As the dealer lays down your second card, a smile grows across your face. You just got blackjack. A moment later your smile fades. The dealer has an ace showing. She calls out for insurance bets. Before the dealer checks the hole card, she makes eye contact with you, awaiting your decision. The player next to you advises, “I would take it. Even money is the smart move. ” The dealer agrees. “Always take insurance when you have blackjack. It’s a sure thing.”

To take insurance or not take insurance. It’s a decision that becomes tougher for players when they have a good hand, particularly blackjack. The more money on the line, the more likely players are to take insurance. This is where players go wrong. Insurance is not a wager you should take to “protect” your original bet. It is striclty a side bet on whether or not the dealer has a ten or face card in the hole. Players can insure their bets by placing an amount up to half their wager in the insurance area on the table. If the dealer does have a ten or face card in the hole, the bet pays off 2 to 1.

Let’s break down the expected win of insurance for a 6-deck shoe. When the dealer shows an ace, the odds she will have blackjack are 96/311. There are 96 ten-value cards in a 6-deck shoe and there are 312 total cards in a 6-deck shoe (52 x 6). Not counting the ace showing there are 311 cards remaining. There is a 96/311 chance that the dealer will flip over a ten or face card and pay off insurance bets 2 to 1. There is a 215/311 chance that the dealer will not have blackjack and all insurance bets will lose.

Based on a $100 bet, here is how the expected win works out.

(96/311) x ($200) + (215/311) x (-$100) = $(19200/311) -

$(21500/311)

$(19200/311) – $(21500/311) = -$(2300/311)

= -$7.395

Over the long run, for every $100 you wager on insurance you can expect to lose $7.395 . The insurance bet has a 7.395% house edge. To put this in perspective, the house edge on insurance is more than 14 times the edge versus a basic strategy player, playing at a .5% disadvantage. This is why one of the cardinal rules of basic strategy is never take insurance. So the next time someone tells you to take even money, remember, the only sure thing about insurance is that it will cost you a pretty penny over the long run.

Blackjack: What are the Odds?

Basic strategy is the best way to play your hand versus the dealer’s up-card. For each and every possible hand, there is one and only one correct play. Regardless of whether you’re a professional card counter or a recreational gambler, basic strategy is your best friend. The first requirement for every new recuit on the MIT Blackjack Team was learning basic strategy. It’s comforting to know that brilliant mathematicians derived this optimal playing strategy. There’s no need for any guess work or analysis on your part. All the work has already been done for you.

What does basic strategy do for you in terms of dollars? The house edge over any given player can vary because blackjack is a a game of skill. The average blackjack player is at about a 2.0 % disadvantage to the house. Assuming a rate of 60 hands dealt per hour, it costs the average $25 bettor about $30 an hour to play.

Expected hourly loss = Avg Bet x Hands/Hour x House Edge
Expected hourly loss = $25 x 60 hands/hr x 2.0 % = $30

If you learn basic strategy and play it consistently, the house advantage drops to about .5 %. Look what happens to the expected hourly loss.

Expected hourly loss = $25 x 60 hands/hr x .5 % = $7.50

For a $25 bettor, basic strategy results in a savings of $22.50, and that’s just for one hour of play. If you bet more than $25 a hand, you’re savings will be proportionally larger. Basic strategy reduces a player’s expected loss by 75% which means the average blackjack player pays 4 times as much to play as a basic strategy player. That’s equivalent to paying $8.00 a gallon for gas when you could easily pay only $2.00 a gallon. If you’re not playing basic strategy, you’re paying a very steep price.

There’s no reason or excuse for not playing basic strategy. Not only can you dramatically improve your odds to nearly break even, the next time you have a 12 and dealer is showing a 3, you will know with 100% certainty that the correct play is to hit. No more angst or hesitation over what to do. A great reference for basic strategy is Blackjack Info’s basic strategy engine. To help perfect your play, my joint venture, the Blackjack Institute offers a free, online basic strategy trainer which provides instant feeback on your play.