In the introduction to this year-long series I talked about taking your winnings and not churning them through the casino for losses. This is, obviously, an important step in gambling responsibly but it's all for naught if you don't have a solid bankroll system in place to keep you on budget.
What follows is what works FOR ME. This is not, by a long shot, the only budgeting system that works. It also requires some discipline (I'll go into more detail later) and it's not mine. I cannot claim ownership of it or to have any special creative genius that caused me to create it. In fact, I stole it full chat from 1000 Best Casino Gambling Secrets by Bill Burton a book that I still read from time to time today.
It's basic, yes, but it has a lot of information including game and odds basics, bankroll management, and a lot of the themes that you see me write on. I'm not even sure he is the originator of all the material himself. I've seen the bit about gambler's believing in luck but casinos believing in math before, yet it's in his book and it's as true today as it was when I first read it several years back.
The point I'm trying to make is this: Good advice is good advice, you don't have to be the originator of a good idea to find use from it.
With that in mind I give you......
The Envelope System of Budgeting for Gambling.
Responsible gambling takes two main things: Discipline and prior planning. If you have one but not the other you might do OK, but you might also crash and burn. For example, if you have discipline but fail to plan then you might bring more money than you're willing to lose. And the best laid plans in the world can fall apart quickly if you lack the discipline to implement them fully and properly.
Planning involves two things:
1. Setting your original budget
2. Understanding and knowing what your gambling patterns are likely to be on an upcoming trip.
Setting the Budget
How much, in real money, are you willing to lose?
This is the first question you should ask yourself in advance of any gambling trip. If you don't realistically know how much you can afford to lose before the losses cut into your daily expenses then you should not be gambling in any fashion.
If you have $1,500 in the bank, and a $900 rent payment coming up before your next paycheck, and you're planning on gambling $1,000 tomorrow in a casino, or at the track, or anywhere else, then you're gambling more than you should. Because you have to look at that $1500 as already lost. It's spent money. In negative expectation games you have to view your bankroll as lost before you hit the door. Granted, you might win, but planning TO win is planning to buck the odds and that happens more rarely than you might think.
Also, don't think that you're going to take $1,000 but ONLY gamble $600 of it leaving you with the $900 you need to pay the rent. Odds are, in a fog of liquor and adrenaline, you're not going to stop gambling and will be forced to borrow money for rent payments or worse, investigate a pay day loan or pay late, which results in a fine, which could result in more bills messed in the next pay cycle.
Get the point?
To fail to plan is to plan to fail - Pete Brown
Houston had a progressive politician known as Peter "Plan" Brown. He sadly passed recently but he was the epitome of planning. He wanted to plan to plan the plan. While I don't take it to that extreme I do believe that prior planning is important.
"How much are you willing to lose?"
Answer this question by asking two things:
1. How much can you reasonably afford to lose?
2. What is your risk tolerance? (i.e. how much are you comfortable betting?)
To answer question number one I have established a savings account. In that account I take my average daily gambling spend, multiply it by the number of days I estimate I'll be gambling in 2019, and then deposit that total in there to start the year. Or, more accurately, I'll top off the account to get it to the number I need.
For the remainder of the year that is my gambling budget. It does not affect my day-to-day expenses and should it go to zero, so does my gambling for the rest of the year. I will say this, by holding onto wins in excess of $20 above my gambling bullets I have never ran the account down lower than 1/2 of its initial balance. When I return from a gambling trip I re-deposit all of the money in my 'take-home envelope' into the account, unless I'm a winner and the account exceeds my original limit. If that's the case I use any excess for expenses. I might make an extra payment on my mortgage, or my car note etc. But the account stays at it's original amount and remains my gambling budget for the year. In some cases I've done well enough to throw in an extra Vegas trip above what I already have planned.
Now that I've got my funds, I have to decide what games I want to play.
What is your risk tolerance?
As stated before I'm someone of a mid-to-low roller. I don't make extravagant bets, and I tend to keep my bets somewhere below $3.00. I typically play quarter-denomination, single-line video poker ($1.25 per hand) or I play slots somewhere between 75 cents to $3.00. Because of this I typically spend somewhere around $500-$800 per day on gambling depending on what other plans I might have (a fancy dinner, a show, a hockey game etc.)
Looking over my planned itinerary I set my daily budget in order to determine my total budget. A fictional example might look like this:
Day 1: Arrive at 4:30 Vegas Time $300 (This is only a partial day after all)
Day 2: Gambling on the Strip $500 (I typically risk less on the Strip because of poorer odds)
Day 3: Gambling, dinner and Vegas Knights game $400 (I'll reduce it a little because of non-gaming activities
Day 4: Transfer to downtown $700 (I always risk more downtown)
Day 5: Locals casinos $700 (Same as above, always try to play more at casinos with better odds)
Day 6: Locals, Dinner, Neon Museum $600 (Slight cut because of non-gaming activities)
Day 7: Fly our at 7PM $300 (I usually gamble lightly on the last day)
Total budget for the trip: $3,500
So, three thousand, five hundred dollars is the money that I am expecting to lose on this trip. Granted, I don't WANT to lose it, and my goal is to come home less than $500 down but I'm ready to put this money at risk understanding that, due to the house edge, it is more likely than not that I am going to lose some of it.
So, now I have a plan, the question is how do I try and stick to it?
For me that answer is the envelope system.
I am going to take my bankroll and I'm going to divide it up by day, according to the budget that I have selected, I am then going to put the amounts per day into an envelope and place all of that in the safe. Each morning, I'll take out the money for the current day, while placing any money from the previous day into the "take home envelope". That includes money from my original stake that I did not gamble, or money from my wins that have been put away into a safe place. I'm then ready to attack a new day with only my current day's stake in play.
As I stated before, this method takes discipline. It's not easy to run out of money at say....5PM because you hit a down streak and not go tearing into the next day's envelope, or churn through winnings that you've previously banked. But, and I admit it's a big, huge, gigantic but, if you CAN follow through with this program you should find that your losses on gambling trips are greatly reduced, and a winning trip suddenly becomes more attainable.
2 things:
1. Depending on your bankroll I wouldn't travel with much cash on you. Remember that the TSA will make you account for any cash you hold over $10K. Typically a car service (I use a limo) will stop by the bank for you so you can withdraw money prior to arriving at the hotel. NEVER USE A CASINO ATM their surcharges are ridiculously high in addition to what your bank will charge to use one of their non-bank ATMs. Go by your bank's website before your trip and see where they have branches or affiliates in Las Vegas. Alternatively, you can apply for a line of credit at the casino, but you cannot use the envelope system for that. In that method you will need to withdraw markers for your daily budget.
2. DO NOT walk around Las Vegas with a lot of cash. If you make a big enough jackpot, ask for a check. If you're close to your home casino go to your room and put your winnings in the room safe. In today's Las Vegas you're not safe, even on the Strip. Don't be a victim.
And that's MY system for bankroll management. Well, not really MINE, but the one I use. It's been successful for me but it is certainly not for everyone. Regardless of what system you use make sure that you're using a system that allows you to control what money you put at risk, and one that keeps you playing all day at a level you can afford, comfortably in the budget.
If you do this you might find that you're having a lot more fun in Vegas than you had on past trips. And it's a much better feeling coming home and putting money in the bank then sitting on the end of your bed wondering in vain where it all went.
Over the next few days we'll revisit Profit Growth Plans, and why Strip casinos should not be your go to for gambling any longer, but also why the Strip still has it's place and why doing SOME gaming there is a must.
Until then, I wish you the good side of the standard deviation.
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