Expected Value and the Game of Craps

Blake Thornton

Craps is a gambling game found in most casinos based on rolling two six sided dice. Most players
who walk into a casino and try to play craps for the first time are overwhelmed by all the possible
bets. The goal here is to understand what these bets are and how the casino makes money.

1 Probabilities and Expected Values

Expected value is the expected return. We want to know what sort of payoff you can expect when
you place a bet.

1.1 Some Simple Games

Lets say you play a game where you roll a fair die (what does this mean?) and get paid according
to your roll:
Roll Payout
6 $4
5 $2
4 $1
3 $0
2 $0
1 $0
You have to pay $1 to play this game. Is it worth it? What do you expect to happen in the
long run?
Here is how you might answer this:
You roll a 6, 16 of the time, and you get paid $4.
You roll a 5, 16 of the time, and you get paid $2.
You roll a 4, 16 of the time, and you get paid $1.
You roll a 3, 16 of the time, and you get paid $0.
You roll a 2, 16 of the time, and you get paid $0.
You roll a 1, 16 of the time, and you get paid $0.
Sum these up to find the expected value:
           
1 1 1 1 1 1 7
E(X) = 4+ 2+ 1+ 0+ 0+ 0 = ≈ 1.167
6 6 6 6 6 6 6

Thus, you expect to get $1.17 back every time you play, making a cool $0.17 profit.

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 Another way to ask this very same question would be, “how much is the fair price for this
game?” (The answer is, of course, $1.17.)
Another way to answer this question is to use the following chart
Roll Profit
6 $3
5 $1
4 $0
3 $ -1
2 $ -1
1 $ -1
Computing expected value:
           
1 1 1 1 1 1 1
E(X) = 3+ 1+ 0+ (−1) + (−1) + (−1) = ≈ 0.167
6 6 6 6 6 6 6
Again, you see that you expect about a $0.17 profit.

1.1.1 Notational notes

In the first computation, we were interested in the amount of money we would get back in a single
game. Thus, in this case, X was this amount of money and E(X) is the expected amount of money
we get back.
In the second computation, we were interested in the total profit we would make. In this case,
X was the profit. Of course, it would have been nice to have used a different letter/variable for
these things. If we did this and let M be the money from one game and P the profit, then we would
have:
P =M −1

1.2 Some Exercises for You

Determine the expected value for the games.
1. Charge $1 to play. Roll one die, with payouts as follows:
Roll Payout
6 $2
5 $2
4 $1
3 $0
2 $0
1 $ 1.50
2. Charge: $1 to toss 3 coins. Toss the coins. If you get all heads or all tails, you receive $5. If
not, you get nothing.
3. Charge: $1. Roll 2 dice. If you roll 2 odd numbers, like a 3 and a 5, you get $2. If you roll 2
even numbers, like 4 and 6, you get $2. Otherwise, you get nothing.
4. Charge: $5. Draw twice from a bag that has one $10 and 4 $1 bills. You get to keep the bills.

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2 Probabilities Versus Odds
Lets explore this with a roll of a dice. If you roll a dice 600 times, you would expect to see the
number one, 100 times:

(Chances For) 100 1

P (Roll a 1) = = =
(Total Chances) 600 6

Odds on the other hand are given as:

Odds(Roll a 1) = (Chances For) : (Total Chances) = 100 : 500 = 1 : 5

Odds are usually written this way (with a colon).

2.1 Exercises
If given odds, compute the probability. If given a probability, compute the odds.

1. Odds of an event are 1 : 4. What is the probability?

2. Odds of an event are 2 : 5. What is the probability?

3. Odds of an event are 3 : 2. What is the probability?

4. Odds of an event are 10 : 3. What is the probability?

5. Odds of an event are 3 : 10. What is the probability?

6. Probability of an event is 31 . What are the odds?

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7. Probability of an event is 10
. What are the odds?

8. Probability of an event is 43 . What are the odds?

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9. Probability of an event is 17
. What are the odds?

10. Probability of an event is 13%. What are the odds?

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11. Probability of an event is 99
. What are the odds?

3 Probability of the dice

When throwing two dice and summing the numbers, the possible outcomes are 2 through 12. To
determine the probability of getting a number you make the observation that there are 36 different
ways the two dice can be rolled.

Question 1. Compute the probabilities for the sum of two rolled dice.

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 Solution:
To determine the probability of rolling a number you count the number of ways to roll that
number and divide by 36.

Sum Combinations Probability

1
2 1-1 36
2 1
3 1-2, 2-1 36
= 18
3 1
4 1-3, 2-2, 3-1 36
= 12
4
5 1-4, 2-3, 3-2, 4-1 36
= 19
5
6 1-5, 2-4, 3-3, 4-2, 5-1 36
6
7 1-6, 2-5, 3-4, 4-3, 5-2, 6-1 36
= 16
5
8 2-6, 3-5, 4-4, 5-3, 6-2 36
4
9 3-6, 4-5, 5-4, 6-3 36
= 19
3 1
10 4-6, 5-5, 6-4 36
= 12
2 1
11 5-6, 6-5 36
= 18
1
12 6-6 36

4 Craps
In the game of craps there are a wide range of possible bets that one can make. There are single
roll bets, line bets and more. The player places these bets by putting his money (gambling chips)
in the appropriate place on the craps table, see Figure 1.

Figure 1: Craps Table Layout

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4.1 Single roll bets
These bets are the easiest to understand. In a single roll bet the player is betting on a certain
outcome in a single roll.

4.1.1 Playing the field

The most obvious single roll bet is perhaps playing the field. This bet is right in the middle of the
table. On a roll of 3,4,9,10 or 11, the player is paid even odds and on a roll of 2 or 12 the player is
paid double odds. Thus, if $1 is bet on the field and a 3,4,9, 10 or 11 is rolled the player is paid $1
and keeps his original $1. If a 2 or 12 is rolled, the player is paid $2 and keeps his original $1.

Question 2. Compute the expected value of playing the field.

Solution: Here is the expected value of one dollar bet on the field.
7 1 17
E(X) =2 · +3· = ≈ 0.944
18 18 18
In other words, in the long run $1 bet on the field will expect to pay the player $0.944. As we will
see, this is better than some bets but it is not good enough.

4.1.2 C and E
These are the craps and yo bets. In the game of craps a roll of craps is a roll of a 2, 3 or 12. A
roll of eleven is also called a yo. (At the craps table you will hear people calling for a “lucky-yo,”
meaning they want an eleven rolled.)
A player can place a one-time bet on any of these numbers and the payoffs are printed on the
craps table.

Question 3. Fill in the table below.

Roll Odds paid Actual Odds Probability Expected value of $1 bet

1 31
2 30:1 35:1 36 36
≈ 0.861
1 8
3 15:1 17:1 18 9
≈ 0.889
1 8
Yo 11 15:1 17:1 18 9
≈ 0.889
1 31
12 30:1 35:1 36 36
≈ 0.861
1 8
Any Crap 7:1 8:1 9 9
≈ 0.889
1 5
Any 7 4:1 5:1 6 6
≈ 0.833

Notice that the odds paid are printed on the table. So, for example, the odds paid for any seven
is 4 to 1. Thus, if you put $1 down and a seven is rolled this will pay you $4 plus your original bet
(thus you will walk away having “earned” $4).
Note that in this table we introduced the column “Actual Odds.” This is the odds that the
casino should pay in order to be completely fair. In other words, if the casino paid these odds then
the expected value of a dollar bet would be a dollar.

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4.2 The pass line
Line bets are the best example of a multi-roll bet. This means that the bet actually lasts several
rolls—the player does not generally win or lose immediately.

4.2.1 The basic pass line bet

When betting the pass line the player puts his bet right on the pass line, say $1. Then, the first roll
is called the come-out roll. This bet is immediately won if a 7 or 11 is rolled (paid even odds) and
immediately lost of a craps (2,3,12) is rolled. If any other number is rolled then a point is established
and rolling continues until either that point is rolled again (good for the pass-line better) or a 7 is
rolled (good for the casino). Here is a typical sequence of rolls starting with the player putting $1
on the pass line.

Roll Description
3 Come out roll, craps. Player loses $1 and places another $1 on pass line.
7 Come out roll, lucky 7. Player is paid $1 and keep his $1 on the pass line.
11 Come out roll, Yo 11. Player is paid $1 and keep his $1 on the pass line.
4 Come out roll, point of 4 established. No payouts
6 Nothing happens, point is 4.
9 Nothing happens, point is 4.
12 Nothing happens, point is 4.
4 Point is made. Player is paid $1 and keeps his $1 on the pass line.
6 Come out roll, point of 6 is established.
3 Nothing happens, point is 6.
7 7-out. Player loses $1 bet.

Once a point has been established the player wants that point to be rolled and loses if a 7 is
rolled. Just looking at probabilities, it is clear that the player is more likely to win if the point is 6
or 8 and less likely to win if the point is 4 or 10.
Lets compute some expected values. The key in computing the probabilities involved is first
understanding that a pass line bet begins on the come out roll and ends when either the player is
paid or when the player loses. Theoretically, this could take forever (nothing guarantees that the
point or a 7 will ever be rolled). In any case, for the come-out roll, we can say the following:
2
P (7 or 11) = (Player wins)
9
1
P (2, 3 or 12) = (Player craps out, loses)
9
2
P (4, 5, 6, 8, 9, 10) = (A point is established)
3
Once a point is established, we want to compute the probability of that point coming up again
before a seven. This will, of course, depend on what that point is.

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 Lets do the computation for the point 4 (the calculation if the point was 10 is identical). The
player will win if a 4 rolls before a seven. So, a winning sequence of rolls could look like

4 player rolls a 4 right away

oder
3, 6, 5, 8, 4 player rolls something other than a 4 or 7 and then finally a 4

So, the following are the probabilities of winning after a point of 4 has been established.
1
P (4 on roll 1) =
12
3 1
P (4 on roll 2, no 7) =P (not a 4 or 7) P (4) = ·
4 12
 2
3 1
P (4 on roll 3) =P (not a 4 or 7) P (4 on roll 2, no 7) = ·
4 12

Putting all this together, the probability of winning after a point of 4 has been established is a
geometric series:

P (4 before 7) =P (4 on roll 1) + P ( 4 on roll 2, no 4 or 7 before roll 2) + · · ·

   2  3
1 3 1 3 1 3 1
= + · + · + · + ···
12 4 12 4 12 4 12
∞  n  
1 X 3 1 1 1
= = 3 =
12 n=0 4 12 1 − 4 3

Similarly, we can compute the probability of winning other points. (And, included are the
“points” of 2,3 and 12, which are not really points because they are craps.)

1
P (2 before 7) =P (12 before 7) =
7
1
P (3 before 7) =P (11 before 7) =
4
1
P (4 before 7) =P (10 before 7) =
3
2
P (5 before 7) =P (9 before 7) =
5
5
P (6 before 7) =P (8 before 7) =
11
We can now compute our probabilities of winning

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 Event Probability
2
Win with a 7 or 11 on come-out roll 9
1
Lose with 2,3,12 on come-out roll 9
1 1 1


Establish point 4 and win 12 3

= 36
1 2 1
Establish point 4 and lose 12 3

= 18
1 2 2
Establish point 5 and win 9 5

= 45
1 3 1
Establish point 5 and lose 9 5

= 15
5 5 25
Establish point 6 and win 36 11

= 396
5 6 5
Establish point 6 and lose 36 11

= 66
5 5 25
Establish point 8 and win 36 11

= 396
5 6 5
Establish point 8 and lose 36 11

= 66
1 2 2
Establish point 9 and win 9 5

= 45
1 3 1
Establish point 9 and lose 9 5

= 15
1 1 1
Establish point 10 and win 12 3

= 36
1 2 1
Establish point 10 and lose 12 3
= 18

Computing expected values of a $1 bet on the pass lines gives

 
2 1 2 25 25 2 1
E(X) =2 · + 2 + + + + +
9 36 45 396 396 45 36
488
= ≈ 0.98586
495

4.2.2 Laying odds

The pass line has one of the best expected values for your dollar in the casino. But, craps gives the
player another method for increasing your odds. Once a point is established, the player is allowed
to back his bet up with an odds bet, paid off at true odds. What this means is that the expected
value of a $1 odds bet is $1.

5 Playing “Don’t Pass”

In addition to the “Pass line” there is also the “Don’t Pass line” where a player is betting with the
casino. In other words, the “Don’t Pass” player will win when all the other players are losing. This
is true except that the “Don’t Pass line” is actually the “Don’t Pass bar 12” and the player does
not win when on the come out roll when a craps of 12 is rolled.
So, what is the house advantage in this case? We compute expected value of $1 placed on the
“Don’t Pass line.” Notice that our table is essentially the same as before.

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 Event Probability
2
Lose with a 7 or 11 on come-out roll 9
1
Win with 2,3 on come-out roll 12
1
Push with 12 on come-out roll 36
1 1 1


Establish point 4 and lose 12 3

= 36
1 2 1
Establish point 4 and win 12 3

= 18
1 2 2
Establish point 5 and lose 9 5

= 45
1 3 1
Establish point 5 and win 9 5

= 15
5 5 25
Establish point 6 and lose 36 11

= 396
5 6 5
Establish point 6 and win 36 11

= 66
5 5 25
Establish point 8 and lose 36 11

= 396
5 6 5
Establish point 8 and win 36 11

= 66
1 2 2
Establish point 9 and lose 9 5

= 45
1 3 1
Establish point 9 and win 9 5

= 15
1 1 1
Establish point 10 and lose 12 3

= 36
1 2 1
Establish point 10 and win 12 3
= 18

Computing expected values of a $1 bet on the pass lines gives

 
1 1 1 1 5
E(X) =2 · + +4 + +
12 36 18 15 66
217
= ≈ 0.9864
220
Which is slightly better than playing the pass line.

6 Crapless Craps
There is a variation of craps (discovered by the author on a recent trip to a casino) called “Crappless
Craps” or “No More Craps, Craps.” What this means is that the craps and yo are all done away
with on the come out roll. Instead, the 2,3,11,and 12 are valid points just like the 4,5,6,8,9 and 10.
The odds bets for these are also paid off at true odds. This looks like a good thing because there
are less ways to lose on the come-out roll.
We now compute some probabilities and expected values.

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 Event Probability
1
Win with 7 on come-out roll
6
1 1 1
Establish point 2 and win 36 7

= 252
1 6 1
Establish point 2 and lose 36 7

= 42
1 1 1
Establish point 3 and win 18 4

= 72
1 3 1
Establish point 3 and lose 18 4

= 24
1 1 1
Establish point 4 and win 12 3

= 36
1 2 1
Establish point 4 and lose 12 3

= 18
1 2 2
Establish point 5 and win 9 5

= 45
1 3 1
Establish point 5 and lose 9 5

= 15
5 5 25
Establish point 6 and win 36 11

= 396
5 6 5
Establish point 6 and lose 36 11

= 66
5 5 25
Establish point 8 and win 36 11

= 396
5 6 5
Establish point 8 and lose 36 11

= 66
1 2 2
Establish point 9 and win 9 5

= 45
1 3 1
Establish point 9 and lose 9 5

= 15
1 1 1
Establish point 10 and win 12 3

= 36
1 2 1
Establish point 10 and lose 12 3

= 18
1 1 1
Establish point 11 and win 18 4

= 72
1 3 1
Establish point 11 and lose 18 4

= 24
1 1 1
Establish point 12 and win 36 7

= 252
1 6 1
Establish point 12 and lose 36 7
= 42

Computing expected value of a $1 bet in on this pass line.

 
1 1 1 1 2 25
E(X) =2 · + 2 · 2 + + + +
6 252 72 36 45 396
6557
= ≈ 0.946176
6930
Amazingly, this makes it a worse bet than regular craps, by a substantial amount. Also, the casino
will not allow a player to play “Don’t” (why not?).

7 How fast will you lose money?

Here are some estimate to help compute this. Over an hour, we can expect about:

• 112: dice rolls (observed, info from Internet)

• 11: points to be established

• 2: craps on come out roll

• 4: 7 or 11 on the come out roll

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7.1 Pass line player
Basically, this means that if you are betting on the pass line then every hour you will place around
17 bets. If you are making $100 bets then this means you will have placed $100 on the table 17
times and on you will receive $98.59 back from these bets. In other words, in an hour you will have
lost only about $23.97.

7.2 Field player

Over an hour, the field player will make about 112 bets and, if playing $100 a bet then the field
player should receive $94.44 from every bet. This means that this field player will lose about
$622.72.

7.3 How to minimize your losses?

There are clearly some bad bets, such as the field (and, the field is not even the worst bet). So,
first thing to do is to not play the bad bets.
When playing the pass-line, the house edge is only about 1.41%. If you play with odds and
place as many odds behind your bet then you can expect to decrease the house advantage. The
more odds you place on your pass-line bet the more you decrease the advantage that the house has.

7.4 Pass-line with odds

Here we assume a player places a pass-line bet of $1 and then, when a point is established, places
an odds bets behind the pass-line. Most casino’s limit the amount of this odds bet and 10× is a
high amount. What this means is that if your pass-line bet is $1 then your odds bet can be at most
$10. Here are the payoffs on such a bet if the number is hit.
Point Bet Payout
4 1 + 10 1 + 20
5 1 + 10 1 + 15
6 1 + 10 1 + 12
8 1 + 10 1 + 12
9 1 + 10 1 + 15
10 1 + 10 1 + 20

So, if the point is 4 and that point is hit then the player would have $1 on the pass-line and $10
for odds. The player would be paid $1 for his pass-line bet and $20 for his odds bet.
How do you compute the house advantage now?

7.5 Methods to win?

I found these on the Internet:

• http://casinogambling.about.com/cs/craps/a/5count.htm

• http://homepage.ntlworld.com/dice-play/CrapsSystems.htm

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As one Internet site said, “There are NO winning systems for Craps that work!” It is instructive
to see if you can figure out what is wrong with these systems.

7.5.1 The Craps 5 Count Method

The 5-Count method for finding hot shooters and reducing a player’s overall risk at the
craps table starts with a point number (the “point numbers” are 4, 5, 6, 8, 9, or 10) and
ends with a point number. Let’s take it step by step.
A new shooter has just received the dice and is on his come-out roll. If he rolls any of
the point numbers on his come-out roll, that constitutes the 1-count. If he rolls a 2, 3,
7, 11, or 12 on the come-out, the count has not started yet.
The second roll after the 1-count is automatically the 2-count, regardless of what number
is rolled, and this applies to the 3-count and 4-count as well.
The next roll after the 4-count is the 5-Count only if the number rolled is again one
of the point numbers above. If not, it is the 4-count and holding until the 5-Count is
achieved. When the 5-Count is achieved, you then begin to place money at risk. You
can make a come bet or make a place bet.
If you usually make three come bets you can actually make your first come bet after
the three count. You would then make your second come bet after the four count. You
don’t take odds on your come bets until after the five count. At this time you would
also make your third come bet.

7.5.2 The Martingale or Rothstein System

Bet 1 unit on the Pass Line. If you lose bet 3 units (double your bet plus 1). If you lose
again bet 7 units (double your bet plus 1) and so on. Sooner or later you must win and
you will be up. If you win then start betting again from the 1 unit up.

7.5.3 The Patience or Watching System

Wait until the dice pass four times and then put $4 on them losing on the fifth roll. If
you lose, put double your bet ($8) on them losing on the next roll and so on until you
win.

7.5.4 The Hot and Cold System

This system says you will win when the dice are hot and win when the dice are cold.
You bet on the dice to win when the shooter makes a pass. You continue to bet on the
dice to win until a losing through occurs and then you switch your bets on to “Don’t
Pass.” You simply switch when the dice are having a hot run and back again when the
dice have a cold run.

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7.5.5 The Place Betting System
A big time gamblers system which has even deceived some Craps operators. You place
the maximum limit (although it can be less) on all of the six place bets: 4, 5, 6, 8, 9
and 10. If the limit is $200 then this makes a total of $1,200. As soon as one of these
bets is won you collect on it and call off the remaining five place number bets. Yes,
most casinos allow you to call off place number bets at any time. The theory is that
the bettor has six numbers against the house’s one, the 7. There are 24 ways to make
the place numbers and only 6 ways to make a 7 so the odds are worked out as 4 to 1 in
favor of the gambler with the system.

7.5.6 The Right and Wrong Way System

In this system you place your bet (say $60) on the “Don’t Pass” line before the come
out throw. The shooter is then supposed to throw a point on the come out roll, either
4, 5, 6, 8, 9 or 10. You then put $60 on the points place number. The idea is if the
shooter doesn’t throw the point you have still won on the “Don’t Pass” bet and you
are still even. You’ve lost $60 on the place number but won $60 on Don’t Pass. If the
shooter makes his point you lose $60 on the Don’t Pass but your up by between $48 and
$10 depending on which place number it is.

8 More Probability and Expected Value Challenges

Question 4. Suppose you roll a die and receive the number of dollars that you roll. What is the
fair value to play this game?

Question 5. If you flip a coin twice, what the probability that it will come up heads each time?
What if you flip the coin 3 times? n times?

Question 6. Suppose we play a game in which you flip a coin until a heads comes up for the first
time. What is the probability that the first heads will come up on the first flip? Second flip? Third
flip? What about the nth flip?

Question 7. Play a game where you flip a coin until you get a heads. If the first heads comes up
on the k th flip, then you win 2k dollars. So if you get H on the first try, you win $2. If you get T
and then H, you win $4. If you get TTTTH, you win $32.
What is the least amount of money a player can win in this game? What is the most? How
much would you be willing to pay to play this game? What is a fair amount to pay to play this
game?

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