Poker Strategy With Ed Miller: Two Gambling Fallacies
Miller Explains Why You Shouldn't Try To Lock In Wins
As much as some try to deny it, poker is a gambling game. All of poker strategy is rooted in basic gambling concepts. You gain an edge by winning your bets more frequently than the odds you are laid. If you can get 3:1 on your money, you want to win more than 1 in 4 times.
The complexity of poker can hide this underlying framework, so it’s often helpful to look at simpler gambling propositions to root out weak thinking. Because many of the strategic errors that amateur players make can be traced back to well-known gambling fallacies.
In this article I will cover two common forms of fallacious gambling thinking with examples from other forms of gambling. Then I will explain how each of these problems can creep into your poker thinking without you even noticing it.
Don’t Try To Lock In Wins
This one is everywhere. In blackjack, they offer an insurance bet. When the dealer shows an ace, it’s a bet that pays 2:1 that the dealer’s hole card is a ten-value card. This bet behaves has “insurance” since you can make it for half of your normal bet, and if the insurance bet wins the payoff compensates you exactly for your loss.
For example, if you bet $100 on the hand and the dealer shows an ace. If you take insurance, you are betting $50 to win $100 that the dealer has a ten-rank card. If the dealer doesn’t have one, you lose the $50 insurance bet but your original $100 is live. If the dealer does have one, you lose your original $100 immediately, but your $100 insurance win replaces it. Insurance.
The insurance bet is bad off the top, since four of the 13 ranks are ten-value, so the chance the dealer has a ten is approximately 4/13. Since this is less than the odds offered (2:1 or a break-even percentage of 4/12), it’s a bad bet.
Most players know this is a bad bet and usually turn it down. However, there’s one case where players often can’t resist. When they already have a blackjack.
Since blackjack (traditionally) pays 3:2, getting a blackjack wins $150 on a $100 bet. But if the dealer also has a blackjack, then instead the bet pushes. However you can choose to take insurance in this situation when the dealer has an ace up. If you bet $50 on insurance, you will win $100 for the hand ($150 minus $50) if the dealer doesn’t have a ten, and you will also win $100 if the dealer does have a ten (because the original bet pushes, but the insurance bet wins $100). This is called taking even-money on the blackjack.
This is just as bad a play as taking insurance any other time. (In fact it may be slightly worse since one of the ten-value cards is sitting in your hand and out of play.) But players love to do it because it “locks in a win.”
Sports bettors also frequently do this. They’ll bet a five-or-more team parlay, and when the first four legs hit, they bet against their fifth team to try to lock in a win. The problem is that they’re paying the vig on both bets, so taken together the pair of bets (one on a team, one against) loses money. But it’s attractive to many bettors because once you place the hedge bet, you have locked in your win.
Locking in a win is rarely free. You will usually have to pay a house edge, a vig, or some other kind of tax to lock in your win. If you just let all your good bets ride rather than hedge them, at the end of your life your gambling results will be much better—even though some of your good-looking bets end up turning into zeros.
This concept hits poker players in tournaments. The stakes in tournaments can be deceptive, because the amount of money you are theoretically playing for increases as the tournament progresses. So if you are playing a $200 entry fee event, at the beginning it may feel as if you are playing $1-$2 level stakes. But once you get to the final table and are fighting over a $20,000 first prize, it can feel more like you’re playing $100-$200.
This fact causes many players to become desperate to make a deal. They feel like they have no business playing for $100-$200 stakes, and so they want to lock in as much of their win as they can.
Negotiating from a position of desperation, however, rarely gets you the best deal. If other players are less risk-averse than you, they can slant the deal in their favor, and just like in the previous examples, you are paying a price to lock in your win.
The way to avoid this is to have some foresight and select to play tournaments where the final table money will be exciting, but not intimidating. Many tournament players do the opposite — they try to find the biggest possible first place prize they can. But you’re probably better off doing the opposite. You want a tournament you will feel comfortable playing from beginning to end. This can mean a smaller entry fee or a smaller field so the final table money isn’t so much you can’t just play for it.
Don’t Wait For A Better Price
Sports books now tend to offer live betting during events. So along with the traditional pregame bets, you can now place bets on the result after the game is underway. I will frequently hear people say something like, “Don’t bet team X before the game. Wait until the game starts and they’ll probably get behind at some point, and then bet them at a better price.”
Or, worse still, people will suggest that you try to hedge away your risk by waiting until the team you’ve bet on pregame gets a lead, and then bet the other team at a better price than you could have pregame. This tactic often gives you a middle—a pair of bets that perfectly hedge one another, but for which a small range of outcomes allow you to win both bets.
This thinking is fallacious because the price you are getting on the proposition is “better” only because the chances of winning have gone down. The reason you get a more attractive price on a losing team is because the team is already losing! Since there are so many comebacks in sports, people think it’s no big deal to bet on the team that’s behind early, but the bets are usually priced so that the price is discounted proportional to the chances of winning.
In poker, players often want to “wait for a better spot” by passing on a gamble they think is good, but risky. The thinking is that a better opportunity will come along. But there’s always a chance the better opportunity won’t come along, and you will regret your passivity.
Usually the best strategy is to take good bets as they come, and then if you see another good bet later, take that one also. ♠
Ed’s newest book, The Course: Serious Hold ‘Em Strategy For Smart Players is available now at his website edmillerpoker.com. You can also find original articles and instructional videos by Ed at the training site redchippoker.com.
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