Does Kelly work the same way when the game does not have a normal
distribution (like video poker)?
Cogno
-----Original Message-----
From: vpFREE@yahoogroups.com [mailto:vpFREE@yahoogroups.com] On Behalf Of
nightoftheiguana2000
Sent: Thursday, September 22, 2011 9:26 AM
To: vpFREE@yahoogroups.com
Subject: [vpFREE] example of kelly betting a multiplay
You find a nickel 50 play, including the card club and mailers and some
secret promotions and employee greasing and back doors plus a fence for the
casino swag, it's a 1% overlay. You guess your current bankroll would let
you load up the machine about halfway, and the halfway variance is about 5.
That would make the approximate Kelly number 5/.01 = 500. Each hand is five
nickels = $.25, so the increment is 500 x $.25 = $125. Your current gambling
bankroll is $2,612.21, divide that by 500 to get your Kelly bet of $5.22442
. Some nits would say you have to play exactly that amount but that's horse
dookey, the rule is you can't bet more than that, less is perfectly ok, in
fact even a good idea. So here we're talking 20 hands right? 20 x $.25 = $5.
And you're off, but not to a good start, you have a bad run of cards and
you're down $125. Hey, that's the increment, right, see above. What do you
do? Down to 19 hands, that's right. You drop another $125, maybe this wasn't
a good idea, maybe the machine is fixed, maybe that gypsy fortune teller was
right, whatever, down to 18 hands. Finally you get a nice hand and win $200
(still a running loss of $50, right?), but you go back up to 19 hands, and
so on. Hopefully you get the idea. $125 is your increment, you go up or down
depending on where your current bankroll is.
http://www.youtube.com/watch?v=bg8lSyGavc4
http://www.youtube.com/watch?v=Mo0baknLDdU
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