Michael Shackleford “Wizard of Odds”

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Michael Shackleford
Adjunct Professor of Gaming Math at UNLV; Actuary & Consultant aka

My name is Michael Shackleford, more commonly known as the “Wizard of Odds.” It is a pleasure to be a guest on this site. I’d like to start by thanking you for all your hard work in the casinos. One of the goals on my site is to make the life of dealers easier by telling players to follow proper etiquette at the tables and to tip the dealers. However I also admit that I say many dealers out there give terrible advice, usually the “old school” dealers.

Aside from running my web site, Wizardofodds.com, I run a consulting business mostly doing math analysis on new casino games. I also work with many of the Internet gaming business on software development and slot machine design. My education is a bachelor’s degree in math and economics and have been an accredited actuary since 1995.

Thanks again for having me and let the questions begin.

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Thank you Michael for this opportunity. I love your site, as do many of the dealers and floor supervisors who visit mine. You are a gambling consultant specializing in solving math-based problems related to casino games. Bobby Florence, a dealer at the Palms casino hired you analyze his Royal 20’s, a blackjack game that offers a couple of side bets. Can you tell us the steps he and his wife Celsa went through to get this on?

The first step is to hire someone like me to work out the odds of your game idea. Sometimes I’ll say the game is not feasible because the odds favor the player or it is too vulnerable to card counting. Then you will have to get a trial period permit from the Gaming Control Board. The fee for this is about $4000 and you have to have a clean criminal background. Then the hard part is getting a casino to be the guinea pig for your game by conducting the field trial. If the field trial goes well you can apply for a full license from the Gaming Control Board. Then it is back to selling the game to the casinos. The vast majority of games I do never even see the field trial stage. Of those that do get a field trial they may get a few placements after that but eventually get pulled for lack of play. Overall new game marketing is a very risky venture.

A good place to learn more about marketing new games is this piece I wrote: http://www.gamingmath.com/new-games.html. There is also an article about it in the August 2004 issue of Playboy. Both will answer your question about what you have to go through to get a new game into the casinos.


Have you been involved in the development of any table games that have succeeded in finding a home on the casino floor other than Bobby’s game?

Yes. Games I’ve done are played in casinos all over the world and the Internet casinos. Ironically here in my own backyard of Las Vegas few have had much success. Some games I did the math for were field trialed here but never went further. The only game that has been around for a while here in Vegas that I helped with is Pai Gow Plus Double Bonus, which can be found at the Plaza.


What basic steps do you use to analyze casino games?

First I think the game through and decide my plan of attack for the analysis. Sometimes I do a random simulation, sometimes pure math in Excel, but usually I go through every possible set of outcomes by brute force using C++. Often with poker and blackjack variants I can copy and paste functions from old jobs. Once I finish I usually get one of my assistants to analyze the exact same game to ensure that two minds come up with the same answer. If we disagree we go through a trial and error process to find the point of departure. Once I’m satisfied my results are correct I write it up and file the game away.


Would I need a trial period permit if I only add a side bet to an existing game? Such as the Royal 20’sfor example?

Yes, you would still need a permit but the process works differently if the side bet qualifies as a “variation.” A variation is a simple change to an existing game that does not affect player strategy. Royal twenties for example does not affect strategy so would be considered a variation. There is currently no fee to apply for a variation and the application waits in a different pile than more complicated games. It used to be that variations were faster to be approved but there is such a backlog now that both variations and new games take about a year.


Assuming you think a table game idea may have a shot at success, are your services available to assist in getting it through the field trial and licensing? What about marketing assistance?

I’m mainly just a hired mathematician. I can offer some advice on field trialing, licensing, and marketing; but that isn’t my area of expertise.


We have had a few arguments here as to the reason why craps is in demise. Many of us feel when Casino Inc started increasing the odds opportunity (10X, 20X…) on dice games combined with better paying props, don’t we have a recipe for lower hold percentages? Hell, most of the dealers tell players to bet less flat and more odds thus causing reductions in the average flat bet wager. Would you agree this was a mistake?

No, I don’t think better odds are the reason for craps demise. I think the better odds are an effort to stretch the lifespan of a dying game. In my opinion all games have a limited life expectancy and will eventually go the way of the dodo bird. I predict in 75 years it will be hard to find a blackjack game because existing players will die off and new ones will not want to play their “father’s game.”

SHIT! …….Wrong answer Michael…….You’re killing me man!…..


Blackjack: The change in odds (6:5) Do you feel that some casinos have been misleading in the way they promote the game; and that if the 6-5 game continues to proliferate, it could cause tourists to view Las Vegas casinos as unnecessarily greedy? Or is it OK to capitalize on people’s foolishness?

I differ from other gaming writers about this question. While my colleagues blast the casinos over the 6-5 blackjack I feel as long as they are disclosing the rules then I’m fine with it. If players are foolish enough to play then it is their own damn fault. Plus, we need some bad gamblers to subsidize the good ones.


Internet gambling is a multi-billion dollar industry — and growing — Has it become so large that it may difficult to successfully prohibit?

It may be a huge industry but there are only a handful of ways to get money into the Internet casinos. The industry has already been hurt by credit cards and then Paypal voluntarily blocking transactions. If Internet gaming does become prohibited I believe the government will chock it off at the remaining methods of transferring money, like Neteller, Western Union, and bank wires. There may be some loopholes but electronic money transfers always leave a trace and few will want to risk the F.B.I. asking questions about a suspicious money movement.


YOUR QUESTIONS : Submitted for For Michael Shackleford Adjunct Professor of Gaming Math at UNLV; Actuary & Consultant aka

JJ: TGS – Scottsdale AZ

Would you agree that if every gambler would take the time to view your website that guys like me would be out of work?

No. Maybe some of you might lose a job but most are safe. The vast majority of gamblers have no interest in improving their odds. I’ve tried to give some bad blackjack players basic strategy cards and they reacted like Dracula to a cross. As players get better the casinos only tighten their odds, which is exactly what happened with video poker over the last decade. However after reading my site some people remark that gambling seems so hopeless that why bother. Those are the kinds of players that would be lost if more read my site.


Real Deal: TGS Las Vegas, NV

How do you figure what the hold percentages on blackjack should be when the game is introduced to a new market?

The hold percentage is the ratio of money a table makes to the amount that players buy in chips (the drop). I have no way of knowing that in any market. It depends partially on how long a player sits at the table and grinds through his buy in. So although I’m always asked I never answer that question, except to say that in new markets players tend to play pretty badly.


LC: Dealer Kansas City

Do you feel that there is a symbiotic relationship between card counters and casinos?

No. I see it as a one-way relationship, the casinos giving and the counters taking.


JB: Dealer, Las Vegas, NV

Hello wizard, what are the odds of rolling back to back one way numbers on a pair of dice? (2/12 and hardways) and what would be the odds on three in a row be? This would make good conversation on the game.

Once the player has rolled a one-way number the probability of rolling it again on the next throw is 1 in 36. However the probability that the next roll is any one-way number and the following role is the same is 1 in 216. The probability the next three rolls will be the same one-way number is 1 in 7776.


Greg: Dealer, Las Vegas, NV

Are you as surprised as we are of the success of “Let it Ride” from a mathematical standpoint?

No. Most players don’t know and don’t care about the house edge to any game. Let it Ride came along at a good time before everyone was trying to market a poker variation, and had a big backer in Shufflemaster, so it was not unlikely to be a success.


Anne: Dealer, LV:

Would it be fair to assume that an unfavorable review by The wizard of Odds could be damaging to anyone who is trying to sell an idea or develop a new game of chance?

Once I wrote an article about Bonus Six poker for Casino Player magazine, stating the house edge was much too high and that players shouldn’t bother with it. Later at a gaming show I ran across the game owner and he was furious with me. I’m not as edgy as I used to be and no longer shame a game for a high house edge. I just say what it is and if the player is smart he will know not to play it. All I can do is lead a horse to water and hope that he drinks.


VT – Shift – North Las Vegas, Nevada

Your site is very player friendly. Do you feel you have achieved a balance of acceptance by both the gaming industry and gamblers alike?

Yes. I’ve been told by people in the business they use my site as a resource all the time. Although it certainly does teach players to play better it seems to be well respected by all, if I may toot my own horn. I strive to just state the facts and keep my personal opinions to a minimum.


Birdman: Dealer, Las Vegas, NV

Are you hired as a consultant mostly by online casinos or land based? Don’t you feel that by advertising online casinos on your site that there is a conflict of interest?

About 2/3 of my consulting business is land based and 1/3 Internet based. Although the land based casinos generally don’t like the Internet casinos not one client has made an issue of who advertises on my site. I don’t take a side in the land against online casino competition. If a land casino wanted to advertise on my site I’d be happy to talk about it. I hope that answers your question.


G.I. Dealer LV

Can you please explain how to compute a house advantage in percent? Please explain this in terms of a game in which the player makes no decisions that affect to outcome of a bet/hand. Craps is the best.

The house advantage is the ratio of profit the casino can expect to maker per dollar bet. For example the probability the player will win the pass line bet is 244/495, and the probability of losing is 251/495. So the house edge is 1*(251/495) – 1*(244/495) = 7/495 = 1.41%.


Sam: dealer – LV:

If you had a desire to double your money in a land based casino what game would it be and how would you play it?

Funny you should ask. In an upcoming show for Fox about the Golden Nugget casino some college students try to parlay $1000 into $5000. I suggested that they play craps, trying to win as quickly as possible on the pass and taking the odds. So what I would do is size a pass bet in craps carefully so that you can take full odds and the largest win would get you to $2000 exactly. Keep repeating until you get to $2000 or go bust trying. Sizing bets is important so that you always take maximum odds yet will not go over $2000. The reason I don’t advocate the don’t pass is I think more bets will be required.


Linda: Dealer Reno, NV

I tried seeking this answer on your site but ended up reading other stuff. You have assembled a very interesting site sir. My question is this; In craps you have the house edge on a place bet 4 or 10 at 6.6%. Why? The true odds of the bet are 6:3 (2:1) and we pay 9 to 5 why isn’t that considered 10%? We are paying 9 rather than 10 on a $5 wager. Another one is betting on “Any Seven” – If the payoff is 5 for 1 rather than 5 to 1 natural, why wouldn’t this be a 20% house edge? You have it as 16.6%

Thank you for the compliment. You are thinking about the ratio of the payoff odds to the true odds. The player sometimes loses, in which case it doesn’t matter what the odds were. One way of computing the house edge would be to multiply the difference between the true odds and payoff odds by the probability of winning. For example on the place 4 bet that would be (2-1.8)*(1/3) = .2/3 = 6.67%. On the any seven it would be (5-4)*(1/6) = 1/6 = 16.67%. I hope this helps.


Rod: TGS San Diego

Have you ever been to Barona and if so what do you think of our BJ rules compared to Vegas casinos on the strip?

No, I haven’t but plan to soon. I hear they have good rules there.


Steve: Dealer San Diego

Scott, Please ask Wizard of Odds when analyzing table games in land-based casinos U.S. and abroad, is there a game you feel is not getting the attention it deserves? If so, why?

No, not really. I’ve done some games that I thought were rather clever but none that really stand out.


ZZ: Dealer Las Vegas

#1. On your site you wrote: “There is a lot of confusion between the house edge and hold, especially among casino personnel” – Can you follow up with this statement? Just curious.

As I stated in an earlier question the hold is the ratio of chips that leave the table to the drop. The house edge is the theoretical advantage the casino has on each bet. The hold will be higher because as the same money circulates back and forth and the casino keeps chipping away at it.

#2. On your site you were asked if you would ever consider working in a casino and you replied: “Yes, if the right offer came along I would consider employment in casino management” – My question is this – What position would you consider if the “right offer” came along?

I know casinos generally don’t have mathematicians on the payroll but I think I could earn my pay for a large casino with that designation. One way I could help would be to carefully analyze play of a whale to determine his exact expected loss, which would help the casino know how much to comp and know who to try hardest to lure back. My card counting friends will hate me for saying this but I could also easily spot counters and some other advantage plays. So although there is no one current job title that would suit me best I think I could help a casino in a host of different ways that are currently performed by different people or not at all.


Greg: TGS Lake Tahoe

You’re the man Wiz! Scott apparently didn’t like your answer to his craps question up there (He’s a diehard) I realize you’re a mathematician and you base your opinions on fact but just for the hell of it let me ask you this;

Casino Inc hires you to resurrect craps from its demise. You have the ultimate power Wiz, every casino will adhere to your advice. What would you do?

There are some little things I might suggest but saving craps from its eventual demise would be like keeping the tide from coming in. Little things that might get more play are a higher multiple allowed on the odds, comping the players better, and the full four dealers on the table. I hear some casinos are cutting down to three. However this is unlikely to happen. Casinos are happy that more and more players are migrating to slots and if anything they would try to accelerate that process.


G S: Dealer LV

Scott,I’d like to ask Mr. Shackleford how to determine the winning expectation rate for any given Texas Holdem hand, preflop. For example, how do I compute the rate of dollar expectation of A-K offsuit (or any two cards) against an entire table of players versus one other player.

There must be a chart somewhere that tells this. I play poker online and this would give me a huge edge over someone who does not have it. Another thing, ask if there is a formula to figure out exactly how much to bet in a no limit game with any hand. Maybe there is some computer software out there that includes this stuff. If so, I want it!

There are lots of poker books that list the most powerful initial two cards. I also once did a random simulation to determine how often each initial hand wins, assuming all players stay in. However I’ve had a lot of readers argue with me about the results, mainly that pairs did not rank well, so I took down the link. However the section is still up at wizardofodds.com/games/holdem.html. I’ve been meaning to review my program and repost this section. Until then use it at your own risk.


Thank you Michael for taking the time to come in here and answer some questions. Your efforts are truly appreciated. And thank you to all the dealers and TGS that helped me with this interview.

Regards,

Scott

Thank you for all your good questions. It was my pleasure to answer them. Thank you for all your hard work and if you see me at the tables please say hello.

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