Blackjack Fundamentals: Kelly Criterion
Card counting isn't the only important part of the ever famous game of blackjack. Knowing what the odds are remains only a part of the overall strategy as you also need to take advantage of this knowledge to further maximize your profit. Most blackjack players know this, but often forget to verbalize or even consciously follow it. Part of being a blackjack player is knowing how to do so consistently and to do that, you need the Kelly Criterion.
Generally, this Kelly Criterion is a strategy that allows players to maximize the potential profit of a hand in a round of blackjack and of course, betting accordingly. Risks are taken into account, as the criterion is simultaneously aggressive and defensive, always capable of minimizing risk should it be followed properly. Card counting it is not - it actually requires it to make full use of what happens when a card counter successfully applies their tactics. If the house naturally has the edge, such as in 6/5 systems, it's reliability drops.
Simply put, the Kelly Criterion is a formula or a form for long term money gain. Short term players can't use it as well, leaving this particular weapon as a more powerful weapon for the consistent and persistent player. Determining just how much the current hand or round is worth is unbelievably invaluable at the blackjack tables. It helps you figure out whether the juice is worth the squeeze. Whenever you put more on the line when you have the advantage, you're applying the Kelly Criterion.
John Larry Kelly was the creator of the system. It was created in Texas and was born out of a necessity to mathematically create investing techniques and strategies, using numerous ideas, theories and probabilities. Since gambling is a sort of short term investment, it became a natural fit. The Kelly Criterion as it stands is now a huge part of game theory, firmly putting John Kelly into the history books and the hearts of many gamblers.
It has no real drawback. To say that it is weak because it does not guarantee ultimate and consistent success would be foolish, as there is nothing to assure that. All this does for a good blackjack player is to make sure that when they win, they win big. There are other weaknesses to it however - the system is explosive in that swings in chip size tend to be huge. Systems have been developed to counter this weakness and they are often called the Half Kellies.