You hold a natural; the dealer shows an ace. Before checking the hole card the dealer offers you even money: a guaranteed 1:1 now, rather than 3:2 if the dealer does not also have a blackjack and a push if the dealer does. It feels like locking in a win. It is a side bet with a price.
Declining is worth 1.0388 units; taking even money is worth exactly 1. On a six-deck shoe, with your ace and ten and the dealer's ace removed, 95 of the 309 unseen cards are tens, so the dealer completes a blackjack 30.74% of the time. The other 69.26% of the time you are paid 3:2. That is 1.5 × 0.6926 = 1.0388 units on average, against the 1 unit even money hands you. The offer costs 3.88% of your bet.
The reason it is insurance in disguise: taking even money is exactly the same outcome as insuring your natural for half your bet. Both settle you at 1:1 whatever the hole card. So the case against it is the case against insurance. The side bet pays 2:1 on an event that happens less than one time in three, and the shortfall is 6.80% of the insurance stake on six decks. On half a bet that comes to the same 3.88% of the hand.
The only reason to take it is variance you cannot afford, not expectation. On a single deck the figure moves, because removing three cards from 52 matters more than removing them from 312, and a card counter with a ten-rich shoe can find spots where the offer is correct. For everyone else, at every ordinary table, the answer is no.
Where the numbers come from
Related terms in casino floor
- Insurance, The side bet offered when the dealer shows an ace. Every source calls it a bad bet; this one gives the figure, and it changes with the number of decks.
- Natural, A hand that wins immediately on the first cards dealt.
- Hole card, A card dealt face down and seen only by its holder. In blackjack it is the dealer's hidden card; in hold'em it is the two cards that make your hand yours.
- Upcard, The dealer's one face-up card. It is the only thing you know about the dealer's hand, and it moves the dealer's bust chance from 16.65% to 42.32%.
Where an entry quotes a number, that figure comes from the computed sections of this site rather than from another glossary, so the definition and the derivation cannot drift apart. Each entry links to the page where the number is worked out.