Why do casinos make money? Well yes, very often the odds are stack in their favor. But there is a more crucial factor, casinos do not run out of money as you do, or do not bail when their bank goes low.

At some point, you will stop playing. If you were lucky and won a lot of money, you may decide to call it a night. But very often, you will stop because you ran out of money or are so low that you figure you should stop before losing everything.

If your account was limitless and that you could manage to get odds that favor you, then casinos would go bankrupt.

In Money Management you concentrate on odds and stakes. The idea is to imitate the casino in having allot more money then what you are risking, so that you can regain you losses and keep a steady and slow increment in your bankroll.

A constant amongst efficient strategies are that you must have a large fund in comparison to your standard bet, and that your system allows you to regain your losses.

The only true systems in our opinions are the Martingale and the systems that derive from that principle.

One thing to remember is that a money management system is not a certitude and that in the end, it cannot defy the odds but only assure that the casino does not win because it ran you out of money.

Here are the typical Money Management Betting Systems:

The Martingale
The MII and Slowed Martingale

5 highly vehiculated false "systems" to be avoided

The D'Alembert
The Contra D'Alembert
The Oscar's Grind
The Progressive Betting System - 2 Level
The Progressive Betting System - 5 Level

The Martingale (Top)
This one of the most basic and more widely spread money management system. Unfortunately it can rarely be used in Black Jack anymore, however it is still worth exploring since it best illustrates the idea behind money management.

It works like this:
You double your stake, when you lose, and start all over again, when you win. Quite simple actually. This means that you will be ensured a profit, when you win.
Let's make an example: (odds 3) (betting on sports)

You bet 100$ on a home victory at odds 3, but you lose. Next time, you bet 200$ on another game at odds 3. Here you win, meaning a profit of 200$x3-200$-100$=300$. If you had lost, you should have increased the stake to 400$, then 800$ etc. No matter when you win, you will win back what you have lost plus a lot more in profit.

As can be seen from the graph below, having strong monetary backup is crucial. Most sources agree that in Black Jack, when using basic strategy, the odds stacked against you are of 50.25% This means that 11 consecutive losses will happen once every 2047 hands you play. If this is an acceptable risk to you, it means that you will need 2047 times your standard bet as funds ready to back up a loosing streak.

* Row 1 being the first hand after a loss (or a second consecutive loss)

The main problem is that the stakes grow very big very fast, when losing several times in a row, i.e. you need a very large betting fund or "bankroll". Another problem is the fact that the bookies and casinos operate with maximum bet limits.

To put a stop on the use of this very simple system, casinos instated minimums and limits on black jack and roulette tables and therefore, unless you can find a black jack table with a very wide limit range, you will not be able to apply this system.

Originally Martingale was used on Red/Black when playing Roulette (odds 2.00). This means that the risk is minimized, but also that the profit at each progression end will be only the starting-stake.

A Martingale II Variation (Top)
It is easy to see how the Martingale grows faster and faster as you keep loosing and why you require so much money to support yourself through loosing streaks.

The main problem with the Martingale is that it seeks to earn you money even when you are loosing. Though not a bad idea, this is unnecessary and greatly affects the amount you need as back up.

The MII only seeks to make you make money on the second hand after a loss.

The MII simply seeks to have you regain the money lost without attempting to gain money even when you loose. You only double after the first loss, and after that you simply bet the amount that you have lost so far.

This means that the first win after a loosing streak of more then 2 losses will not earn you anything but only cover what you have lost so far. This is based on the fact that long loosing streaks are statistically less probable and therefore on the second hand you bet 10 rather then only 5. All subsequent hands, you will bet the total that you have lost so far, which comes down to doubling.

Making money when you loose is the catch phrase that draws people to the Martingale, but the essential here is not to make money when you loose, but to be able to afford a loosing streak.

Compare the progression between the 2 systems from the graph below, on a 50% risk. The total amount needed for the Martingale is 10,235 while the MII is only 6680.

The second Graph above shows you a slowed down version of the Martingale. This one has absolutely no doubling. The total amount of money needed to support this is 5115 or 5120 if counting the very first loss.

The last graph shows you, for 66% odds against you, what amount of money will be needed to cover the arbitrarily set safety of a once in 2000 hands loosing steaks.

Only at the 17 turn (18th loss) do you approach this barrier. The amount of money necessary to cover this loosing streak would be in the sum of 655,360$. The Martingale systems is often boasted as capable of beating any odds however a Black Jack player can easily play 500 hands in a night, so the importance of enduring the test of time and therefore making sure that you have enough money to support big losses is crucial.

This sums up the Martingale. And though not applicable to Black Jack unless you are playing on a limitless table, the Martingale is very much the Money Management 101 system to learn, in order to understand the principle behind Money Management.

(Top)

D'Alembert (Top)
Also known as The Pyramid. Another Casino Roulette Strategy, not as famous as Martingale though. In the original version, you increase the stake by 1 unit when you lose, and drop it by 1, when you win. Could look like this:

The odds in the example is 2 (red/black from roulette).

In betting, it might be a good idea to use higher odds like 3 or 4. If you want to minimize risk, you can start all over on the starting stake, if you have a profit when you win (instead of just dropping the stake by 1). Follow this example: (odds 4)

To minimize risk, simply start all over again, when you win, instead of just dropping the stake by 1.

D'Alembert is a widely used strategy, and to begin with it is very likely to yield a profit. In the long run, however, the bottom line usually shows a loss.

This strategy is not actually based on any principle, you may just as well bet anything you want randomly.

Contra D'Alembert (Top)
The same idea as D'Alembert, but here you increase the stake if you win, and drop it if you lose.

Example (odds 2):

You might be telling yourself both system can't work! Well you would be right. So which one works and which one doesn't?

The answer is neither.

Basically the only thing these 2 system do is make you spend more then you probably would normally. This system will come out on top in win/lose/win/lose situation. Where has the normal D'Alembert will be good in streaks of win and lose.

Either way, this is not a system but a ritual. If it makes you feel better to believe your approach works then I guess you can try this and believe it will come through for you.

Oscar's Grind (Top)
The originator, only known as Oscar, told reporters that he gambled a lot and had never had a losing trip. Want to know why? Then read on!

Converted from Roulette black/red into betting, meaning odds 2.00.

The goal is to win one unit at the end of each progression and, whatever larger bet might be dictated by the other betting rules, will be dropped to a bet just large enough to gain one unit. This rule overrides.
Bet 1 is one unit.
If Bet 1 is lost, Bet 2 is one unit.
After a loss, the bet is the same as the bet just lost.
After a win, the bet is one more than the bet just won.

Example

- First four bets are lost, and player is down 4 units.
- Next bet is once again 1 unit, according to Rule 3.
- Next bet is 2 units (after a win), according to Rule 4.
- Next bet is 3 units (after a win), according to Rule 4.
- Next bet is 1 unit, according to Rule 4, overriding Rule 1, which would say 4 units.

This system, on top of not working, is so complex that you will not have time to count cards and may make mistakes in your basic strategy.

Once again, this is not the magical formula it claims to be.

Progressive Betting System - Level 2 (Do not use this) (Top)
This kind of "system" is what makes losers seem like winners. We recommend avoiding these types of so called "systems". We explain these systems so that you can understand why they are useless and that you avoid them.

To use this system simply decide on a minimum and maximum bet. Then bet the smaller amount after a loss and the larger amount after a win. For example, say you set your minimum bet at $5 and your maximum at $15. Start with a $5 dollar bet. If you win that hand you bet $15 your next wager. You then continue to bet $15 until you lose. After any loss you return to your minimum bet of $5.

Example

This entire system bases itself on the false idea that winning and losing streaks will happen and fails to anticipate that in every single hand, you have 50% chances of winning or loosing.

You may just as well alternate between the $5 and $15 bets back and forth and get the same result. A "win, lose, win, lose win, lose" situation with this approach will put you in the hole faster then you can say "Damn this Progressive Betting System!".

Progressive Betting System - Level 5 (Do not use this) (Top)
Another superstition baptized system by people who believe that lining-up lighters on a table will bring luck there way.

Again this is based on the false concept of winning and losing streaks. This is based on a 1,2,3,5 back to 1 progression.

Example: For a $5 player, the betting levels would be $5,10,15, and 25. With this system you start with your $5 bet and progress to the next level when you win a hand. If you lose a hand you drop back down to your original $5 wager. If you win four hands in a row you should then drop back down to your original $5 wager, hence the 1,2,3,5 back to 1 progression.

This approach to managing money almost seems as though it was spawned from a casino owner seeking to make you lose your money.

Example

You can easily sum it up by saying:
"When you win, risk it all until you lose, when you have won allot and fell you are bound to lose, go back to a small wager. When you've lost everything you've earned, go back to a small wager."
-If I bet 5 and win I have my 5 and a five dollar profit.
-I bet it all, my entire 10, profit and investment alike.
-If I win, I have a 15 dollar profit and my original 5.
-I keep my $5 investment and bet my entire $15 profit.
-If I win I have my original $5 and a $30 profit.
- I put 5$ of the profit aside and bet the rest of my profit.

This is aimed at making you bet more then you were originally willing to bet. The idea is not to accumulate profit but to use the profit to fuel bigger wagers.

A Proven Roulette Strategy

Want to risk relatively little money on a chance to cash in big?

How does a 35 to 1 payoff sound to you? This strategy uses straight-up inside bets that payoff at 35 to 1 if your number is rolled. Most Internet casinos offer $1 chips and $5 minimum inside bets and this is a good place to start.

First, choose five favorite numbers. Place a $1 chip on each of them. Repeat that same bet until you win. (you have enough chips for 8 rolls). When you hit, you'll win 35 chips.

Now, divide those 35 chips over your five numbers, seven on each number. If you hit again, the payoff will be 35 x 7 = $245!

At this point, you can do one of two things:

1. You could quit, take the money and run.
2. Or you could put 20 chips on each of your five numbers. This bet will cost you $100 but you could collect $700 if one number hits. If it doesn't hit, you still have $145 in your pocket from the previous bet. It all depends on how lucky you're feeling!

(Top)

NEXT - P.S. Glossary >>