8. Capitalization Requirments
Reserve capital (bankroll) requirements are something you dare not miscalculate. The key here too, is ultra-conservatism.
On the flat play, which means the same amount on all bets, any gambling game can experience tremendous swings. On a progression, the capital required is many times more. For example, if you played just red or black (even money shots) you could expect swings of 50 units in either direction. This does not mean 50 consecutive losers but it does mean your balance can reach -50 in betting just one unit per play. Of course, if you are playing a really bad percentage game it could go down and never come back. Then, no amount of capital would suffice for flat play.
Let’s assume you are cycling your bets and making intelligent decisions and let’s also assume you are playing on a single zero wheel as it is at least twice as hard to overcome the house advantage when playing on a double zero.
It is difficult for many people to develop a realistic attitude about gambling capital. They would like to take out 100 dollars or so and double it quickly. Although this has been done and incredible stories have been told about huge wins that started with a bankroll of just a “few dollars” … this is the rare exception and not the rule.
The true professional knows how to AIM for killing, but he doesn’t count on it. His first and foremost concern is SURVIVAL. The professional speculator knows that a small percentage profit is a good business and when he learns to make a small but steady profit on live casino games, his earning potential is virtually unlimited. It becomes just a matter of long hours and larger-sized bets.
The problem is that most people try to bet big without the proper reserve capital to stay in business. Someone with only a few hundred dollars in the capital should stick to betting $1 units. Instead, he tries betting 5 or 10 and the first little downswing wipes him out. A good reserve for conservative progression play would be $500 capital for a $1 start-up bet, making one dollar bets the basic “unit.” on less capital, 25 cents chips should be the basic unit. As capital increases, the 500 to 1 ratio should still be maintained. No one should make $5 bets unless he has two or three thousand dollars in reserve!
Beware of what statisticians call standard deviation. Although an astute blackjack card counter can, over the long haul, realize up to a 1.5 percent advantage over the house (depending on such variables as the number of decks, which card counting system he employs, and how many cards remain before the dealer reshuffles) losing streaks can last for weeks.
There’s a saying: If you can’t stand the flux, don’t bet the bucks. Many technically proficient card counters have been run out by the flux. An elegant mathematical expression of standard deviation’s power in gaming is the so-called risk of ruin, which establishes the likelihood that a particular bankroll will go to zero before it doubles.
According to calculations by the author of “Knockout blackjack”, Olaf Vancura, a card counter playing with a 101.11 percent expected return (the expectation of one version of his card-counting system) and a bankroll that’s just 25 times the minimum bet has close to a 47 percent chance of going broke before doubling his money. To drop the likelihood of going broke too, say, 0.5 percent requires a bankroll 1,000 times larger than the game's minimum wager; in a $5 to $25 game, that is $5,000.
Discouraging? The name of the game is SURVIVAL. Be realistic and consider what it takes to go into any other business. Where else can you take $500 in working capital and make $50 a day or more on your money? (The highest rate you might get from a savings account at the bank is only 5 percent, just $25 a year)!!! It takes $100,000 to open the smallest business today and even then, you have a good chance of losing it all. (Gambling when done right has less risk).
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