Professional gamblers -- and many there are who do make a living at this -- intuitively ana-lyze every proposition in the way described above. Why? It is their business. Now most people are not professional gamblers. So they have a choice whether to be analytical about their wagers or not.

Type I Gamblers

Ever day, visitors arrive in Las Vegas with the idea of taking on the gaming establishment. Some have a bank roll they just intend to “blow.” They play games in which their expecta-tions are negative, and they don’t care. This is money destined for “entertainment expense.” Gaming is no more than a high rent version of skee-ball at the carnival. This is the recrea-tional player, that rare person who buys a lottery ticket for the pure entertainment value in finding out if she’s won. Las Vegas has a number of terms for this sort of player, most of them not complimentary. The least pejorative is probably “the public.”

Type II Gamblers

The other type of gambler is the informed, strategic wagerer. He or she is the source of “the smart money.” People who aspire to be smart money players are earnest. They vow not to make any stupid moves. They consider their bankroll to be an investment, and they want to see a return on it at the end of the day or month or year. They will be unhappy if they lose, net, though they know that on any given wager, they might lose. But just as certainly, they know that in the long run, they will collect more than they pay out because they always play with a “positive expectation” of winning. This “positive expectation” is not an attitude, like a “positive outlook.” It is a mathematical concept that compares the financial aspect of the bet to the real likelihood of a favorable outcome. More of this – much more of this – comes later. In between these two extremes are many intermediate positions. Each person is somewhere on the spectrum. It is a good idea to know where you are (and to know also where your spouse or significant other is), and to feel OK about it, before the games begin.

Bless the Type I Gambler

Before going on, a basic truth needs to be pointed out. Even though Las Vegas jargon calls the Type I player a “Sucker” or possibly a “fan” (when betting loyally for a team even though the odds do not favor it), Las Vegas prospers mainly because almost everyone who visits Las Vegas is in this group. True, some Type I players think they are Type II, or wish they were Type II, but Las Vegas would be much, much smaller if only capable handicap-pers, odds makers and mathematicians were placing bets. So, even if you aspire to be a “sharp” player, and miss, it will be OK. You’re in the vast majority that makes Las Vegas what it is. And if you didn’t over-bet the bankroll, you’re no worse off than you prepared yourself to be. Don’t personalize any of this. Be assured, no one in Las Vegas was cheering for you personally, and no one but you (and perhaps a spouse) will be disappointed if you lost.

Make the Decision about Where You Want to be Between Types I and II

The remainder of this discussion is mainly about that second player, or the part of you that is like that Type II. Decide now why you are gaming. If this gaming outing is a “consump-tion good,” like margaritas or ice cream, decide how much you’re willing to part with to have a good time. (Later on, there will be advice on how to make the money last longer. Even if you are prepared to bust the bank, there are fast ways to do it, which are less fun than the slower ways.) If, on the other hand, this outing is like an “investment good,” like some tool for making money, then more needs to be said about the three elements of the betting proposition: risk, reward and contingency.

Either way, whether the focus is Type I or Type II, all experts agree that a gamer should put aside the money to be used for gaming, and be sure that he or she can afford to do without it. The overall Las Vegas odds do not favor the tourist. How else can Steve Wynn pay $2.7 billion for his new hotel? It is not being amortized out of hotel room rates for a one-night stay.

The practical size of the bankroll will need some more discussion later. It depends a lot on which of the types of bets the gamer wants to make, and for how long. Most of the discus-sion that follows is a treatment of the specifics of each method or mode of gambling, for example, blackjack. But before getting to the specific ways of risking money, it is still necessary to cover a few more principles common to all types of gaming. This will save time later on.

Before Continuing: A Comment on Attitude towards Risk

Mathematicians, gamblers and stock brokers (among other types) frequently bring up the subject of one’s attitude toward risk. The implicit judgment is that one who is “risk averse” should not put a lot of money on a proposition with a small chance of meeting one’s hopes. By implication, a person who is not “risk averse” would be fine with making an investment or bet where the chance of a rewarding outcome is more remote, but the prize for winning compensates for it.

Unlike what one’s intuition might suggest, Type II gamers are risk averse. Type I gamers are not. Why? A seasoned Las Vegas gambler will not knowingly adopt a proposition unless the expectation is positive. He or she knows that in the long run, the net outcome will be a gain. Type I gamers can bet without concern about the long run. If a proposition seems stimulating or fun, what the hey! Let’s put some money on it! This is not risk-averse behav-ior. When casinos adopt a sour attitude about a particular player, it is because that person is playing too sharply, or counting cards, or doing something to reduce the risk of the bets he or she does make. Casinos love the risk-takers. The concept may have some utility in the stock brokerage profession, but it is not really useful for this discussion of gaming in Vegas.

One aspect of self-awareness is worth some attention, though it is not scientific and has much more to do with having a good time than winning at gaming: Everyone should exam-ine his or her comfort levels about the chance of winning or losing (the margin of risk) and the amount on the table or in the pot (the size of the stake). If there is a spouse in the pic-ture, it is advisable also to confer with the spouse as well; otherwise, this may add unnecessarily to both the margin of risk and the amount at stake. In the money management section there is a discussion of being explicit about the minimum bet size, the maximum bet size and the minimum ROI or edge that’s worth chasing after.

Additionally, people sometimes think of themselves as either optimistic or pessimistic. This is worth considering when getting ready to go on a gaming trip, but only in terms of the exact meanings of these terms: A pessimist is someone who naturally sees things as bleaker than they are. An optimist errs on the sunny side of things. The point is that a careful gamer should see things exactly as they are. So if you're an optimist, you may need to make a downward correction in assessing your expectations. A chronic pessimist might benefit from consciously compensating by upping his or her appraisals of likely outcomes.