When Even Money is Not an Even Proposition
By Al O’Grady
Here is a scenario that will eventually present itself to all blackjack players over the course of time. You are dealt a blackjack but the dealer’s up card is also an ace. The dealer offers insurance to all players.
What do you do? You can take the insurance but this is an even-money proposition. Let’s keep the math simple and assume you are betting $10. An insurance bet will cost you one half of your original wager and will get you 2:1. So in this example, the insurance bet would cost you $5. If the dealer has a blackjack, the $5 insurance bet would get you $10 and your original wager would “push.” Net result, you win $10.
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If you take the $5 insurance bet and the dealer does not have blackjack, you lose the $5 insurance bet but your original wager is paid 3:2. So you would win $15 on your original bet but you lose the $5 insurance bet.
So again, your net result is that you win $10. This is an even-money proposition, so to keep things simple and to make the game go a little faster and more efficiently, the casino will allow you to just ask the dealer for even money. The dealer pays your original wager even money and the game goes on.
But is the even-money bet truly an even money offer? There is another option. You can forego the even-money offer and hope the dealer does not have blackjack. In that case, you would get 3:2 on your
original wager. In this example you would win $15, but the downside is that if the dealer does have a Blackjack, you original wager is a “push” and you get nothing, but you also lose nothing as well. Which option is better? Should you take even money or go for the 3:2 option?
I am going to give you the stereotypical, political, wishy-washy answer. It depends. Before I give you my thoughts what the player should do, let’s look at it from the casino’s perspective.
The house edge Let’s face it. A casino is a business. It not only exists to make a profit, it will also do everything it can to maximize profit. Anytime a casino offers a bet of any kind, at any game, at any table, the casino has an edge. Trust me, the casino has done the math on everything. If it did not have an edge, it would not offer it, end of story.
This is one reason some players do not take even money. They have a contrarian viewpoint of the offer. They feel if the casino offers it, by definition it is at the detriment of the player, so they do not take it. This rationale does have some merit. However, I digress.
I will look at it from the player’s perspective shortly, but it is important to understand where the casino is coming from. Look at the chart (right). Let’s assume for a moment that the deck is perfectly balanced, meaning there is an equal chance that the dealer could have any card to go with their ace. There is an equal chance that he could have ace-three vs. ace-seven vs. ace-queen.
Let’s also assume for simplicity that the player is making a $10 bet. Finally for Chart 1, let’s assume that the player takes even money all of the time. The chart shows how much the player wins in all cases.
This is a theoretical scenario. How often will you have a perfectly balanced shoe where there is an equal chance for each card to appear? Does that really happen? Obviously there are times when the deck will have a higher concentration of 10s and vice versa.
However …
But the pendulum swings both ways and if you dealt an infinite number of hands, the law of large numbers would work itself out and you would have an equal one-in-13 chance of each possibility occurring. You can see in Chart 1 that, for every 13 scenarios, the That may not sound like a lot but when you take into account that Vegas casinos offer blackjack 24/7, 365 days a year, that can add up substantially for the house.
For the math geeks, you do not even have to have a perfectly balanced shoe for these scenarios. You would only need a shoe having a 9:4 ratio of non-ten value cards (ace – nine) to 10 value cards (ten, jack, queen, king) for the same result to appear. Naturally, there will be times when the shoe will have a higher concentration of tens compared to non-tens, but the pendulum (again) swings both ways and the opposite will also be true. The law of large numbers will work itself out over time and casinos will see that 9:4 ratio and will realize a greater profit by offering even money.
Since the house can make a higher profit offering even money, it might seem obvious to do the opposite and play for the 3:2 win. Again, I get back to my stereotypical, political, wishy-washy answer. It depends. Remember, casinos operate 24-7, 365 days a year. Casinos encounter this situation constantly.
How often do you play blackjack? Once a week?
Once a month? Once every three months or less?
The bottom line is this: The casino has the law of large numbers working in its favor, you do not. You simply do not play long enough to see this net result materialize.
On average, you will get a blackjack every 21 hands. If you are playing 80 hands per hour (this number fluctuates with the number of players at the table), you could be getting four blackjacks per hour. Assuming a balanced shoe, you will have a blackjack against a dealer’s ace four out of 13 times or a little less than one in three. That means you will have a blackjack against a dealer’s ace maybe once an hour. You simply do not have the law of large numbers working for you like the casino does.
Having said all of that, should I take even money?
You have to ask yourself, what is your goal? Do you like a sure thing or do you like the action? Do you love the benefits of playing the long game and do you want the opportunity to squeeze every penny from the casino over your lifetime? It comes down to your goals and your risk preferences.
If you are a card counter and there is a low concentration of tens, you will opt for the 3:2. If you are more conservative, and you have a $500 goal and you are up $475 at a $25 table, take the even money.
In the end, know yourself, know the risks and know the rewards and enjoy the ride – and don’t forget to tip the dealer.
Al O’Grady has been a blackjack dealer for over seven years. He is a freelance writer with an Economics degree and is currently pursuing a degree in Mathematics.
There are also a lot of roulette betting strategies as well as the various casino bonuses but they are for another edition of Casino Life Magazine.
