PROMO CHIP PROFITS
By Kenneth R Smith
Ken Smith is considered by his peers to be one of the best tournament blackjack players. He is the author of the new e-book, How to Win More Blackjack Tournaments: Tips, Tricks, and Strategies to Supercharge Your Game published by Blackjack Insider. Ken hosts the popular websitewww.BlackjackInfo.com as well as the online tournament community at www.BlackjackTournaments.com. He has appeared on TV in all four seasons of GSN's World Series of Blackjack, the Las Vegas Hilton Million Dollar Championship II finals, and is also featured in the Ultimate Blackjack Tour airing on CBS & WGN Networks. You can subscribe to his free email newsletter at http://www.blackjackinfo.com/news/.
Promo chips seem to be popping up everywhere these days in the tournament world, with many casinos choosing to pay part or all of the prize pool in promo chips instead of cash. It's easy to see why this trend has developed. A casino can advertise a large first place prize, and then award promo chips which are worth considerably less than cash. Most players assume that the promo chips are worth nearly half of face value, and the way most players use the chips, even that may be generous.
It is important to be clear about the exact type of promo chip in question. I'll restrict the discussion to what seems to be the most common version in the tournament world - a promo chip that is good for one decided wager. Whether you win or lose the bet with the chip, the chip is retained by the casino. We'll also assume that the promo chip is not taken away in the event of a push or tie decision. If you bet your sole $100 promo chip on red at roulette and red comes up you'll end the spin with a $100 live chip, and no promo chip.
Before I get into the details, I want to point out that all the analysis in this article was actually done by James Grosjean, who published the end-all document about match play coupons and promo chips at his website http://www.beyondcounting.com. If you regularly play any of these types of promo bets, you should definitely read his entire article titled "Beyond Coupons".
If we look at the roulette red-bet example, we find this strategy yields an expected value of only $47.37 on a double-zero roulette wheel. As you might expect, we can do better. How to do better may be quite a surprise to you though. In many ways, promo chips turn the entire gambling world on its ear, and intuitive answers are rarely correct.
Many players head right to the blackjack table with their handful of promo chips. That's an easy to understand decision. After all, even without card counting or other advantage play methods, basic strategy blackjack offers the lowest house edge in most casinos. But there are several reasons why blackjack is almost never the best place to play your promo chips.
The first problem is what happens with...
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