But in the casino, of course, you will also encounter players who place such bets, despite their huge bankroll. That begs the question why they actually do it? And why not bet on them sometimes, too?
Low odds against high winnings
The reason is not just a very high payout ratio; these bets make you different from most other players. You risk more, but you can also win more. But it will be much better to look at the evidence based on mathematics and the theory of “first three moments“.
During several test games or sessions, you will encounter all three. The first moment is the house edge, the second is volatility and the last one is outcomes with high positive skewness.
As an example, take the “Fire Bet” in craps. This is a special side bet the players can place before the dice are rolled. It relies on different combinations being rolled in the next few games, where the order is not important. The first three rounds are not paid out during the Fire bet, but the fourth to the sixth game will bring you very interesting prizes.
The probability of a successful bet is an integral part of rules of craps. However, every casino can easily modify these rules. The table below shows the probability of each unique point (0 to 6), along with three types of payouts (A, B, C).
The table also lists a set of individual payouts, house edge, and standard deviation. We can imagine volatility as jumps in the amount of your bankroll, both in the positive and negative direction.
Fire Bet in craps
|Points||Probability||Payout A||Payout B||Payout C|
As you can see, the house edge is really extremely unfavourable. For contrast, take the Pass or Don’t Pass bets which have an edge of only 0.5%. The house, therefore, earns $0.14 on a $10 Line bet with a $30 chance, but nearly $0.25 per $1 Fire bet (Plan B).
Side bets will last longer
Let’s say you play on the $10 table and your stack is worth $500. At this point, you can divide it – mentally or even physically into $50 for $1 Fire bets and $450 for $10 bets with a $30 chance and one or two $10 or $12 Place Bets. What are the chances of winning $1,000 or more on Fire beats, before you lose the entire $50 on this bet?
As you can see, your chances are not so pretty. With Group A payouts, your chances are only 2.09 percent, B payouts being 3.29 percent and C payouts only 0.827 percent. Our prospects are therefore miserable. But on the other hand, how often have you earned or see someone earn $1,000 from $10 bets?
Because you can bet a Fire Bet only when the shooters take turns, it will take you about 4 to 5 hours to lose your entire $50 stack. Even if you lose every round. So it’s far more likely to lose $450 in $10 Line bets. That would take about three to four hours.