No net losses

[bry85]

So lets say you're in a situation where you could insure your net losses 100% for a flat $ amount. And even better, if you win you win, you only have to pay if you end the month with net losses. What would this situation be worth?

 

[callipygian]

So lets say you're in a situation where you could insure your net losses 100% for a flat $ amount. And even better, if you win you win, you only have to pay if you end the month with net losses. What would this situation be worth?

Who's insuring you? The casino? Investors? A fairy godmother?

 

[Sonny]

It depends on how much the insurance costs, but it could be a very big advantage if it is a reasonable amount. It will also depend on how often (and how many times) you can collect the insurance. Here's an old discussion about a similar strategy:

http://www.blackjackinfo.com/bb/showthread.php?t=6656

-Sonny-

 

[bry85]

It goes like this, Casino A is offering its affiliates a 100% share of house win revenue for a given month. The affiliate is willing to sign up one person for this offer, this ensures that either the player wins and is up for the month, or loses and all his losses go to that affiliate (If more than one player is signed up for this deal one players winnings could cancel out another's loses, meaning the losing player would get nothing back). At the end of the month either the player has won money and all is well, or the player has lost money, of which he is refunded all losses, minus the flat insurance payment, by the affiliate.

Mathematically this does not change house odds at all over the month seeing as how the loss refund is a one shot thing. It's just an insurance if (when) the house does win.

It's more or less a silent auction with the affiliate, whoever pledges the highest insurance rate gets the deal. So basically does anyone know how to calculate the value of the deal?

In terms of trust issues with the affiliate, I've worked with him many times before and know him personally, so that does not factor into the problem.

 

[callipygian]

At the end of the month either the player has won money and all is well, or the player has lost money, of which he is refunded all losses, minus the flat insurance payment, by the affiliate.

The insurance payment is completely flat, as in you pay $X and you can lose as much as you want? If so, is the amount that you're able to bet limited in any way?

Or are you insured up to a certain percentage of your losses, such that the affiliate will return X% of your losses?

Either way, the calculation should be relatively simple. If you pay a flat fee, you'll need to calculate the probability of you winning over the month, and then subtract out the total cost of insurance (which I assume you pay whether you win or lose). If you lose a certain percentage, then you'll need to calculate the probability of winning and losing and then multiplying the losing side by an insurance factor.

 

[bry85]

The insurance payment is completely flat, as in you pay $X and you can lose as much as you want? If so, is the amount that you're able to bet limited in any way?

Or are you insured up to a certain percentage of your losses, such that the affiliate will return X% of your losses?

Like let's say I bid $1000 for the insurance. If I play with $5000 and end up loosing it all I would get 100% of the $5000 back minus the $1000 I bid. The catch is if I net loose anything under $1000 I get none of it back. If I win, I win, and the $1000 is not subtracted from whatever my winnings are.

Would $1000 be too much to bid if I think I'll more likely than not end up loosing no more than a couple hundred?

 

[moo321]

If this is an online casino, and you're thinking about signing up one of your friends and freerolling the casino, I'd highly recommend against it. Casino affiliates are notoriously unreliable. That, and you shouldn't be talking about it on a public board.