going rate for AP's??

[Thunder]

I got offered to play for an investor. What do you guys think is an appropriate fee to charge? 10% of the winnings, 20%?

 

[Brock Windsor]

Does or can the investor play? Be the BP?
If the investor is putting your max bet level into purple chip range you have to expect extra scrutiny, factor the increased risk of losing your game into your expected value. I would want a wage plus buy in for a percentage of the bank. If you can share with us the size of the bank you will be playing off of that could help us give you a valuation.
BW

 

[Thunder]

$100k The investor knows the rules of the game and what not but obviously can't count. They wouldn't be playing with me at all.

 

[NightStalker]

It depends

if you are playing alone normal card-counting game on his money: 25-50% of the winning

If you are being used as a BP and investor is physically present with you during the play. Investor is guiding you every move and is counting, then 10-20%
Investor is offering you some hidden game, or strategy: 5-15% of winnings..

In your case, I would charge 25%plus in winnings..

 

[Nynefingers]

if you are playing alone normal card-counting game on his money: 25-50% of the winning

If you are being used as a BP and investor is physically present with you during the play. Investor is guiding you every move and is counting, then 10-20%
Investor is offering you some hidden game, or strategy: 5-15% of winnings..

In your case, I would charge 25%plus in winnings..

Over what kind of time period?

 

[WRX]

You haven't given enough information to allow an intelligent answer to your question. Exhibit CAA: Beyond Counting, particularly the chapter "El Burro's Gambit," is required reading when considering problems like this.

 

[bigplayer]

I got offered to play for an investor. What do you guys think is an appropriate fee to charge? 10% of the winnings, 20%?

30% of expectation plus limited expenses and you keep the comps and 50% of coupons.

 

[Jack_Black]

Is this some trustafarian (trust fund kid) with disposable income? Or is it a businessman who has been around the block? I say over 50% of ev for the trustafarian. For the serious investor, I say be competitive with going rates that funds charge. 20% of winnings that are only taken out after watermarks have been established. Don't forget to nickel and dime with management fees, Expenses, and what not.

 

[NightStalker]

Irrelevant of time period

Over what kind of time period?

I was talking in terms of EV, 25plus% EV of the game.
If you are planning to divide winnings, then it depends on the variance for the game. In standard blackjack, I would want my BP to play min of 100hours.. Otherwise as a player, 10% share per winning session is WAY GOOOD deal..

 

[Sucker]

I was talking in terms of EV, 25plus% EV of the game.
If you are planning to divide winnings, then it depends on the variance for the game. In standard blackjack, I would want my BP to play min of 100hours.. .

This is the ONLY way to be fair for both parties - it is IMPERATIVE for you to make this agreement while relying on EXPECTATION almost EXCLUSIVELY. Anything else is destined for sour grapes for ONE of you.

Otherwise as a player, 10% share per winning session is WAY GOOOD deal..

If you were to take THIS deal, your investor would end up losing money in the long run, unless your individual sessions were something like 100 hrs or more . Like I said - sour grapes. Are you in it for the short term, or do you want to make this person happy; thereby insuring a long-term relationship with him?

 

[Automatic Monkey]

This is the ONLY way to be fair for both parties - it is IMPERATIVE for you to make this agreement while relying on EXPECTATION almost EXCLUSIVELY. Anything else is destined for sour grapes for ONE of you.
...

I don't agree, here's why: the EV of a game can change over time but the agreement can not.

In this case I'd say a percentage of results over time, maybe set the time period to be approximately 1 N0 and balance your books and renegotiate after each N0.

 

[Sucker]

I don't agree, here's why: the EV of a game can change over time but the agreement can not.

Of course; which is why this factor must be included in the original agreement. I've found that the EV is different for every play; sometimes dramatically. The solution is to determine the EV on a per play basis.

In this case I'd say a percentage of results over time, maybe set the time period to be approximately 1 N0 and balance your books and renegotiate after each N0.

This is a very good idea, maybe the best idea of all. But in order to approximate the NO you HAVE to take the EV into account.

There's also another way to handle an investor, which is the way I often do it, when playing loaders:
I'll charge them a percentage of each individual result, with the understanding that any time we lose, I agree to keep making plays in order to make up that loss. The loss MUST be fully recovered before I start to get paid again. However; I do not recommend this for a simple card-counting play. There is too much risk of becoming indentured for months, if not years. I have a friend who's gotten himself into this very situation, and he's still digging out (without any pay) after three years now.

 

[Automatic Monkey]

...
This is a very good idea, maybe the best idea of all. But in order to approximate the NO you HAVE to take the EV into account....

True, but if game conditions cause the N0 to change from 15,000 to 20,000 hands, that's not a big deal if you balance your books after 15,000 hands. However the change in EV that would result in that N0 change is a big deal, to both player and investor.

 

[zengrifter]

I got offered to play for an investor. What do you guys think is an appropriate fee to charge? 10% of the winnings, 20%?

20% is the going short-term rate.
50% is the best long-term, for counting anyway. zg

 

[moo321]

20% is the going short-term rate.
50% is the best long-term, for counting anyway. zg

What ZG said.

I think 50% is fair long term, although personally I'd take 40% for a 100k bank. Much below that, and you're taking on too much risk. Depends how expenses and losses would be handled, as well.

There's a really good article on this over at blackjackforumonline.com. I believe it was the interview with Jonny C.

 

[Nynefingers]

I've got extremely limited experience in this, but in the banks I've been involved with, the goal was to give around 50% of the EV to the players and 50% to the investors, erring on the side of the investors. The pay was structured so that if the play ended with a small number of total hours, the player percentage of any net win was small (due to the effect of variance and the relatively high probability of a loss after that time). As the number of hours accumulated to larger numbers, the compensation plan was designed so that the players' percentage of any net win would increase, and at the limit, would approach 50%. Since it was difficult to determine exact EV and variance, estimates were made that favored the investors slightly, and all parties understood this going in. By the time we hit N0, the player share amounts to around 45% of any net win, since at that point, the likelihood of a loss is low, but more importantly the average amount of the loss is likely to be fairly low if there is a loss.

The exact calculation we used was based on the distribution of possible results after however many hours we played. The average win (provided there is a win) is obviously larger than the EV, since it throws out all possibility of a loss. We agreed to set the player share so that the probability of a win times the average win (conditional on a win) times the players' percentage equates to 50% of the EV, again using conservative estimates for EV (low) and variance (high). That means the percentages changed continuously as more hands were played, starting with a small player share, ramping up fairly quickly at first, and more slowly later, eventually approaching 50%. It isn't perfect, and it I'm sure there are better systems out there, but the fact is we weren't sure how many hours we'd be able to get on a play. It might last 2 hours, it might last 200 hours, and we had to account for all possible durations. This was the fairest way we could come up with to structure the split, and so far it has worked fairly well at aligning the interests of the players and investors. As Automatic Monkey mentioned, these conservative estimates of EV and variance imply a higher N0 than in reality, but once you get anywhere close to N0, the player share isn't going to change by more than another couple of percent, so the players aren't getting "shorted" by much by using those assumptions. I guess the bottom line is we were all satisfied with it, and we all felt like it was a fair deal. It suffers from the usual flaw that if there is an initial large loss and the N0 is high, the players have reduced motivation to play, so it might not be appropriate for straight counting. For games with a short N0, it seems to work reasonably well. Feel free to dissect it and show me the flaws :laugh:

 

[bigplayer]

True, but if game conditions cause the N0 to change from 15,000 to 20,000 hands, that's not a big deal if you balance your books after 15,000 hands. However the change in EV that would result in that N0 change is a big deal, to both player and investor.

N0 is irrelevant if you pay based on EV. You just create a conservative estimate of the EV for each type of blackjack game based on quality, strategy used, and game speed (fast or normal) and then after a session the player would just consult a grid with the EV rates for that game and multiply by hours played.

Then you simply have to specify what your kelly betting unit is going to be for each 0.5% worth of advantage and what your minimum threshold allowable game is going to be. Your EV estimates should start off fairly conservative and can be adjusted gradually upward or downward annually based on actual results. They should probably never be adjusted up or down by more than 10% each year.

Our team pays based on EV and it's great. You never have a disincentive to play as you always accumulate EV and thus always get paid for your play. Paying based on win/loss gives a lot of incentive for the losing player to just quit leaving the investors stuck...it also gives players who hit a big score early on in the play to just quit and lock up the win. Paying based on EV is fair for all....you just have to be conservative with your estimates.

 

[UK-21]

Just a thought . . . if playing with an investor's cash is going to mean you move up into a new league, betsize speaking, then whatever you agree will need to be sufficient to compensate you for the increased risk of getting a serious busting. That would certainly be my concern here in the UK, where being barred by one of the main-licensee chains will significantly impact on your ability to play BJ, fullstop.

Whatever your remuneration is, it'll be of little reward if you find you can no longer get a game anywhere decent because the combination of your playing ability and bet size is seen to be a risk that has moved into the danger zone.

Good luck.

 

[zengrifter]

N0 is irrelevant if you pay based on EV. You just create a conservative estimate of the EV for each type of blackjack game based on quality, strategy used, and game speed (fast or normal) and then after a session the player would just consult a grid with the EV rates for that game and multiply by hours played.

Then you simply have to specify what your kelly betting unit is going to be for each 0.5% worth of advantage and what your minimum threshold allowable game is going to be. Your EV estimates should start off fairly conservative and can be adjusted gradually upward or downward annually based on actual results. They should probably never be adjusted up or down by more than 10% each year.

Our team pays based on EV and it's great. You never have a disincentive to play as you always accumulate EV and thus always get paid for your play. Paying based on win/loss gives a lot of incentive for the losing player to just quit leaving the investors stuck...it also gives players who hit a big score early on in the play to just quit and lock up the win. Paying based on EV is fair for all....you just have to be conservative with your estimates.

Beautiful. So what's the formula? zg

 

[Sucker]

In order for this to work it requires a quality of fair-mindedness by all parties. It's usually impossible to be able to tell what the EV is going to be going into the play, as the game conditions fluctuate, sometimes wildly. The game might start out yielding an average 10% advantage per hand but 15 minutes later the advantage drops to 3%. Or maybe the dealer happens to be dealing much slower than you had originally estimated. Or one of a million other Murphy-isms.

So;AFTER each individual play is when you sit down with each other and come to an agreement as to approximately how much the expectation was for that particular play.

Obviously, there is a potential for problems with certain people, but believe it or not, it IS possible to attain this sort of chemistry in a team. I've actually had very good luck with it in the past, myself (knock on wood).