The "surrender" rule is the most misunderstood rule in blackjack. The word itself has a negative connotation amongst players, and their opinion of the surrender rule goes something like this: "I mean come on, aren’t you supposed to WIN your hand when you play blackjack, not SURRENDER it?"

It turns out that using the surrender rule properly is actually a very smart play to make on some hands compared to an alternate play of, say, hitting or standing. And that’s the point of my article this month: to explain the surrender rule that is offered in casinos in the U.S. and abroad (the strategy is slightly different), and to show the correct playing strategies for both.

The surrender rule was first implemented in the Philippine casinos in 1958. It more or less became a standard rule in Asian casinos, and more casinos abroad and in the U.S. offer this playing option to players.

For the uninitiated, surrender works like this: After comparing your initial two-card hand against the dealer’s upcard, if you think your chance of winning the hand is not good, you can forfeit playing your hand and surrender (or give up) half of the amount of your wager. In some casinos, you must verbally announce to the dealer that you want to surrender your hand by just saying, "surrender." Other casinos have implemented a hand signal for surrender, which is to draw an imaginary line from left to right on the felt with your finger. Either way, if you decide to surrender your hand, the dealer will remove half of your bet then scoop up your initial two cards and place them in the discard tray. Essentially, when you surrender, you forfeit your hand and half of your bet before drawing any more cards.

There are two types of surrender. In the U.S. casinos, the surrender option is known as "late surrender." This is because you can only surrender your hand after the dealer peeks at her hole card when she shows an Ace or a ten, to determine if she has blackjack. If she has blackjack, the surrender option is no longer available, and you will lose your entire bet (unless you also have a blackjack).

Another type of surrender is known as early surrender. This option is rarely offered in U.S. casinos and is more prevalent in European and Asian casinos where dealers do not take a hole card until after all players have acted on their hands (so-called European no-hole-card rule). With the early surrender option, a player can surrender his hand to a dealer’s Ace and/or ten-value upcard before she checks to determine if she has a blackjack. Early surrender is a much more favorable rule for players than late surrender. (Early surrender against the Ace, gains you 0.39 percent, and against the 10, it’s 0.24 percent, for a six-deck S17 game.)

The mathematics of surrender is pretty straightforward. You should surrender a hand when your chance of winning is less than one out of four hands (i.e., your expected loss is worse than 50%). This means that statistically, if playing the hand has less than a 25 percent chance of winning (and consequently greater than a 75 percent chance of losing), you will save money in the long run by surrendering the hand instead.

The basic playing strategy for late surrender in multiple-deck games where the dealer stands on soft 17 can be summarized in the following two rules:

1. Surrender hard 16 (but not 8,8) against dealer 9, 10, or Ace upcard.
2. Surrender hard 15 (but not 8,7 unless 8-deck) against dealer 10 upcard.

(See Table 1 for the complete late surrender playing rules for single-, double-, and 4-, 6-, and 8-deck games.)

The basic playing strategy for early surrender in a multiple-deck game (S17) is different than the strategy for late surrender. When early surrender is offered, you should surrender these hands:

1. Against a dealer Ace, surrender hard 5 to 7 (including 3s), and 12 to 17 (including 6s, 7s, and 8s).
2. Against a dealer ten, surrender hard 14 to 16, including 7s and 8s.
3. Against a dealer 9, surrender hard 10-6, and 9-7 (but not 8s).

Note that in some European and Asian (especially Macau) casinos, you can only surrender against a dealer’s ten upcard (not against the Ace).

When you use late surrender correctly, it will reduce the house edge by about 0.07 percent in multiple-deck games. That doesn’t seem like much but everything you can do to reduce the house edge is a step in the right direction. Surrender also has this benefit: it will stabilize your bankroll (meaning surrender will flatten the fluctuations in your bankroll) compared to a game where surrender is not offered and you have to play all your hands to completion.