Gambling

Gambling has probably been a human activity since two cavemen had a bet over their respective hunting prowess. Or maybe it was over which of them could stay upright longest after sampling the newly invented alcoholic grog. Gambling games generally have probabilistic component, though the contestants generally try to remove or circumvent it, usually by such techniques as remembering the order that cards come out or ‘card counting’. This latter technique involves keeping track of the high cards that come into play.

For some people gambling can become a problem. Sometimes susceptible individuals can become ‘addicted’ to gambling to the extent that they embezzle and steal so that they can continue to gamble. They may rationalise this by claiming that they are only trying to regain what they lost, or repay the people who they have stolen from, and indeed, because of the probabilistic nature  there is a chance that they might be able to do that. However the chance is very very small.

When a gambler starts gambling the reason that they gamble is the thrill of the possibility of winning big. Once the gambler has used up all his or her resources and has borrowed or stolen to keep gambling then the fear of losing and the fear of people finding out would be the predominant emotions, especially the fear of being found out.

They probably think to themselves that their luck must turn sooner or later and they must start winning, however this is just not true. Suppose the gambler is $100,000 in debt and chooses odds of evens. Then to win $100,000 he or she must wager $100,000 and to do that he or she would have to steal another $100,000. Such a theft is more likely to be noticed than a smaller amount and there is an even chance of losing and being $200,000 in the hole.

As a result, it is likely that a ‘problem gambler’ would choose to go for longer odds and therefore smaller amounts of stake money, but with less chance of winning.

Statistically, over a large number of gamblers and a large number of wagers on something like a horse race, if all the money taken on wagers is paid back to punters then the average return, over all punters taking into account the stakes and the winnings paid out, is exactly zero! Of course, not all the money taken in in bets is paid to the punters. If the bets are on a totalizator system then the organisation running the ‘tote’ takes out taxes and administration costs so the payout will be less than the amount taken in.

If the system is a ‘bookmaker’ run system then the bookie needs to cover his costs so he (or she) arranges his books so that not all the money taken in bets is returned to the punters. There is a very small chance that under some circumstances he cannot cover all the bets made, but it is rare for this to happen. A bookie will sometimes ‘lay off’ a bet somewhere else if he feels exposed as a result of a large bet.

What this means to the gambler is that, on average, he is going to get back from the system less than he puts in. What a gambler hopes is that his personal return is positive, and he will in fact beat the odds. It is highly likely that he won’t though. A ‘problem gambler’ is unlikely to be a clever gambler and is likely to continue to lose.

Lotteries are different. Although Lotto is referred to as gambling, it is different from card games like poker or betting on horses. Again the average return is going to be zero or negative. However, with a lottery, the only way to increase your chance of winning is to buy more tickets. There is no real or illusory skill involved. As a result the lottery is unlikely to attract the ‘problem gambler’.

Of those who do take part in the lottery there are some who fall foul of the “Gambler’s Fallacy”. Some people use the same numbers draw after draw after draw in the belief that their particular set of numbers must come up sometime. This is not so at all. It doesn’t do any harm, though, as their particular numbers are just as likely to come up in one draw as any other. In fact, if their numbers do come up, they are equally as likely as any set of numbers to come up the next week too.

I confess that I don’t see much sense in betting on horses or dogs or whatever. I don’t have the skills necessary to increase the odds in my favour, though the so-called ‘professional gamblers’ appear to have those skills, and ‘problem gamblers’ definitely don’t.  I do buy lotto tickets, though, but I’m not too upset when I lose and the rare small win is fun.