I'm bankrolling a buddy and we share net team wins 75% to me, while 100% of losses are mine. We will play the same ramp. I do not know the formula for calculating full Kelly bets given that there are two of us playing at separate tables always. Could someone help me out here please to calculate a "team ramp" given that our BR is X$ ?
Calculating Full Kelly for Team Play
- Thread starter zoomie
- Start date
If you play on different tables, all hands are independent. For this scenario, the full kelly bet is the normal kelly bet advantage * bankroll. However you need to somehow communicate your total bankroll for a full kelly bet.
How do you manage your 75%/100% rule ? This looks somewhat strange to me. If your variance is high even over a month (and it is on blackjack), taking 100% of losses while giving 25% of your winnings per month is a rather bad deal and might bust you - in the long run your friend will absorb your bankroll !
How do you manage your 75%/100% rule ? This looks somewhat strange to me. If your variance is high even over a month (and it is on blackjack), taking 100% of losses while giving 25% of your winnings per month is a rather bad deal and might bust you - in the long run your friend will absorb your bankroll !
It depends upon how close your communication is DURING each play. If your tables are close enough to each other that you both have a pretty good idea of how the other is doing, and as long as one of you isn't getting crushed; it won't change your bet size much, if at all.
A couple of things I must point out, however; and the first one is extremely important if you wish to have a successful venture:
1) In a blackjack game, it is a losing proposition to play FULL Kelly. This is because of the fact that doubles and splits will raise your average bet size to where you will be playing HIGHER than full Kelly. I seem to recall reading somewhere that the optimal bet size in blackjack is something like .61 Kelly. (Perhaps someone can correct me if this is not exactly the correct number; but I DO know that FULL Kelly is a recipe for disaster).
2) Unless you intend to play hundreds of hours before you split up the books, the freeroll you're offering your friend is WAY too generous, to the point where if you plan on zeroing out the books on a daily or even weekly basis, you are virtually certain to lose money, while your friend makes money.
A couple of things I must point out, however; and the first one is extremely important if you wish to have a successful venture:
1) In a blackjack game, it is a losing proposition to play FULL Kelly. This is because of the fact that doubles and splits will raise your average bet size to where you will be playing HIGHER than full Kelly. I seem to recall reading somewhere that the optimal bet size in blackjack is something like .61 Kelly. (Perhaps someone can correct me if this is not exactly the correct number; but I DO know that FULL Kelly is a recipe for disaster).
2) Unless you intend to play hundreds of hours before you split up the books, the freeroll you're offering your friend is WAY too generous, to the point where if you plan on zeroing out the books on a daily or even weekly basis, you are virtually certain to lose money, while your friend makes money.
I'm not 100% sure, but if your variance is much larger than your EV on a specific time scale, then the situation looks somehow like the following.
Say with 50% chance you gain $5000 in a month (in total), while with 50%
chance you lose $3000. The EV of your play would then be $1000 per month.
Those are just figures for the sake of argument, this depends on your game selection, bet size, and number of hands.
If you keep 75% of your monthly profits, but pay 100% of your losses, you keep $3750 in your profit's month, while still lose $3000 on other months.
This reduces your EV from $1000 down to $375 per month.
Your buddy will get the rest $625 of the total EV every month. That is almost twice as much as you earn !
If the variance is higher, it is very easy for your buddy to collect all (and more!) of your EV, while you are paying him.
Although the numbers are not precise, you might catch the idea. Giving 25% of your winnings (while paying for the losses) is a bad deal in high variance games.
Say with 50% chance you gain $5000 in a month (in total), while with 50%
chance you lose $3000. The EV of your play would then be $1000 per month.
Those are just figures for the sake of argument, this depends on your game selection, bet size, and number of hands.
If you keep 75% of your monthly profits, but pay 100% of your losses, you keep $3750 in your profit's month, while still lose $3000 on other months.
This reduces your EV from $1000 down to $375 per month.
Your buddy will get the rest $625 of the total EV every month. That is almost twice as much as you earn !
If the variance is higher, it is very easy for your buddy to collect all (and more!) of your EV, while you are paying him.
Although the numbers are not precise, you might catch the idea. Giving 25% of your winnings (while paying for the losses) is a bad deal in high variance games.
Yes, but for obvious reasons; it can sometimes take years for a counter to build a reputation of competency, and more importantly; honesty. People who are in the business of investing are quite often besieged with harebrained schemes. How can they really know if you're on the up & up? So if you're looking for an investor; unfortunately it's up to you to somehow figure out how to convince someone that you're the "real deal". 
As far as "make up" - yes; sometimes. There can be any number of arrangements between the investor and the investee. The problem with an arrangement with makeup: It gets back to the issue of reputation and honesty. If you get buried, how does the investor know that you won't simply walk away from it all, rather than stick it out until the team is out of the hole?
When I offer MY services to an investor, I personally PREFER to include an offer of FULL makeup into the arrangement, as I'm confident that I'm able and willing to dig out of any hole I can get myself into. I feel that that allows me to command the largest possible freeroll for myself while still giving the investor the fairest possible arrangement.
As far as "make up" - yes; sometimes. There can be any number of arrangements between the investor and the investee. The problem with an arrangement with makeup: It gets back to the issue of reputation and honesty. If you get buried, how does the investor know that you won't simply walk away from it all, rather than stick it out until the team is out of the hole?
When I offer MY services to an investor, I personally PREFER to include an offer of FULL makeup into the arrangement, as I'm confident that I'm able and willing to dig out of any hole I can get myself into. I feel that that allows me to command the largest possible freeroll for myself while still giving the investor the fairest possible arrangement.