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Casino Bankroll Management
Bankroll
management is a very important topic for gamblers,
because the #1 goal in gambling is to avoid going
broke. By taking proper care of your bankroll, you
can make your money last as long as you need it to.
This article is going to discuss the concept of bankroll management, and will also provide advice for new gamblers who are looking to stretch their money as far as it can go.
Remember that you can never guarantee a 0% risk of ruin (the chance of going broke), but by using proper bankroll management you can reduce your risk of ruin to a very low percentage that will make you more comfortable in the casino.
What is Bankroll Management?
Bankroll management is the science of maintaining a bankroll while wagering it at the casino. Since almost all casino games have a slight house edge as well as short term variance, you need to account for gradual, long term losses as well as short term, huge losing streaks.
The goal of bankroll management is to make your money last as long as you need it to. For example, if you were taking a four-day trip to Las Vegas, your goal would be to make your money last through the trip, and to hopefully come home with something in your pocket.
Casual players can simply estimate how much they will lose by using the easy formula below. However, if you are a hardcore gambler and like to see the math, skip to the bottom.
How Big Should My Bankroll Be?
If you don't want to bother with win rates and standard deviation calculations, we recommend using this simple trick:
Multiply your average bet size by your bets per hour. Then, multiply that number by 0.9. Now, multiply that number by the total hours you expect to gamble. Here's the formula:
For example, if you were betting $5 per hand at a blackjack table, averaging 30 bets per hour, and planning to play for six hours, you would need roughly $180 to ensure you had enough money for your session.
The 0.2 figure is multiplied in to account for the house edge plus player error. Most players don't play with perfect casino strategy, which increases the house edge.
Determining Risk of Ruin
To determine your risk of ruin, you need to first gather a few pieces of information. Namely, your return per dollar, your standard deviation, and your bankroll size. I like to use this risk of ruin calculator to do the math for me.
To use the calculator you should enter your win rate, standard deviation, and a sample bankroll. Then, adjust the bankroll as necessary to see how large of a bankroll you need for a small risk of ruin. We recommend having a bankroll that places your risk of ruin under 10%.
Other Thoughts
Here are a few other pieces of advice for managing your casino bankroll:
- Always separate gambling money from personal money. You should never gamble money that you need for bills or food. We recommend setting up a separate account at your bank that you use specifically for gambling money, and only place money in the account that you can afford to lose. If you can't keep your casino money separate from your normal money, you may have a compulsive gambling problem.
- Certain games have much more variation than other games, and thus require a larger bankroll. If a game offers a lot of losses with the occasional huge jackpot (like Double Double Bonus video poker), the game has a high variance. If the bet offers frequent, small wins (like a Red bet in roulette), the game has a low variance.
- To be safe, figure out how much money you think you need for your gambling session, and bring a little extra. It's always better to have a little extra money than to run out.
