Let’s Clear This Up: Misconceptions About The Nature of the Free Odds and The Probability of Winning
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Two topics are regularly brought up to me, and I’ll address them here: the free odds and probability of winning. Both issues have a significant misconceptions surrounding them. Let’s clear these issues up…
THE FREE ODDS ARE A BAD BET BECAUSE THEY WERE INVENTED TO DRAW IN GAMBLERS
It’s often pointed out that the free odds bet was an invention of the casinos that was designed to entice the players into betting the pass line bet. If that’s the case for the origin of the free odds bet, then the free odds must be a bad bet. That’s the argument.
The free odds is something called a ‘loss leader’. Many businesses use loss leaders. Just because a promotion is a loss leader doesn’t mean that the item, which is being used as the loss leader, is bad for the consumer. The way loss leaders work is that if a customer only buys the loss leader and nothing else, the business will bleed money. A good example of a loss leader is soda and bread at the supermarket that are always on sale. If customers only bought soda and bread and none of the organic and high priced goods, the business would lose money; but the bread and soda, themselves, are perfectly fine items.
Another example of a loss leader is the car that’s advertised on TV or print for an unbelievably low price. Surprise folks, there’s only usually one of that car at that amazingly low price, and it’s hidden away far in the back. It’s the loss leader and if there were enough of that loss leader, the dealership would go out of business. The point of that loss leader is to get people in the door so that are dealership can pitch the other higher priced cars.
If you want to know more about loss leaders, this article is perfect: loss leaders.
The free odds are loss leaders in the same manner. So the fact that a casino invented the free odds to get business to the craps tables doesn’t necessarily mean that free odds are bad for the players. The free odds can be bad for the player if they induce the player to make larger bets that carry higher house edges. In that sense, yes, the free odds are bad because they open the player up to being pitched other higher profit bets, such as the ‘yo’, the C&E, hardways, hop bets, etc.
But is that the fault of the free odds or is that the fault of marketing and human psychology?
When your significant other tells you to go buy a 69 cent loaf of bread and you end up coming home with high priced ice cream, candy, organic produce, exotic fruits and meats, whose is at fault for your spending habits? Can you really blame the loss leader? Actually, maybe you can.
I mean, that’s the whole point of a loss leader: so that the business can pitch or sell higher margin items.
The solution is simple: just don’t fall for the pitch and stick to the loss leader. Stay strong.
WINNING A BET IS ALL THAT MATTERS!
Second topic: winning a bet is all that matters.
This topic is brought up when it comes to the point of 4 or 10. It’s true that when the point is 4 or 10, the player (let’s assume he’s a lightside player) is twice as likely to lose than win. He only has 3 ways to win and a whopping six ways lose.
However, the probability of winning or losing doesn’t matter. Seriously, it doesn’t. In the end, it’s the return percentage that matters.
I could make a bet where the player wins 85% of the time and the casino only wins 15%, and the casino would wipe the floor with your bankroll and make you go broke. The reason? Because it’s not the probalbity of winning or losing that’s important, it’s the return percentage.
Let’s lay out an example that we’ve all seen.
A player could cover 34 numbers of 38 numbers. On 89.5% of the spins, the player will have a 1 unit win. That’s an almost 90% win rate.
However, you already know where this is going…on 4 out of 36 spins, the ball will land in a spot that is not covered, resulting in a total wipe out. Despite winning only 10.5% of the time, the casino will wind up beating the player, eventually.
The astute observer might say, ‘well, that’s because the player is only being paid 1 unit and the casino wins 34 units.’
In other words, it’s not the probability of winning that matters. What matters is the probability of winning combined with the payout for the win, i.e., the return percentage!
The same fact applies to when the point is 4 and 10. Sure the player is going to lose twice as often as he wins. He’s going to lose a whopping 2 times for every singular sad win. But…BUT…when he wins, he will win a 2 to 1 payout. Just like our roulette player, it’s not how often he wins or loses, but how often he wins and loses combined with what he is paid.
That’s why, in the end, the return percentage is what matters, not how often you win or lose.
FEEL FREE TO DISAGREE
You don’t have to agree with me. There are many ways to skin a cat, but if you have an alternative viewpoint, feel free to disagree and make your case in the comment below. Or if you agree and have questions, feel free to drop those below, also.