Humans and not very good at calculating odds and how probabilities work. For instance, if we are tossing coins and we get six heads in a row, the probability of getting yet another head is still fifty-fifty. Yet people feel that after a series of heads that it is more likely that more tails than heads will turn up for a while, so that the ratio of heads to tails returns to the expected one to one ratio.

But the expected ratio of heads to tails for all subsequent tests is one to one. It’s as if a new set of tests is being started, and so any lead that has already built up is, in all probability, not going to be reduced.

This seems odd. If we have done one thousand trials and have turned up 550 heads to 450 tails, the ratio of heads to tails is about 0.818 and the ratio of heads to the number of tests is 0.55. Surely more tests will take the ratios closer to the expected values of 1.0 and 0.5? Surely that means that there will be more tails than heads in the future?

Embed from Getty ImagesWell, the answer to both questions is no, of course. The ratios for the whole test may move closer to 1.0 and 0.5, but equally, they may move further away. In the extreme case, there may never be a tail again. Or all the rest of the throws may result in tails.

Interestingly, if the subsequent tests produce a series of heads and tails, the difference between the number of heads and tails stays at around 100, but the ratio of tails to heads for the whole test slowly creeps closer to 1.0 and the ratio of heads to the total number of tests closes in on 0.5 as more and more trials are done. By the time we reach two million tests, the two numbers are not very far from the expected values, being 0.9999 and 0.5000 respectively.

So, if you think to yourself, as you buy a lotto ticket “Well I must eventually win, if I keep buying the tickets”, it doesn’t work like that. You could buy a lotto ticket forever, literally, and never ever win. Sorry.

Embed from Getty ImagesLotto and sweepstakes are, I believe, a different type of gambling from other forms, such as betting on horses or poker and other gambling card games. Lotto, sweepstakes and raffles involve no element of skill, and the gambler’s only involvement is buying the ticket. Betting on horses or cards involves skill to some extent, and that skill comes down to things like working out the probabilities of a particular card coming up and the probabilities of other players having certain cards in their hands.

Both types of gambling encourage the gambler to gamble more. If a gambler doesn’t win on the Lotto he or she might say to his or herself “Better luck next time.” Of course, luck does not exist, but probabilities do, and this is a mild form of the Gambler’s Fallacy described above. Nevertheless, people do win and the winners appear on television for us all to see and emulate.

Embed from Getty ImagesThere’s two sorts of strategy for winning the Lotto. First there’s the “always use the same numbers” strategy, and then there’s the “random numbers” strategy. If you always use the same numbers, goes the theory, then eventually there must be a match. That’s wrong of course, since the number combination may not appear before the end of the universe.

The random number strategy argues that there is no pattern to results so it is silly to expect a particular pattern to eventuate. This strategy acknowledges the random nature of the draw, but doesn’t give the gambler any advantage over any other strategy, even the same numbers strategy. It is certainly easier to buy a randomly generated ticket than to fill in a form to purchase the same numbers every time.

Embed from Getty ImagesSome people experience a run of luck. They might have three things happen to them, so go and buy a lotto ticket while their luck holds. Then is they win they attribute it to their lucky streak. It’s all nonsense of course. They conveniently forget the many, many times that they bought a ticket because of a lucky streak, only for the ticket to be a loser.

The proceeds from the sales of lotto tickets don’t normally all go to holders of winning tickets. Firstly the operators of the system need to recoup their costs. It’s not cheap to own and operate those fancy machines with the tumbling balls and it also costs to employ the people to check that the machines are fair.

Embed from Getty ImagesIf one of the balls is dented, will that affect the probability of that ball being selected? Maybe, just a little, but the draw should be fair so those providing the lotto equipment spend a large amount of effort to ensure that they are fair, and the costs of that effort must come out of the prize funds.

Secondly, the state or maybe the lotto organisation itself will often withhold part of the lotto sales takings for local or national causes, such as cancer research, or societal things, like the fight against teen suicide. The money for humanitarian causes is deducted from the prize funds.

Embed from Getty ImagesOne of the humanitarian causes is often the fight against problem gambling. It’s ironic and somewhat appropriate that funds from gambling are used to combat problem gambling. It seems that some people get such a thrill from gambling that they use all their, then borrow or steal from others to continue to gamble.

They invoke the Gambler’s Fallacy. They suggest that their luck must change sooner or later. It doesn’t have to, and may never change, but they continue to spend money on their gambling. They also don’t take account of the fact that they might win, eventually, by sheer chance, but it is unlikely that their winnings will cover what they have already gambled away. They have a tendency to believe that one big win will sort things out for them. It won’t of course.

Embed from Getty ImagesSo, the only true fact about Lotto and similar draw is that you have to be in to win. But just because you are in doesn’t mean that you will win. You probably won’t. The best way to treat Lotto and other similar games is that you are donating to a good cause and you might, but probably won’t get something back. So, I’m off to buy a lotto ticket. I might win thirty million dollars, but I won’t cry if I don’t.

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