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

What does a loaf of white bread have in common with craps? White bread is a loss leader that’s used to get customers in the door, so that the business can pitch higher margin items.
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.

In all seriousness, wouldn’t you want this instead? It’s much nicer and fancier, with more nutrients and a better glycemic index. Oh, and it’s double wrapped for freshness. Pay no attention to the price because we all know that you can’t put a price on your health and well-being!
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.

Roulette…

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.’

Exactly!

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!

Got ’em all covered! 90% win rate, baby!
Oh no, didn’t cover that one!
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.

I’d love to hear your thoughts.

 

Posted in: Gambling

11 thoughts on “Let’s Clear This Up: Misconceptions About The Nature of the Free Odds and The Probability of Winning”

  • Seems pretty clear cut to me. Free odds are the greatest gift on God’s green, craps-lover’s earth. Because they are…

    …free.

    If they were to be allowed on the sucker bets like the hopping bets and hardways, it would not cause me to want to bet those ultra-high house edge bets any more than I do now (i.e. not at all – except for maybe a 2-way hop as a tip). But if I did get some crazy hankering to bet the hardways and if they had free odds on them, I’d max out the free odds on the hardways, hops, etc. etc. just because the free odds are there to be taken. Because free odds bets – which are regarded as separate bets and are set aside the flats as separate bets – are free of any vigorish whatsoever. If I’m given an opportunity to bet them, I will bet them IF I decide to make the underlying wager associated with them.

    If I could get a craps table with only odds bets with no vigorish (free odds), I guarantee I could walk out with a profit every day. I would simply make sure to bring a large enough bankroll, play on and on and on until the fluctuation eventually gets me up 20%, cash out and start over. If there is no vigorish eating away at my bankroll, it will fluctuate up and down between profit and loss indefinitely like the flip of a coin.

    So we have the best of both worlds. The flat bet – which is the cheapest bet in the casino at 1.4%/1.36% -, AND free odds on it. It’s a no-brainer.

    The reason odds are not offered on proposition bets is that they are already paid out so close to true odds (15 for 1 instead of 16 for one on 11, for example) that it doesn’t make much difference. But that $1 difference in payout translates to a 15% house edge on those bets because they are one-roll bets.

  • Free odds are a great bet, because they reduce the house advantage on your original pass or come bet. What doesn’t make sense to me is that I see your videos in which, when you are betting the “don’t pass” or “don’t come” line, you then make a free odds bet. Once a point is established (rather than throwing a 2, 3, 7, 11 or 12), you now have the advantage over the dealer. The advantage of the dealer is in the initial throw – the 7 or 11. Why would you reduce your advantage by making additional true odds bets? Sure, you make more if they crap out, but you lose a lot more if they make their point. Any true odds bet will reduce the advantage, whether the advantage is with the dealer or with the “don’t pass” bettor.

    • RoadGambler says:

      Jim,

      It’s true that when the point is established, the darkside player has the edge, but that’s only half the story. You can’t look at the entire bet after the point is established., rather, you have to look at the entire composite bet before any bets are made.

      By the time the point is established, a net of 5 out of 36 times, the DP/DC player will have lost his come bet (8 ways to lose, 3 ways to win).

      The reason to lay odds on the DP/DC is because the come out will shave off 1.36% of the flat darkside bet. No such shave happens on the Darkside odds.

      So given a choice between betting $25 on the DP/DC or $5 + 20 laying odds, you are better off betting the latter.

    • Not trying to be a stickler (I kind of am…), but the free odds bet does not reduce the house advantage on the original pass or come bet. It reduces the house advantage as calculated based on the combined pass line and odds bet.

      For example, if I put $5 of odds on a $5 pass line bet, the total bet is $10. The $5 pass line bet costs about 7 cents (1.4% of $5). The odds bet is free. So the total cost for the combined $10 bet (really 2 separate bets) is then 7 cents divided by $10, not $5, or 0.7 percent house advantage instead of 1.4 percent.

      The advantage is conceivably “lowered”, but it is a misconception to believe that it lowers the cost to make the pass line bet. That always remains 7 cents, regardless of how many odds are added. Believing otherwise causes people to load up on odds due to the thinking that they lower the vigorish on the flat bet. This is not the case. The odds just happen to be free.

      Exactly the same applies to the odds on the don’t pass. They are free and therefore should be taken but ONLY if the bankroll can withstand the higher fluctuation. The odds on the don’t side do not do the opposite of what is believed on the do side. They do not reduce the player’s advantage, which does not change regardless of how big the lay on the flat bet is. In fact, a $5 flat don’t pass bet costs slightly less than 7 cents. A cheaper bet in fact – regardless of how much in odds you lay against the number.

      • RoadGambler says:

        Duffer, you can be a stickler all day long.

        You are very correct, and I agree.

        The free odds does not reduce the expected loss on the flat bet. It only reduces the expected loss on the combined bet.

  • The problem with the ‘free’ odds bet is that a player may be tempted to max out more than their bankroll can handle. Just because bread is 50 cents doesn’t mean that I should load up on a dozen.

    When variance hits, the casino has ample times to ride out the storm. The player doesn’t.

    • Craps fanatic says:

      Totally agree. Return percentage is probably why the center table bets tend to be so popular, often ignoring the “how often” factor. Our brains tend to better remember the large payouts–infrequent as they may be– rather than the more frequent loses.

  • Alan Sherman says:

    I would say having control of the bets is why I do place bets rather than pass/come bets for the lightside. It’s all “fake” for sure but bringing down your bets prior to a 7 out feels good as opposed to just pulling odds and then watching all that money just disappear because there wasn’t a repeater.

    • RoadGambler says:

      Welcome, Alan.

      I completely agree. Even if it’s ‘fake’ as you say, there’s still the advantage in that taking down a bet is a form of discipline.

  • Jacob Bittner says:

    I think it’s great how the two most common thought processes on craps betting are represented here. In my opinion it’s all in how you prefer to play. I do feel like the casino is trying to get you to make the “free odds” bet but because it takes two rolls to win. But it’s still a good bet, and like all craps games, its how the dice fall.

  • One last word in support of the house. They are smart to actually recommend the most effective way to play. Because they don’t want your bankroll to be blown out; they want you coming back to the table where the casino wants you. They make their money by the hour. You win suddenly – or not at all. No one grinds out a profit from the house, they grind us…

    So Pass + odds (depending on your bankroll) and then 1 or at most 2 additional come bets + odds is really the best way to play from a cost perspective.

    Because if we play like most folks play, which is to say pass line and then the rest of the inside place bets (or even as low as just 6 and 8 with no pass line bet), the fluctuation in the bankroll is actually higher (assuming equivalent number and amount of bets). Primarily because the bets are going up right away. Because the point 7-out takes it all down and will always be the most frequent outcome. If you go one at a time, the point 7-out gets only 1, 2, maybe 3 bets.

    And statistically speaking 3 box numbers (including the come-out) followed by a 7-out constitutes nearly 50% of all possible scenarios. That’s right, 50% of the time (slightly more, actually) your bankroll is going nowhere but down. And that is when the table is 1-out, 2-out, 3-out cold. Three numbers is just not enough even for placed bets (you can win at most two). But this is the fact that makes us want to get those place bets up right away.

    Going pass+come instead of place keeps your fluctuations more within range and does not dampen the outcomes even though you have to get repeaters. Yes, bankroll increase will be higher when we place our bets but only if the bottom 50% of sequences take a vacation. On an ice cold table, the place better goes broke first.

    And there is no way around the fact that the real money is made when the 15+ number sequence comes to town (10% of the time). And that means repeaters. Just hang in there and let it happen. Hanging in there means minimizing bankroll fluctuation.

    Even the house wants you to hang in there (Steve Wynn smiling…)

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