Craps Hedging Strategy
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You’re watching the 7th episode of Craps Strategies LIVE! Today’s strategy is a triple hedge. The iron cross (hedging strategy itself), hedged with a Don’t Pass, which is hedged on the come. The truth is that craps is a negative expectation game. If you play long enough, you’ll eventually go broke. But you can get more entertainment for your money if you understand some of the basics of craps strategy. 1- Start Your Craps Career by Sticking with the Most Easily Understood Bets on the Table. Nowhere is befuddlement more, well, befuddling than concerning the question of hedging bets at craps. Spend some amount of time at the craps tables and you will see and hear a host of hedges, the most common of which are hedges that increase or decrease your chances of winning or losing on the Pass Line. Conventional wisdom states that hedge bets cause you to lose more money. If you ordinarily bet $6 on the 6 and 8, you have $12 at the mercy of a 1.52 percent house edge. Multiplying the two you are destined to lose about 18 cents on the $12. I have just returned from Vegas where I played and won $740 in about 1 1/2 hours play starting with $100. I am trying to determine if my hedging strategy was valid or just lucky? I used come bets with odds to hedge my bets on the table. I'd cover my table stakes with come bets and take odds on the come bet points.
Craps: The Parity Hedge System
This is the forgotten system that took the gambling world by storm for a few brief weeks in the early 1970s. After we first mentioned the Parity Hedge System in 1998, we have received literally thousands of e-mails requesting more information about the system, who developed it, why it never became public information, and what happened to it.
The Parity Hedge System derives in part from the Doey-Don't System immortalized in Frank Scoblete's classic book: Beat the Craps Out of the Casinos and Play Craps and Win, p. 39 (Bonus Books, 1991). You have to understand what makes that strategy successful before you can delve into the intricacies of the Parity Hedge System.
The Unofficial History of the Parity Hedge System
The originators of the Parity Hedge System were too smart to make themselves known. It is believed that they were nuclear physicists and theoretical mathematicians who were working at the Nevada Test Range, located just north of Las Vegas. During the daytime, they put their skills to the test by creating new and unusual types of hydrogen bombs and measuring their yields. In the evening, they made their way into Las Vegas where they put their statistical know-how to the test on the Blackjack and Craps tables. This was a group of very sharp young minds who had studied under such geniuses as Von Neumann and Teller, and who knew how to 'think outside the box'.
Whether they picked up the Doey-Don't from other gamblers, or they figured the system out themselves is not known. At any rate, they quickly realized the nearly risk-free arbitrage nature of the 'DD', and in their slack time at the test range began to theorize about how to improve on the Doey-Don't. Eventually, they were to develop their strategy into a situational algorithm that is much like a basic computer program. Depending on the situation, betting a certain way will either slightly improve the odds, or will negate odds that have become heavily in the house's favor.
Realizing that an overly-complex system was unworkable with a fast-paced game such as craps, these kid geniuses simplified the system into the '11 keys' that characterizes the system. They also realized that if the casinos ever figured out the Parity Hedge System, the casinos could make slight rule changes to negate the system's advantages (To jump ahead for a moment, they were wrong - even years after studying the few film tapes of people using the Parity Hedge System, the casino's mathematicians were unable to crack the system, and so no changes were ever made. But the casinos were to handle the matter differently, as we will soon relate).
Of course, the kid geniuses tried to keep the system to themselves. They wouldn't play when other experienced gamblers were around, but played only in the early morning hours while the least knowledgeable security crews were working and most of the casino personnel were focused on clearing the slot machines' take from the previous night. They made small bets, and were for awhile content to supplement their government salaries with repeated small but consistent payoffs.
But greed begets greed. As détente and the nuclear arms accords began to spell an end to many of the nuclear testing programs, some of those knowledgeable about the system began to think of ways to make a really big 'hit' on the casino.
The Parity Hedge System gives gamblers a slight edge over the casino. For small bets, this means small gains. Bigger gains requires bigger bets, and bigger bets attract more attention. And the kid geniuses did not want their system to go away. But they didn't want to retire on their government pensions, either.
Eventually, they settled on a Japanese businessman who they knew through their defense contacts. The Japanese businessman had cash and the mathematical skills necessary to run the Parity Hedge System on a big-time basis. More importantly, the Japanese businessman was already known around Las Vegas as a 'whale' who regularly dropped tens of thousands (remember, this was the mid-1970s) on a single weekend - and even better the casinos knew him as a 'hard luck' gambler. If the Japanese businessman suddenly started winning, the casinos would figure that his luck had simply changed and it would not attract attention.
So it was that on one of his many trips to Las Vegas to oversee a construction contract that the kid geniuses took the Japanese businessman aside, and over the course of a weekend had instructed him in the 'basic' Parity Hedge System.
Early on the following Monday morning, during the casino's most quiet time, the Japanese businessman made his way to the crap table, took over an end, flopped down $10,000 in cash, and started working the system. At first, the crew working the table and the boxmen thought we was nuts, playing 'offsetting' bets that seemingly couldn't win. Yet, of the course of an hour and a half, the Japanese businessman had very quietly doubled his money.
It had been decided beforehand that the Japanese businessman would spread his money around several casinos, and so he did for the remainder of the week always playing around the breakfast hour. He lost on one day only, and then by little more than $200 after an hour and a half of play. The Japanese businessman concluded his first visit up more than $15,000 - of which he split $7,500 with the kid geniuses, as well as a promise to return. Everything had gone so smoothly that the casinos hardly took notice of the Japanese businessman's suddenly improved play.
The kid geniuses continued to perfect the Parity Hedge System, sublime in the context of doing this over coffee while measuring underground atomic tests. But they awaited the Japanese businessman's return, and their big payday.
The Japanese businessman played the role well, waiting until the several casino's inevitable calls inviting him to return. He at first refused, and then acquiesced on the condition that the casinos would allow him to play craps at a very high dollar amount - placing up to $10,000 per roll. The casinos were probably overjoyed when they heard this, and assured him that if he could bankroll it, they would take his money. So, the Japanese businessman took the time to schedule another 'construction visit' to the Las Vegas area, this time wiring to each of these casinos a large sum (believed to be around $600,000 each). Thus it was that the Japanese businessman landed in Las Vegas on a Thursday, stayed holed up in his hotel room through the weekend (except for a brief visit to the Atomic Test Range), and then showed up at precisely 6:00 a.m. on Monday to start gambling.
And gamble he did. Helped by an enormous streak of 'good numbers', the Japanese businessman was up $1 million by breakfast. He then spent the day making a circuit of the other casinos, only losing once and cleaning the rest out for amounts up to $2 million. At the end of the day, by making progressively bigger bets with the casino's money that he had won, the Japanese businessman was ahead a cool $11 million.
Nothing travels fasted in Las Vegas than the news of a big winner. While each casino had 'spotters' on the Japanese businessman - more looking for ways to lure him back to their casino when his run of 'luck' finally broke - the casino bosses were meeting with their staffs to try to figure out what had happened. Keep in mind that at this juncture in Las Vegas' history, the casinos were being run mostly be ex-mobsters (and some not-so-ex-) and they simply couldn't grasp the Parity Hedge System. For his part, the Japanese businessman greeted his casino-appointed hosts cordially, and retired back to his hotel room.
Truth is, he should have taken the first plane out of town. Instead, he again appears promptly at 6:00 a.m. the next morning, per the kid geniuses' plan, and starts gambling at the highest limit (which, of course, the casinos let him do to try to get their money back). Again, the combination of his lucky streak, the Parity Hedge System, and that he was now using the large sums of casino money he had won the day before, resulted in gains of just under $10 million at each of a half-dozen casinos in town.
By this time, the casino bosses are really starting to panic. In the mid-1970s, a $10 million loss was unthinkable. Because there was still a great deal of 'skimming' going on, the casinos basically had no cash reserves. Fortunately, the Japanese businessman had deposited his winnings with the casino at the end of each day as credit for the next day.
The casino bosses still didn't understand what was happening. The first thought in their paranoid minds was that the Japanese businessman was cheating. By this time, the Japanese businessman was being watched by probably 20 or 30 people at each casino, so that was unlikely. The casino bosses simply couldn't get it through their minds that there was some system that gave the Japanese businessman a slight advantage over the house.
By the third morning, the casino bosses were in a panic. They knew that the Japanese businessman was scheduled to leave, and they knew the odds were low of winning his money back. And sure enough, at 6:00 a.m., sharp, he steps into the first casino of the day, and starts playing the system at the highest level allowed him by the house. And he is still hot.
By a little after 11:00, he's been through five casinos, and is up additional tens of millions. Thus, the Japanese businessman (in a private limo - should have been his first clue that something was amiss) started for the airport, where he had instructed each of the casinos to meet him with a certified check made to his order for the funds he had won.
He never made it to the casino and his body was never recovered. Courtesy of the gang of Tony 'The Ant' Spillotro, The Mob's local enforcer, the Japanese businessman disappeared into the Las Vegas traffic - vaporized in thin air as well as a direct hit by the kid geniuses' atomic bombs could have done. And of course, the certified checks never made it to the airport, either.
During the second and third days of the Japanese businessman's run, the casinos made movie-quality films of the Japanese businessman's play. Suspecting that the Japanese businessman had accomplices, the casinos each made note of several of the hallmarks of the Parity Hedge System (but they never really grasped the basics of the strategy).
So what of the kid geniuses? To say that they were scared to death is an understatement. Yes, they had nuclear weapons, but they weren't of much practical use. One of the kid geniuses knew Benny Binion, the rough and tumble founder of the legendary Binion's casinos. Whether or not the Japanese businessman visited Binion's is not known. Certainly, Binion - and the casino owners who weren't visited by the Japanese businessman - were as at risk to being tapped by future Parity Hedge System players as the casinos that had suffered the (now disappeared) losses.
What seems to have happened is that Benny Binion agreed, on behalf of the casino owners and doubtless The Mob, to have accepted a complete analysis and breakdown of the Parity Hedge System (and a promise not to use it anymore) in exchange for protection. Truth is, only Binion was smart enough to understand the importance of getting the breakdown on the Parity Hedge System, and was capable of bringing the casino owners and The Mob together to cut the deal. Instead of further broadcasting the existence of the system by bringing in people to analyze it (the only people who would have the mathematical training and intellect to understand it could also run the system, of course), Binion apparently just hid the system in his home vault along with the last remaining film canisters of the Japanese businessman's fateful three days.
The Parity Hedge System was apparently safe with Benny Binion through his death in the early 1990s, then it was inherited by Binion's son, Ted Binion. By this time, the Parity Hedge System and the Japanese businessman had been long forgotten, and the canisters relating to the Parity Hedge System had been moved out of Benny Binion's vault and into Ted Binion's closet. The Parity Hedge System itself was cached in the desert, along with some millions in silver that Ted Binion kept for emergencies.
At some point, Binion's new (former stripper) wife and her boyfriend were apparently rummaging through Binion's stuff and came across the film canisters. Watching the play, along with some narrative by a gaming analyst, they realized the important of the Parity Hedge System. Rumor has it that Ted Binion's stripper wife and her boyfriend then waylaid Binion and force-fed him heroin in an attempt to make him reveal the whereabouts of the analysis and summary done by the kid geniuses. But before the now-widow and her boyfriend could get to the spot in the desert, they were arrested for Ted Binion's murder.
So where is the Parity Hedge System now?
It is unknown where the analysis and the summary that the kid geniuses did for old man Binion have gone. What we do know is this: The group of mathematicians and physicists (probably numbering less than a half dozen) whom we have referred to as the 'kid geniuses' knew about the system that they created. We also know there were a few people who worked for the casino's during the Japanese businessman's remarkable run that saw the system employed. There may have been other films made other than those that Benny Binion ended up with. And we have no idea what the Japanese businessman did to memorialize his rather amply-demonstrated knowledge of the complexities of the system.
Pages Describing the Parity Hedge System
The following pages detail the Parity Hedge System. Enjoy!
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22 members have voted
I've been following the Wizard's site for a couple months now trying to learn about craps. In my opinion, he does a great job explaining why the Dark Side is statistically the better option. I've even watched his video on YouTube about how he suggests betting DP / DC with 6X Odds backing each bet. I can understand, generally, why you would want to milk these odds for all they're worth and have spent hours practicing on the WoO's craps simulator and on my cell phone's craps app (also Bovada's, but they don't seem to allow 6X Odds for some reason). Using the Wizard's method, I am usually able to double my money pretty consistently and have had a lot of fun with it to the point where I consider myself a true Darksider. :)
If you'd rather not read through this whole post and just cut to the chase, I've listed several possible betting strategies in the poll above and would like some feedback on which you think are more effective.
My question, however, is in regards to an answer the Wizard gave on his section on craps:
Let’s say you have a $10 don’t pass bet and the point is a 4. You have a 2/3 chance of winning the bet, so the expected value is (2/3)*$10 + (1/3)*-$10 =$ 10/3 = $3.33. Now consider adding a $40 odds bet on top of it. Now you have a 2/3 chance of winning $30 and a 1/3 chance of losing $50. The expected value of both bets combined is (2/3)*$30 + (1/3)*-$50 = $10/3 = $3.33. So either way your expected gain is 3 dollars and 33 cents. With the don’t pass alone the player edge is $3.33/$10 = 33.33%. With the don’t pass and odds the player edge is $3.33/$50 = 6.67%. So, yes, the player edge as a percentage drops by making the odds bet. However that player edge is effective over more money. The way I think gamblers should view the house edge is as the price to pay for entertainment. If you want to pay as little as possible then taking or laying the odds is getting entertainment for free.
If I am understanding this correctly, the expected payout of a Dark Side player is $3.33 per bet, regardless of whether you take odds or not, and that the Wizard only recommends taking odds because you effectively see more action for the same price.
So far, I've found 100-units worth of bankroll to be quite comfortable in dealing with any hot streaks; though I imagine that when I go to the tables, I will likely only have 20- to 40-units of bankroll, so I have been practicing with that as well. Thus, I have been trying to push the limits of Dark Side betting to see what the minimum I need to take with me is, while still feeling comfortable.
Assuming the above is true regarding $3.33 gain per roll regardless of whether you take odds or not, it would seem that I can get the same effect by just playing DP / DC without odds and not break my bank. Is my thinking correct? It'd help to know the odds to see how much luck has affected my practice runs.This also got me thinking on some other Darksider strategies and what the best Darksider system might be, for high or low bankroll. One appealing system I saw on www.crapsforum.com was to bet one unit on Pass and one on DP to effectively nullify the effect of the come out roll, losing one unit every 36 rolls, on average, due to the 12 Bar. Once the point is made, however, the odds are in the favor of the DP and so you lay odds. This gets more convoluted for balancing the DC, so for now I've chosen to just stick with those two. But the overall idea is in hedging your bets, while still capitalizing on the DP's advantage using odds after the point is made. The reward is less, but so is the risk, it seems.
Here, I have tried laying 6X Odds - as the Wizard suggests - on the DP, but I found that this requires a much heftier bankroll and have started playing instead with 2X Odds on the 6,8; 4X Odds on the 5,9; and 6X Odds on the 4,10. This is a lot kinder to my bankroll, but I am wondering which set of odds in this case has the better, well ... odds, as well as the better payout. Also, how these two methods stack up against the DP / DC and DP / DC with Odds methods.
So just to recap, some things I'm trying to focus on:
- Darksider betting.
- Odds vs. no Odds.
- Neutralizing the Come Out.
- Accounting for small bankroll.
- Minimizing House Edge.
- Maximizing return on investment.
Any feedback on this would be great. Thanks in advance. :)
My question, however, is in regards to an answer the Wizard gave on his section on craps:
If I am understanding this correctly, the expected payout of a Dark Side player is $3.33 per bet, regardless of whether you take odds or not, and that the Wizard only recommends taking odds because you effectively see more action for the same price.
He was comparing a dont4 ONCE it made it to the number4 to the same bets WITH Lay Odds.
This was to show that the EV of laying the odds does not change compared to not laying the odds. Duh.
$3.33 is just for a dont4 or 10 after it is on the number.
Do the math to see what it is BEFORE it gets to the number.
Hint: 8 ways to lose $X and 3 ways to win $X
Also your Doey/Don't system is just that, another system.
It has been discussed here (WoV) in other threads.
IMO, Not much good actually comes out of the www.crapsforum.com unless you are an upcoming DI believer
Read on, especially posts by goatcabin.
Your Bankroll is very important to how much fun you will have playing Craps.
If you are always buying in for $100-$200 and making bets between $25 to $50 each roll, enjoy your short stay at the tables.
Others will chip in
Good Luck!
My experience has been that 40-units no odds works because, essentially, I am making a $25 bet versus a $70 bet ($10 + 6X Odds). Thus, my game is about three times as long, with the House Edge only being marginally higher (due to less payout).
This brings me to another question: If bankroll is an issue, is it better to take the odds and wager 7 units a roll (bet plus 6X Odds), or to skip the odds and place a larger flat bet that is less than those 7 units? I'm not really a statistician, but could someone tell me at what point those two would be equal? As in, how high would the no odds bet have to be in order to match the payout of the full odds bet. Is this even possible?
Also, I'm not looking for DI. I feel that the odds of it having any effect when I need it would not really be worth the years of practice and that my skill points would be better spent elsewhere. :/
If I am understanding this correctly, the expected payout of a Dark Side player is $3.33 per bet, regardless of whether you take odds or not, and that the Wizard only recommends taking odds because you effectively see more action for the same price.
...sort of. The expected loss of a Dark Side player is 27/1925 your bet per round (not counting twelves), regardless of whether you take odds or not, and he recommends it because you see more action for the same price.
Honestly, you're going to get a lot of flak for the doey-don't, but think of it as a cheaper lay bet. It's probably good for your bankroll due to the fact that you'll win significantly more rounds than you'll lose. One thing you might want to consider instead is laying the 4 and/or 10, but only if commission is paid on a win only.
'Return on investment' sets up a bit of a red flag, though, because you should realize that the return on your investment is negative.
Read on, especially posts by goatcabin.
Haven't seen goatcabin on any forum in quite awhile.
- Darksider betting.
- Odds vs. no Odds.
- Neutralizing the Come Out.
- Accounting for small bankroll.
- Minimizing House Edge.
- Maximizing return on investment.
Dark Side betting is but a smidgen different than Right Side betting. Slightly better chance of winning, slightly higher bankroll requirement to do it correctly.
Odds versus No Odds-- That's simple. Always have an odds bet down if you are going to win and never have an odds bet down if you are going to lose. What? You don't know in advance? Well, that is the whole point. They offer and odds bet at zero house edge. Not an offer a casino usually makes. Its to induce you to effectively increase your wager. Your choice. Plain and simple.
Neutralizing the come out-- Ain't no way to 'neutralize' the roll of the dice, you mean to dilute its effect by committing the unpardonable sin of hedging your bets.
Minimizing House Edge. The house edge is what it is. It ain't gonna be getting maximized or minimized. It simply is.
Maximizing return on Investment-- That's an easy one. Thirty five dollars to the cocktail waitress and twenty minutes in the shadowy recesses of the beverage alcove where the surveillance cameras won't film her activities with you.
Since it sounds like you have never played craps in a casino, let me set some expectations for you. Since you have been playing the simulators, I would hope you are already aware that your expected loss, is not going to be close to your actual loss. Depending on your bet levels, your expected loss for a couple of hours play could be in the $20-$40 range. In reality, you could lose $200 in the first 30 minutes.
The important thing is to realize you will probably lose, and possibly lose more than the math expects you to lose.
Once you have that realization, then you are ready to play. And this site is great at explaining why making the best bets is important. But, in the end, your session result is 100% going to be reliant on the numbers that get thrown during your time of play. I have been on tables where the Right side players were losing our butts, yet the Darkside player standing next to me was getting killed too! (Those come out 7 and 11s were chewing up their DP progressions). I have lost $400 playing perfect PL and Come bets, while the dummy next to me bet the Horn High Aces every throw (~16.7% house edge) and walked away up $400.
Craps is a great game. However, besides the relatively low house edge, the other great aspect about craps is the social interaction in the game. When you are the shooter and make your point, and everyone on the table is cheering you, or fist bumping, or high fiving, that adds to the rush. This is not something that you will get from the simulators. As a darksider, you will not get to experience that same type of camaraderie, unless you happen to get a table of all Dont players.
As a Don't player, you may be treated nicely by the player next to you, or you may draw absolute scorn and snide remarks. I have seen it all, from Don't players readily accepted at a table, to tables that were openly hostile to a Don't player.
Obviously, this makes no difference to the math of your bets, but it could have a real impact on whether or not you enjoy your first craps experience.
I will admit I am biased toward Right side play. I will play the Don't at times when nothing is working for me, but even when I am winning money that way, I don't really enjoy my playing time. I have even been on tables where 100% of us were playing the Dark side, so we were all cheering the 7 outs, but it still wasn't fun.
You can explain to the Right way player next to you why your betting the Dark side is a superior way to play according to the math, but chances are the player will have no clue what you are talking about.
I could go on for another two pages, but I won't. Whether you play Right or Dark is up to you, and either way is a good way to go. Just be aware that the social aspect of craps is going to come into play at the casino (unless you play on one of the bubble games, or the e- Craps games that have betting monitors). In my opinion, the social part of the game is going to have way more bearing on your 'fun factor' than whether you win or lose money.
Craps Hedging Strategy
Best of luck to you at the tables!
Neutralizing the come out-- Ain't no way to 'neutralize' the roll of the dice, you mean to dilute its effect by committing the unpardonable sin of hedging your bets.
Yes, that is what I meant. Of course you can't completely neutralize it because the 12 loses on Pass but doesn't win on Don't Pass.
Minimizing House Edge. The house edge is what it is. It ain't gonna be getting maximized or minimized. It simply is.
Again, correct. I guess I just seem to be mixing up some lingo. What I meant was playing a strategy that would result in the lowest house edge, which you already noted was Laying Odds.
Maximizing return on Investment-- That's an easy one. Thirty five dollars to the cocktail waitress and twenty minutes in the shadowy recesses of the beverage alcove where the surveillance cameras won't film her activities with you.
Lol! I shall have to try this strategy too. ;)
Craps Hedging Strategy Rules
Since it sounds like you have never played craps in a casino, let me set some expectations for you. Since you have been playing the simulators, I would hope you are already aware that your expected loss, is not going to be close to your actual loss. Depending on your bet levels, your expected loss for a couple of hours play could be in the $20-$40 range. In reality, you could lose $200 in the first 30 minutes.
The important thing is to realize you will probably lose, and possibly lose more than the math expects you to lose.
Oh, not to worry. I'm well aware of that. I've had sessions where the dice were on fire and I couldn't catch a 7 until after losing about $300. I've had other sessions where I would lose about $150, break even, lose $150, break even, for a while. I've had sessions where $1000 went to ruin. Some where $2000 went to ruin!
But these are all reasons I am trying to practice and develop a strategy that gets the odds as well in my favor as I can for the conditions I face. Hence, the whole reason I'm here. :)
Also, thanks for the advice on the social aspect of craps. Much appreciated.
Craps Hedging Strategy Examples
This is hard to grasp, but the only way the whole business of free odds makes sense is if the total amount of money bet is the same. In other words, what sense does it make to lower the HE if you are not also lowering the expected loss for the session? Since you can't lower the expected loss with the free odds on a particular single bet, that means you must have fewer total bets using the odds OR you have simply decided to be someone who bets a lot more money whenever he gambles. A guy who hints he is uncomfortable with the needed bankroll is a guy who is doing the latter and it isn't the right thing for him.Craps Hedging Strategy Strategies
That statement, 'the free odds do not help you make more money', is a little irritating in that it needs explanation, and is a sort of slap in the face for all of us who take free odds [me too], does however succinctly state something you might as well attempt to grasp.Craps Hedging Strategy For Dummies
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