Chapter One: Money Management

Why Money Management is Crucial

I have played roulette for a number of years now. To stress the importance of money management I want to make two simple empirical observations: First, most roulette players are ahead in profit at some point during their playing session. Second, most roulette players leave the table with a net loss and often they are empty-handed, having lost their entire session bankroll.

Now, stop reading. Go back and reread the previous paragraph. Then think about it for a little bit. The other chapters of this book are important, but if you do not get the message of this chapter, you will lose money. This is the most important chapter in this book! Remember the empirical observations: Most players get ahead, but leave losers. Why? Because of poor money management. It does not matter how well you understand the game of roulette, you will lose money if you do not determine a money management plan such as what I am going to describe here.

Have I preached the importance of money management enough? I doubt it. Most people do not really become convinced until they have lost a good deal of money gambling. Please don't let this happen to you.

There are three simple steps to successful money management. The three steps are simple to understand and simple to do if you discipline yourself and get into good money management habits.

Determining Your Bankroll

First and foremost, the money you use to create a gambling bankroll has to be disposable income that you can afford to lose. Nobody wants to lose, but that does not mean you won't. Do not gamble with money you need to pay your bills - doing so is one of the chief warning signs of a gambling problem.

Money spent on gambling is like money spent on a hobby. It is up to you to calculate how much you can afford to spend on your hobby. Whether that amount is $100 or $100,000, money management is still of the utmost importance.

There are two kinds of bankrolls to think of. One is your total bankroll, the other is your session bankroll. Your total bankroll is the amount you have set aside for gambling. Your session bankroll is the amount you are willing to put at risk in any given gambling session at the LIVE casino.

You can organize your total bankroll into session bankrolls in one of two ways. I describe these as a series approach and a progressive approach. A series approach simply means that you break your total bankroll into a set of smaller, equal-sized session bankrolls. If you lose one session bankroll you simply move on to the next in the series. The rationale here is that you want to spread out your risks and you never want to put more than one of these session bankrolls at risk in any given betting sequence. Organizing your money this way prevents you from chasing your losses with larger and larger bets in a potentially desperate effort to make up your losses. With a series of session bankrolls, if you lose one, you shrug, walk away, and start fresh again with a new session bankroll.

Below is simply one example of how to organize your total bankroll into a series of session bankrolls. It is designed to be an illustration for how you can do the same, it is not designed to be The Way to do this for you.

  • If your Total Bankroll is under $150, use the whole bankroll as one Session Bankroll.
  • If your Total Bankroll is between $150 and $299, divide the money into two Session Bankrolls.
  • If your Total Bankroll is between $300 and $799, divide the money into four Session Bankrolls.
  • If your Total Bankroll is between $800 and $1199, divide the money into six Session Bankrolls.
  • If your Total Bankroll is between $1200 and $3999 then divide the money into eight Session Bankrolls.
  • If your Total Bankroll is over $4000 then divide the money into ten Session Bankrolls.

Players with less than $500 or so to gamble with might as well take the whole amount to the casino, recognizing that there is a risk, though hopefully a small one, that they might lose the whole amount. But once you get to the point where you have more than $500 invested in your hobby, I recommend that you take no more than half with you to the casino. That way if you do have a terrible day and lose it all, you still have at least half at home to come back with in the future.

A progressive approach to your session bankrolls is quite different than a series approach. It is riskier and is appropriate only if you have a rather substantial amount of funds you are willing to put at risk playing roulette.

The idea is that you play conservatively but are backed by the bankroll equivalent of a big stick. For example:

  • You start with a $100 or $200 bankroll that you play using $1 chips.
  • If you lose it, you move immediately to a $500 to $1000 bankroll that you play using $5 chips.
  • If you lose your second bankroll, you can move up from there to a bankroll of $2500 to $5000 that you play using $25 chips.

The virtue of this approach is that you make up previous losses much faster than you would with a series approach. One $5 chip split over 2 numbers pays 17 to 1 or $90 (counting the return of your bet). That makes up almost all of your loss of your starting $100 bankroll. The downside is that if you do not pick your bets carefully, you could end up chasing your losses wily-nily. There are a number of very good, safe strategies in this book. If you are careful, this sort of bankroll strategy could be ideal.

Regardless of whether you use a series or progressive approach, it is very important to learn discipline in the use of your session bankrolls. Let's say you have $200 to gamble with. You should go ahead and take it all with you, but divide it into two session bankrolls. When you play, buy $100 worth of chips. If you lose it all, walk away. That session is over. You lost.

Walk away and think about what went wrong and whether you misplayed or just had bad luck. Go off and relax a bit until you feel you have a good attitude again. Then start over with your second session bankroll. Do not try to win back your loss all at once. Forget that first $100. It is history.

Instead, just start over with this second session bankroll. The same idea can be applied no matter how much is in your bankroll or how you have organized it.

The idea here is that as you increase the size of investment, the more cautious you need to be to minimize the risk of what gamblers call "ruin" - the loss of your entire bankroll. Most gamblers, once they have saved up a sizable bankroll, want to feel like a high roller and gamble at a substantially higher level. It is fun to act like a high roller and bet those big chips. You get treated like royalty by the casino staff and often are "comped" (given free meals or other benefits) at a greater rate than playing low stakes. The reason the casino treats you so well is that they want you to keep playing so you will lose those big chips. You must resist this temptation. Instead, see yourself as a general keeping plenty of troops in reserve. As your bankroll increases, you will indeed be able to increase the size of your bets. The key is to do so slowly, steadily, and cautiously.

Do not allow yourself to take your checkbook, ATM card, or any credit cards with you to a casino. If you hit a losing streak (and we all do at times) it is simply too tempting to reach for more money. Don't. Quit and play another day. I have seen gamblers lose every penny they have on them and who then must beg or borrow taxi fare home. I have seen respectable folks reduced to tears as they had to call home to ask for money to be sent to them so they can pay their hotel bill. Gambling makes people do crazy things, so be careful!

Setting Win Goals and Loss Limits

The vast majority of casino gamblers have no idea what they are doing when it comes to money management. If you asked the average casino goer "What is your goal today?" they would probably look at you blankly because they do not have a clue, or else say something outlandish like "win a million dollars!"

If you want to go win a million bucks in one trip to the casino, you are reading the wrong book. I have designed this book for steady, modest wins that will slowly add up to whatever amount you want to go for.

The reason you need to set specific goals is that otherwise you will not know when to stop. Remember the empirical observations: Most players get ahead but leave losers. You must decide before you sit down what it will take for you to leave.

Your loss limit is very simple to calculate: It is your session bankroll. If you lose your session bankroll, whether that amount is $100 or $18,000, then walk away. That session, as I said before, is history. One of the worse things a gambler can do is to "chase" a loss by reaching for more money to play at the same table trying to make up your losses. Don't do it. Have the class and the discipline to walk away. Many serious gamblers, including myself, have learned this lesson the hard way. Later we shake our heads and think "if I had only just stopped I would have only lost such-and-such" instead of five or ten times that amount.

The amounts I described earlier for dividing your total bankroll into session bankrolls are arbitrary. You should feel free to divide your money in some other way if you like, but I insist that to stay a winner you must follow the basic principles I have described so far: Divide your total bankroll into session bankrolls, and walk away if you lose a session bankroll.

Setting a win goal is easy in theory but tough to follow in practice. I am going to describe an approach that is quite deliberately conservative. You can deviate from the particulars, but the basic principles are important to follow: You must set a reasonable goal to win. My suggestion is to set the goal of winning 10% of your session bankroll. Now, I am not saying you have to go home at that point, only bring this particular session to an end. If you buy in for 100 chips, then you should stop once you are over 110 chips. Calculating 10% is simple so it is an easy amount to keep track of.

Now, many people say to me that they refuse to quit while they are winning. No one likes to quit while on a roll. Fine. Then you need to keep a second win-goal concept in mind: Never give back more than half of your profit in one session. For example, let's say you have a big hit on your very first spin and find yourself with a profit of 30 units. Personally, I would walk away at that point. But if I were to continue to play, I would not allow myself to lose more than 15 of the 30 units of profit. If you lose that amount, walk away. You are still up by 15 units. That is better than getting irritated and trying to win it back and ending up with a loss. If you continue to win, then readjust your loss limit as you go. Tell yourself, for example, that since you are now up 60 units you will give back no more than 20 before stopping.

Setting both a win goal and a loss limit is absolutely crucial, because it is the only way to tell when it is time to stop. Remember: Most players get ahead but leave losers. Don't be one of them.

Why 10%? Why not 25% or 50%? The 10% figure is not simply pulled out of thin air. In my experience 10% is a reasonable goal that you can reach most of the time. Setting a higher goal means that you will risk your 10% profit in order to try for more. Playing longer at the same table increases the risk of hitting a cold streak. Instead, I recommend you take a break after you reach your goal. Change tables. Don't worry if you only played a few spins and are already cashing in. That is no one's business but your own.

You may notice that you change tables far more frequently than most other players you see. So what? Most players get ahead but walk away losers. You will hear stories of people having big wins that will make you hunger for more than a modest 10% goal. What those stories leave out is all the losses that happened before and after the big win. You bought this book because you thought I might have something valuable to share with you. The money management strategies I am describing here are the result of years of play and, to be honest, the result of some hard lessons I have had to learn personally. I know firsthand how winning makes you arrogant and you start to take bigger risks, only to come crashing down with a big loss. If you want to ride a roller coaster for the thrills of highs and lows, then go find an amusement park. If you want to regularly and consistently win money playing roulette, then you simply must learn strict money management habits, starting with the 10%-win goal.

I am not telling you to go home after winning 10%, I am only saying end your session. Go to a new table and start your next session. Depending on how long you spend at the casino, those 10% profits will add up nicely. This leads to the last goal you need to set: Your win goal for the day. Set a goal of how much you want to win, but make it a reasonable goal. If you go to casinos often, set the goal to win between 50% and 100% of a session bankroll (not your total bankroll). That means you will play as many sessions as it takes to get to your specific goal, then go home.

Discipline and Team Play

The hardest thing in the world to do in gambling is to walk away after winning. That is truly the key to casinos' financial success. If you really want to make money playing roulette, you simply must develop good habits like I have described in this chapter. You must be disciplined. I have two suggestions for helping to develop this discipline. First, keep a logbook of your casino wins and losses. This should be a small notebook you can stick in a pocket. Take it with you to the casino and record the results of each session. You can include a lot of information or a little, but at least include the following.

Date Time Casino/Table W/L


1:00 - 1:20 pm Mirage, $5 table up 30 units

1:30 -2:20 pm Mirage, $5 table up 10 units

3:00 - 3:30 pm Harrah’s, $5 table up 15 units

Keeping a log will help you see patterns over time. Perhaps there are some casinos where you do better than others, or perhaps you will notice (as I have) that most of my wins come quickly and the longer you stay at a table the less you win. You can add any other information you want--like what strategies you concentrated on in that session or who the dealer was. If you start to see patterns, you can take advantage of them.

More importantly, keeping a log has important psychological functions. It will help you feel good about your accumulation of modest wins. It will make you feel bad if you broke your own win-goal or loss-limit rules. That's OK.

Knowledge is power. To become a better player, you have to know your strengths and weaknesses, and concentrate on eliminating weaknesses (like the temptation to stay at the same table).

My second suggestion is to play with a partner. If your spouse or significant other also likes to gamble, play as a team. Or go with a friend. If it is not possible to go to the casino, then have a "gambling buddy" to whom you promise to tell your results after each casino trip. If you are married or involved in a serious relationship, never lie to your partner about your losses. It is a good way to ruin the relationship and it encourages you to create a separate fantasy life of gambling that can lead you into all sorts of serious problems, including addiction.

Why have a partner? Because we are less likely to make stupid decisions if we are not alone. We can talk ourselves into anything! You can rationalize to yourself to ignore every bit of advice I have offered in this book so far in the heat of the moment. But if you have a friend present, or if you know you have to tell someone about your choices later, then you are less likely to take unnecessary risks.

I have already stated my belief that this chapter is the most important chapter in this book. I promise you that if you follow the suggestions I have made, you will see your gambling profits rise:

  • Never play with money you cannot afford to lose.
  • Divide your total bankroll into session bankrolls.
  • Set realistic win goals and stick to them.
  • Keep a gambling log.
  • Find a partner you can play with or at least report to.

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