular when developing his criterion. In Blackjack we double, split, double after split, etc. so we could be over- betting at times which increases our risk. So, we use a percentage of ‘Kelly’ when figuring the optimal bet for a hand. For all intents and purposes, 75% of Kelly is a good number to use.

Now, how do we figure our advantage? Well, that’s where the true count comes in. For every increase of 1 in the true count (like from 2 to 3), our advantage at most Blackjack games increases by about .5%. (I say most, because at Double Exposure or Spanish Blackjack, the value of the true count is higher.) Anyway, if we know that the house rules at our favorite casino gives them a .5% edge over the basic strategy player, it will take a true count of 1 for us to get even with them. At a true of 2, we have a .5% edge; at 3 it’s 1%, etc. up to a true of about 10 or so, depending upon the number of decks and how far down the deck(s) are dealt. It follows then, that if we have a bankroll of a certain amount, we can establish an optimum bet for each true count. I recommend that you not play Blackjack with less than a $3000 bankroll, unless you’re able to get a decent game at a table where the minimum is below $5. So, let’s figure a good betting schedule for a $3000 bankroll at a game where the house has a .5% edge ‘off the top.’

True Count Player Advantage X 75% X $3000 Actual bet
Below 0 (Disadvantage) 0 0 $5
1 0 0 0 $5
2 .5% .375 $11.25 $10
3 1.0% .750 $22.50 $20
4 1.5% 1.11 $33.30 $30
5 2.0% 1.50 $45.00 $40
6 2.5% 1.87 $56.10 $50
7 3.0% 2.25 $67.50 $60


A few explanations are due here. First, whenever the true count is at 1 or less, we’re either even or the house has the edge, at least with a game where their edge off the top is .5%. But, we have to bet something (or get up and walk away), so we go with the minimum whenever possible. As for the top bet, I’m a believer in the principle of never betting more than 2% of the bankroll on any hand, so here we’d top out at $60, but would move that up as the bankroll increased.

As you can see, this table will give you the optimum bet for any bankroll; just substitute your number for $3000.

How much can I win? That’s almost always the first question people ask whenever I bring up the subject of card counting at Blackjack. It’s not easily answered, because there are so many variables. But, if we explore the question in a hypothetical way, it will give you some insights into what you must consider before you risk a single dollar at this game.

First, can one make a living at playing Blackjack? The answer is a qualified ‘yes’. Qualified, because we all have a different idea as to what constitutes “making a living.” What’s enough for me may not be enough for you, but certainly a person could eke out some sort of existence by playing Blackjack. Don’t kid yourself; it’s not all ‘The Good Life’; it’s a tough way to make an easy living and I cannot recommend it as your sole source of income. I think, if you live near a casino-center area, that Blackjack makes a wonderful part-time job where you can set your own hours and still enjoy the game. I don’t know of any full time players who have been at it for 19 years, but I’ve been at it for that long, mostly on a part-time basis.

Okay, so maybe I’ve convinced you to go at it part-time. Now, how much can you win? Again, not easily answered, but let’s use the $3000 bankroll, combined with the betting schedule I showed you in the previous lesson, and match it with a typical 6-deck game and see what happens.

The real key to winning is playing a game with decent penetration. For example, the Casino Queen across the river from St. Louis has excellent rules, so the house has only a .33% advantage over the basic strategy player, But, of the six decks they shuffle, only three are dealt out. Thus, just as the count is getting good, boom! The cut card comes out. Consequently, this is the WORST place for a counter to play, but the BEST place for a non-counter. With a game that offers at least 75% penetration (4.5 decks of 6 dealt), you can expect to see the following counts:

True Count Advantage Frequency (per 100 Hands)
Below -1 More than -1% 18
-1 -1% 13
0 -.5% 35.5
1 0% 13
2 .5% 8
3 1.0% 4
4 1.5% 3
5 2.0% 2
6 2.5% 3.5
7 or higher 3.0%+ 1.5

It’s easy to see that at a game like this, you’d spend most of your time playing at decks in which you are even with the house, or at a disadvantage. The profitable counts represent only just over 20% of all the hands! And you wonder why I say Blackjack is boring? Almost 80% of your bets will be at the minimum. Not exactly Adrenaline City, is it?

So, here’s what you need to do:

When the count gets to a true of -1 or lower (worse), you get up and walk away from the table, unless 1) you won the last hand (a ‘gambler’ would never leave after a win and you want to look like a gambler) or 2) the shuffle card is about to come out (if you’re near the end of the shoe, it’s probably better to stay).

Remember, it’s cheaper to walk around, looking for a new shoe, than it is to play in a negative situation.

Now, back to making $$$. If you bet the minimum (for our $3000 bankroll, that’s $5) in all the -1 situations, you’ll bet 13 X 5= $65 at a 1% disadvantage and that will cost you 65 cents; a $5 bet at a true of 0 works out to 35.5 X $5 = $177.50 at a .5% disadvantage or 89 cents; the bets at a true of 1 will be even with the house, so we don’t count those for any gain or loss, but you will be betting 13 X $5 or $65; the bets at a true of 2 carry a .5% advantage and you’ll be betting $10 for a total of $80 which is a 40 cent profit…..see how this works? Just multiply the frequency times the bet at that level, times the % advantage and you can figure what your win will be. Than add up the total of all the bets, divide that into the win amount and you’ll know your advantage over the house. If it’s less than 1%, you’ve got a tough time ahead of you in earning a living at Blackjack.

Our example from above using the $5 to $60 spread I showed you in the previous lesson works out to be an expected win of $12.16 against a total bet of $827.50 for an advantage of 1.47%. The power of this betting schedule comes from getting up and walking away when the count hits -1 or lower; I can’t stress that enough.

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