Most of you are total degenerates like me, so I’m going to assume you’ve sat down at a blackjack table or two at some point during your life. If so, you’re familiar with the dealer offering you insurance when he/she could potentially have blackjack.
And you presumably always say no because the math isn’t in your favor. The house is taking a little bit more than you’d lose over the long run if you just play out the hand. That’s how insurance works, so from a strict EV standpoint, it’s never “worth it” for you to have insurance. The casinos and insurance companies need to make money somehow, right?
But that doesn’t mean all insurance is 먹튀 bad. Most people are in agreement that some form of health insurance is a positive. Why? What’s different between health insurance and insurance in blackjack?
Well, the downside of losing one hand of blackjack is 1) known, with the money already being wagered and 2) not very large. Now compare that to health risks, which can be unknown and substantial in nature. You can go bankrupt from a serious health problem, but, unless you use a David
Choe style blackjack play, you don’t possess the same type of downside from a single hand of blackjack.
Health insurance works not because it is +EV, but because it substantially limits your risk or ruin. Because of that, it’s worth it to “overpay” for some types of insurance, to an extent, because you can reduce the fragility of your wealth and overall wellbeing.
A similar phenomenon exists in daily fantasy football, where many shrewd users pay top-dollar for quarterbacks in cash games, even if those players aren’t the best values in terms of strict dollars-per-point. The reasoning for that is because quarterback is the most consistent position in football, paying for an elite passer can almost act as an insurance policy; it helps to increase the floor of your lineup, with the hope being that it outweighs any reduced upside (the result of technically forgoing some level of value).
Improving DFS Win Rates
I’m a really big believer that you can improve your NFL profitability simply by understanding weekly variance and structuring your lineup in a way that reflects what you want to accomplish. Specifically, you should be trying to widen or narrow the range of potential outcomes for your team, dependent on the league type in which you’re participating.
The numbers show that allocating a high percentage of your DraftKings salary cap to quarterbacks and running backs, for example, can help you win cash games. Those two positions are the most consistent, so by spending big for production on which you can count, you’re narrowing the window of possible scores for that lineup.
To demonstrate why that’s smart in cash games, here’s a (completely hypothetical) sample probability of NFL scores on DraftKings.