Topic: Small negative house edge - page 3. (Read 6066 times)

Yes, I had read your post and was going to reply to it, just wanted to first hear your reply to mine. I think, it is no use playing small amounts if you have time limits set or house edge incremented if you use a bot or otherwise try to increase your betting speed.


But if the house bankroll by far exceeds that of the userbase, time limits set and max bets canceled, it follows that the house may win in the end with the house edge reversed, right?

If the players have a huge bankroll, say infinite, then yes, theoretically there will be a time when you win enough times in a row to bankrupt the hosue. That said, that's why casinos have a max bet. In this case, the max bet works for the casino.

If you read my post directly above yours, you'll understand the winning strategy for games where you have the edge. Essentially, that's what the casino is doing; playing a very small amount every single game in order to win by a large number of games. Because the casino has a much larger bankroll than I, they can have a larger max bet. That's all it is.

With the edge reversed, then the strategy is reversed, and you can essentially use the casino's strategy against them, and become the house yourself, in a sense.

With the edge reversed, then the strategy is reversed, and you can essentially use the casino's strategy against them, and become the house yourself, in a sense.

Really like the originality behind this idea.  I think it is a good idea in theory and might work if the site could attract the exact same player population as normal dice sites.  However IMHO, the negative house edge will eventually attract a whale with a large enough bankroll that will beat the house.  The type of whale that would not normally be interested in -EV bets.

Brings up a good point though that a site with 0% house edge could be profitable (could also possibly use ad revenue or another revenue stream that players would accept due to the 0% edge).

You answered the post which was a reply to my post, but didn't reply to what I had asked. That is, could the house lose in the end if the aggregate bankroll of all players would be greater than the bankroll of the house by a good margin?

It seems to me that your assumption (casino as a player) should work against the house in this case...

Then let me ask you this: What's the difference between a casino and a player?

*First, I want to point out that we're under the assumption that the casino MUST accept bets under the max bet, since if a casino can just consolidate their winnings and stop running the casino, we can't talk about what will happen in the long run. So with that established*

1. There is a max bet limiting the amount a player can bet each round.

But can't we say that the max bet is also the maximum amount the casino can bet against the player each round?

2. You say all players play until they lose. This is simply not true. There will be players who don't do that.

However, as we established, the casino MUST accept the bets, so in effect, as long as there are people willing to play against the casino, then the casino HAS to play until it loses.

You're looking at the casino as if they were some godly entity, but really, they are just a player on the other side, a player who has a pretty big bankroll, nothing else.

On a case-by-case basis, all players play till they lose (That is my assumption).

Yep, I think what he said is wrong. I specifically mentioned max bet too. What is the significance of taking aggreegate of the player's bankroll? It is irreelant, unless the max bet is not there, which is not practically possible.
On a case-by-case basis, all players play till they lose (That is my assumption).

But if the aggregate bankroll of all players is significantly greater than that of the house, doesn't it imply that the house may lose even if the house edge is positive (say, 0.5%)? What are the chances for this to happen, depending on the total players bankroll vs bankroll of the house?

That's the key assumption you're making here, right? For example, if bankroll of player > house, then you will also agree that the house will lose, even if the player wants to keep playing, right?

You are talking theory.. (everyone knows that part if you have been in the gambling threads for a good time)

I am talking psychology. Many want quick profits, like to take risks. My theory is they will go on playing till they lose.
Suppose I start a site with -0.1% edge, you make a profit, you will most likely play again. You lose, you think EV is positive and still play again. IT goes on till you lose and have nothing to continue bet. (assuming bankroll of player < house and there is a max bet limit, as I said)

I'm going to respond to this specific post - but anyone claiming that the users will lose in the long term with them having an "edge" against the house (assuming they are fair) doesn't understand basic probability.

First off, what is the long run?

When people refer to the long run - they might think 1 million events is long, maybe even 1 billion. Not so, long run means literally the largest number you could ever possibly think of (and yet still bigger than that) - better to think of it as infinity. Now the Law of Large Numbers - which has been proven both mathematically, logically and through modelling - means that as you approach an infinite number of events their outcomes will converge to statistical expectation.

Now, as a player in reality cannot play to infinite games - they will face a degree of variance. Variance is what causes random streaks of wins and losses - not random voodoo skill. This variance should decline as they play more and more games - eventually with enough games (enough being effectively infinity) they should come out ahead if they have a positive EV.

Hence, theoretically across a large number of events - an operator who offers +EV for their userbase can expect to lose money over time - although they could be extremely lucky and make a profit due to variance. But this variance WILL DECREASE, meaning with enough events the users can expect to profit.

This is the basis of why no casino/gambling site will ever offer +EV to users permanently (possibly short term to entice customers or they're rigged).

Having a time limit and no auto-betting will take away a lot more customers than having a small "negative" house edge would bring in. And of course, both would cause the casino to lose a lot of money. Horrible idea.

You seem to not have read the whole thread. We are talking about a small negative house edge. And small here means small as compared to a house edge we see at dice sites in the "wild" (in absolute terms of course). I have mentioned a few times already that I mean an edge in the range of 0.05-0.1% negative. Should I actually have written tiny instead of small?

And how are you going to easily spam 10000 bets if there is no auto-betting but time limits are set?

  ..said casino owner..  

On customers side to some extent it is fun, but gambling is very addictive! Therefore is one of the largest businesses in the world!

  ..said casino owner.. 

On customers side to some extent it is fun, but gambling is very addictive! Therefore is one of the largest businesses in the world!

What you don't understand is:

Gambling is for fun, not making money.

Get that in your head.