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Kelly Criterion insurance

What was the pit's reaction? Unknown to J, his deliberate style of play had long ago caught the attention of counter catcher Abram Carter who had been using the Roberts' ten count to case the shoe from the catwalk. Carter, assigning -2 to each ten and +1 to all the non-tens, had a running count of 204 and, although he was oblivious to the ace-richness of the 100 remaining cards, he knew that insurance was not warranted until the running count exceeded 208 in a 52 deck game. Consequently he signaled the pit that J had taken a sucker insurance bet and that they should comp the rest of his stay in hopes that they could get their money back. As a result, Jay's logarithm grew unboundedly ever after.

Since it may come as a surprise to many who believe in optimal proportional betting that they should occasionally take negative expectation insurance bets, a few guidelines are in order. A Kelly bettor should consider insuring at least a portion of his Online Blackjack Games against a dealer's ace if p, the proportion of unplayed tens in the deck, exceeds 1/3(l+f), where f is the fraction of capital the player has bet. Note that this fraction is somewhat less than 1/3, which is the critical fraction for card counters trying to maximize their expected ialth rather than, as the Kelly criterion decrees, optimizing the average logarithm of their ialth.

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Perilous Play

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