Is Gambling for Idiots?

[roger]

completely true....but how do these machinese pay out? if it's by cash, then surely there would be a point for which the machine had insufficient funds to cover a jackpot. How does this effect things?

It's all electronic these days. You get a slip of paper that you take to the cashiers. In the old days, a bell would ring, an attendent would come over, and give you the money. Actually, I think you get the attendent regardless on large wins, because they want to give you a free room, etc., in an attempt to keep the money in the casino. If you walk out the door, they lose the money. If you stay, you'll almost certainly gamble it away.

 

[hgc]

If the House doesn't know what it is doing, then the odds in blackjack are stacked in the favor of the player. This is, of course, a very rare thing to happen in a well-established casino but you might encounter such a game some day.

A friend of one of my acquitances once spent his summer holiday living in a ferry traveling between Helsinki and Stockholm, playing black jack for 3-5 hours every night. He earned enough money to pay for the tickets and food with about as much money left over that he would have earned in a regular summer job.

His method: card counting.

The black jack table in the ship was (at least at the time) run in a way that made card counting possible and profitable. Even with his gouging, the table probably made profit for the operator since 95% of those who play in those night club tables are drunk. One of my friends worked as a black jack dealer for a couple of years and he told that he regularly enocuntered players who were drunk enough to hit on 19.

What was this casino doing wrong? Not enough decks in the shoe?

 

[andyandy]

It's all electronic these days. You get a slip of paper that you take to the cashiers. In the old days, a bell would ring, an attendent would come over, and give you the money. Actually, I think you get the attendent regardless on large wins, because they want to give you a free room, etc., in an attempt to keep the money in the casino. If you walk out the door, they lose the money. If you stay, you'll almost certainly gamble it away.

ok that makes sense - thanks for that

 

[LW]

What was this casino doing wrong? Not enough decks in the shoe?

Probably. I don't know exact details. I probably should ask that friend of mine who was a dealer if he happens to know about it.

Anyway, it was not a full-fledged casino. It was a single black jack table in a corner of a night club. They are quite common here and they usually are opened so late that the majority of prospective players are already drunk enough to play stupidly.

 

[Ceritus]

I played alot of blackjack. Once I won 19 hands in a row and I started doubling up on the 4th hand. I ended up walking away with about $3500 but then again I have once lost 26 hands in a row and ended up losing about $3000. The game has too many ups and downs so I decided to give it up. I ended up giving it up while I was WAY down and I am still paying back all the loan sharks and banks and creditcards years later but I am just about out of debt! 9 more months baby!

 

[Ceritus]

And what happens before that time period does not affect the period. It doesn't matter if it hit before you played or had a run of not hitting, it is never due. The odds of you hitting in the time you play are always the same for a given machine.

In both the slots and roulette it is a mistake to look at its history and think that it will change the odds for the future. It is the same mistake in probability.

I beg to differ. Roulette tables can have a bias to certain numbers over time simply because they are not built perfect.

 

[American]

They are only idiots if they believe they'll eventually win or break even, which most don't reallly believe that.

 

[Foolmewunz]

Back in the 60's when the first card-counters were honing their skills, one of them showed up on I've Got a Secret, his secret being that he was the guy who caused Vegas to change the house rules (going to multiple decks in the shoe to make counting harder).
To spice up the show, they sent Henry Morgan to either the Bahamas or Bermuda (or other island with casinos) to try the system, since they hadn't changed the house rules yet. He was rather fond of cards. His report: I was winning a bit, but it was boring so after a few hours I went back to my own methods and lost the bankroll.

The moral of the tale: If you're playing for fun, enjoy yourself. If winning is just hard work and bores you, why are you wasting your recreational time?

We can't dismiss gamblers as idiots. There are lots of professional gamblers out there, after all. If you play a system and try to do it for a living, it's your job, and as someone mentioned above on the vidpoker players, you have to be disciplined and it probably begins to seem like work (eeek!). There are professional gamblers who make a living out of the game - some better than others, but most I've heard discussing the topic seem to say that the "ups" aren't so "up" - they expect to win often enough to making a living, after all. But the other side of that is the "downs" can be really bad. You have to be pretty tough to take it. I think that's why most professionals seem to be rather stoical(rash generalization - I know). It's just a living with a highly irregular payday.

So, before we tag it as idiotic, the criteria should be whether the person can afford the loss and/or is being suckered by either false advertising or their own faulty logic ("Someone's got to win. Might as well be me.)

If I would spend a three hundred bucks on dinner, drinks, and the theater or a concert, I'm content to blow the same amount in Macau for six or seven hours of blackjack, assuming I play smart and can stretch it over that time (I can, generally). But if that's a quarter of my rent money and I'm off to the casino to make the rest, then I'm just an idiot, at best. Worse, though, I'm possibly a bit ill. No one's mentioined that yet - there are serious gambling addicts out there who've destroyed lives - their own, their families', their friends'.

 

[Hawkeye]

True only if you are looking at it in terms of expected $ return. Possibly different if looked at in terms of expected utility (utility defined as it is for economic theory): Impact on my life of spending a buck once or twice a year = 0 (utility, not dollars). Impact of winning $30,000,000 = huge, gigantic, immense, life-changing (again, utility). So the expected utility may be positive (for me) even though the expected dollars is negative.

Utility shmutility.
You can’t just look at the “impact,” you must consider the odds. Let’s play a game. I’m going to flip a coin 1000 times. If it comes up heads every single time you win $100 million, or else you lose 1$. Will you play? Think of the utility!

The fact of the matter is that you’re better off saving or investing that dollar somewhere else. Better yet, give it to someone who needs it more than you. Sure 1$ is somewhat useless (to you) right now, but if you continue playing the lottery (as many people do)... it will add up over a lifetime. Think of the big picture. An average person might buy 1000 lottery tickets over 50 years and not think twice about it. However, this person would probably be hesitant to risk $1,000 on the same slim chance that they might turn it into 100 million.

If you want to talk about utility as a measurement of happiness, I think most people would be happier keeping and spending their $1,000 rather than gambling it on a ridiculous long shot and almost certainly losing it all.

Stir said something correct about utility.

for most people won't see multimillion dollars unless they play the lottery.

True, but the great-grand-uber-omega-overwhelming majority of people who play the lottery will never win the big one. Just remember, behind every person who hits a jackpot there’s a couple of million of schmucks handing him their 1$.

 

[rockoon]

On the lottery:

You folks have neglected the progressive jackpot nature of most lotteries. It is common for the progressive lottery to be offering positive EV to its players.

On the slots:

If you think the random number generators in slot machines are weak, think again. These things have periods so long that it will take a trillion lifetimes of constant play just to see a tiny fraction of their period. The universe will be a frozen maximum entropy wasteland long before you could cycle through the entire period.

On the stock market:

If you can avoid taxes, you might be able to find a good bet or two.

 

[The Atheist]

Boy there are some serious non-gamblers posting here!

Most of the posts deal with casino gambling, and the simple answer to whether betting at casinos is smart is to check and see how many casions there are, how large they are and whther any go bust, which is almost unheard of.

Casino odds must stay in favour of the house and you cannot beat them unless somone makes a mistake - cutting the wrong place in the shoe at blackjack, letting bets be placed after the roll, etc. "Smart" gamblers don't generally bet at casinos, except in poker tournaments where the casino just takes a cut of the pot and the winner wins. There are many professional poker players in the world who will win well over 50% of the time and make a great living out of it. A great poker player once said, "I know 100 pro poker players. How many pro craps players have you ever seen?"

I see a couple of early posts mentioning progression systems to help you win (where you increase a bet each time you lose because eventually you'll win. RUBBISH! They are 100% wrong and progression systems are for rank amateurs (or congential idiots) with no brains who want to end up in bankruptcy courts.

Horse racing and sports betting are where the men and the boys get sorted out. Amateurs try to beat the races by betting on every race and they always end up losing over a period of time - the old adage "you can beat a race but you can't beat the races is an absolute truism. Professionals pick two or three bets per race day and stick to those bets.

I personally know a dozen or so people who make a living exclusively from betting on horses and sports, and know of many more. Golf is a favourite sport with odds being offered by every country with betting licences. Smart gamblers will arbitrage bets between several different agencies and countries so that whoever wins a tournament, a small profit will be made. It's very time-consuming and you need to have a real passion for the game (or winning) to make it work.

Gambling is all about self-control. Even a casino can be fun as long as you take along a set amount of money - which you have already decided you can afford to lose - and STOP immediately you do lose it. The other side is that you also need to have a set amount to win and once you hit the target, GO HOME. Again, amateurs will go to a casino and win $1000 in the first 20 minutes then stay for the next six hours and give it all back.

Above all, keep it fun and no harm will result.

Interesting aside - in this country at least - more men commit suicide as a result of financial difficulties caused by gambling than any other reason.

 

[LW]

You can’t just look at the “impact,” you must consider the odds. Let’s play a game. I’m going to flip a coin 1000 times. If it comes up heads every single time you win $100 million, or else you lose 1$. Will you play? Think of the utility!

You got yourself a deal. Send me a PM if you visit the Helsinki area some day and we can arrange a meet to play it.

I'm more than willing to pay $1 to watch someone spend two hours flipping a coin to win a dollar. Though I will bring a book with me in case it gets boring along the way.

 

[Rasmus]

You got yourself a deal. Send me a PM if you visit the Helsinki area some day and we can arrange a meet to play it.

I'm more than willing to pay $1 to watch someone spend two hours flipping a coin to win a dollar. Though I will bring a book with me in case it gets boring along the way.

I thought that, too. Then I realized that it would most likely only last for 3 or 4 flips rather than the full two hours.

 

[andyandy]

The fact of the matter is that you’re better off saving or investing that dollar somewhere else. Better yet, give it to someone who needs it more than you. Sure 1$ is somewhat useless (to you) right now, but if you continue playing the lottery (as many people do)... it will add up over a lifetime. Think of the big picture. An average person might buy 1000 lottery tickets over 50 years and not think twice about it. However, this person would probably be hesitant to risk $1,000 on the same slim chance that they might turn it into 100 million.

.

the mistake you're making is regarding a losing lottery ticket as having had no value to the individual. In fact, it has provided hope. It's a less tangible quantity than cold hard cash, but not to be ignored. As long as the player is a realist and therefore the hope provided outweighs the disapointment of loss, then the ticket has a net benefit. If you regard that net benefit as worth more than or equal to $1, then you can justify its expense - even compared to a bumper cash windfall in a few decades time.

 

[ponderingturtle]

I beg to differ. Roulette tables can have a bias to certain numbers over time simply because they are not built perfect.

And to reduce that is why they started to be built with interchangeable parts and got swaped around regularly. As the first mathmetician who noticed that started winning a fair ammount and they asked him how.

The point about Roulette not being dependant on history still stands, it just might not hit the odds that it should. It still does not matter what it has hit recently that does not change the odd for this spin.

 

[Gbob]

There are only two games in a casino where you can, in theory, make a profit in the long run, Blackjack and Poker. If you play perfect blackjack without counting, the house has a 1-2% edge on you. In the long run you will lose, but it's a great deal of fun and the ups and downs keep it interesting. If you can count cards you can turn that around and get a 2-3% edge on the house, but that's easier said than done. Try keeping track of a three person table surrounded by lights an distractions, all the while playing your cards correctly. I'm no slouch in math, but it's hard to keep that level of concentration for a three to four hour period that you need to make money.

Poker, on the other hand, is an interesting anomoly. You're not playing against the house, so your results are dependant upon your skill and the skill of others at the table. The house makes their money on the rake (a small percentage of the action) and rely upon keeping the game fair. Keep in mind, most people you see at a casino poker table have years and years of experience. They survive by waiting for the drunken idiots who can't sigure out the pot odds.

Even in poker, however, no amount of skill can keep a person from having a losing session. Let's take one of the less interesting games, Texas Hold 'Em (only because most people have seen it on television). If I was to play a person who showed his cards face up, I still would lose some hands. Here's an example. Let's say I was dealt 2 Aces. The person sitting next to me was dealt 7 and 3 off suit (one of the worst hands in poker). Obviously you would want to have all your money in the middle, but before the flop you only win about 85% of the time. Now, if I'm sitting down with a bad player I have a pretty good idea where I'm at. Most of the time, I have my money in the pot with less than an 85% chance to win. Even a fool wouldn't play the 7/3 offsuit, and obviously I don't get aces all that often. The best players int he world only win about 60-70% of the nights they play. Of course, any casino in the world would love to have a 10-20% edge in the games they run but they could never find people to play it. Poker players, however, can always find a new fish.

So why gamble if you can't win? Well, for one thing it's fun. Our brains are wired to enjoy the adreneline rush of putting something we care about on the line. Casino games are desgined to pay off enough to keep that fun factor going even when your wallet is being drained.

The saddest people in the casino arfe folks who figure they have a system. The slot junkies are painfull to watch. For the majority of people who go to a casino, they know in the back of their mind that they're going to lose, and the difference between a good session and a bad one is how much they lose. If they lose a small fraction, then they paid for the entertainment value and it's good. If they win it's fantastic. If they lose? Well, it depends on the amount.

 

[Antiquehunter]

Gbob - you forgot a couple of other +EV games.

Pai Gow Poker - played under the right conditions (banking with maximum players at a table) is slightly positive EV (+.21 to the player).

Video Poker - played with perfect strategy and full pay (proper game selection - like fullpay Dueces Wild) can be up to .7% positive EV.

Craps - playing in a house that offers very high free odds bets (10X +) and generous comps can equate to positive EV depending on how they calculate your action for comps purposes. (10X odds is about .18% house edge - so if you can get better than .18% back in comps you can turn it to your favour. YMMV.)

However - in all those three games, you need a MASSIVE bankroll to try and make a go of it. The swings (much like blackjack w/card counting and poker) can be deadly.

I refer you to www.wizardofodds.com for evidence.

-AH.

 

[Gbob]

Good point about comps. I admit, I kind of take them for granted so I don't factor them in terms of cost. And, of course, us poker players don't get as many as craps players. But you're quite right.

Video poker, I'm still not convinced and I haven't studied enough Pai Gow (wasn't played that much in AC when I used to spend a great deal of times trying out different games) but I'll look into it. Thanks for the tip.

 

[marting]

Gbob,
"There are only two games in a casino where you can, in theory, make a profit in the long run, Blackjack and Poker."

Well, much to my amazement, last year Barona casino had a craps game going that could be beat. Yep. Played optimally it had a positive return expectation. They had a defect in the way the "dice" were thrown (California rules).

What made it more fun is that the table limits were $5,000 and the odd's bets were 5x.

It was up for 5 months. Unfortunately, I ran across it in the fifth month. By the time I modeled it and developed a strategy (very simple it turned out) a few weeks later, they had fixed it. What's really great about it is that it could be played with consistent bets and still get a slightly positive expectation, avoiding close casino scrutiny.

 

[Hawkeye]

I thought that, too. Then I realized that it would most likely only last for 3 or 4 flips rather than the full two hours.

Exactly, there’s no need to continue flipping once the first tails comes up. Can I still have your dollar LW?