Things about gambling
Via the cap, comes this story of poker playing. If you are playing for money that matters to you, don’t play. There are two factors in gambling and most people forget the most important: does the money matter to you. You cant make the proper mathematical decision because the money matters and you don’t want to lose. So, guys like me will pressure you, you’ll fold, then you’ll go all in with a good hand but mine will be better. Because I’ve figured you out.
If the money matters to you, do not play. Period. If the $2, $20, $200 or $200,000 matters to you, do not play. Period. Even if your money mattering, as the article suggests, only matters on principle.
The next is odds. What are the odds I win vs. odds of pay out? Take a coin flip for instance. You say to me “let’s flip a coin for $1. You win, you get $1. I win, I get $1”. I’m indifferent to this bet. Odds are even money and the $1 doesn’t matter to me. I’d take it because I want people to perceive me as an action guy.
Compared to a coin flip where you’d pay me $0.75 and I’d pay you $1. I probably wouldn’t take this bet unless I wanted the perception as an action guy to manipulate you later, because the money doesn’t matter to me. But my odds of winning are less than my payout.
If you want to pay me $1.25 if I win and I pay you $1 if I lose, I’m all over it. Mathematically, I’m a winner and it’s money I don’t care about.
If you up it to money I care about, I’m not taking any bet. So, you bet me $1M that you can roll a one on six sided die. Odds are in my favor. I’m not taking the bet because $1M matters to me. Even though, mathematically, it’s a solid bet.
It’s also why I play powerball when it gets to eleventy billion dollars. The money doesn’t matter to me.
September 10th, 2014 at 9:41 pm
Buying one Powerball ticket ups your odds dramatically. Buying a second one makes an infinitesimal change in your odds.
September 10th, 2014 at 10:53 pm
Bah – the odds of you winning powerball are exactly the same, whether you buy a ticket or hope the wind will blow the winning ticket into your hand.
September 10th, 2014 at 11:55 pm
And yet, as far as I know, not a single winner in the history of powerball has had their winning ticket blown into their hand randomly by the wind, or any other force of nature. I’m pretty sure they’ve all bought them or had them given as a gift.
September 11th, 2014 at 5:50 am
Robert, wouldn’t that mean one has nearly the same chance of winning the powerball buying a ticket as would one would not buying a ticket???
September 11th, 2014 at 9:10 am
Don’t be gullible, Robert. You only hear about lottery winners because the lottery uses them in advertising, and puff-piece news stories run in return for the lottery advertising on that channel.
Why would lotteries advertise when winning lottery tickets were obtained by graft, dishonesty, or luck not involving giving them money?
September 11th, 2014 at 11:38 am
“So, you bet me $1M that you can roll a one on six sided die. Odds are in my favor. I’m not taking the bet because $1M matters to me. Even though, mathematically, it’s a solid bet.”
I’m not taking that bet because it is money I would care about, and no matter how solid it would be mathematically, it is in the realm of the cider-spouting joker from “Guys and Dolls”.
” One of these days in your travels, a guy is going to show you a brand-new deck of cards on which the seal is not yet broken. Then this guy is going to offer to bet you that he can make the jack of spades jump out of this brand-new deck of cards and squirt cider in your ear. But, son, do not accept this bet, because as sure as you stand there, you’re going to wind up with an ear full of cider.”
September 11th, 2014 at 11:39 am
Jack of Spades.
September 11th, 2014 at 12:00 pm
The key in risk management isn’t maximizing your chance of winning.
It’s choosing a course where you can survive when you are wrong.
True in gambling or designing a mission critical system.
“Before you try to beat the odds, make sure you can survive the odds beating you.”
September 11th, 2014 at 4:57 pm
Another reason not to gamble except for entertainment is the ability of a significant number of people on this planet, and perhaps an even more significant number of card players, to manipulate cards in a manner favorable to them. And if not cards, then chips or dice or other aspects of a game of chance.
How to Cheat Your Friends at Poker is a book every young person should read before gambling with money, for entertainment or for more serious social reasons.
September 11th, 2014 at 5:37 pm
As I understand it, the only notionally sensible “professional” gambling game is Poker.
Because you’re not playing against the house; The House Always Wins.
You’re playing against the other suckers at the table, and if you can realize when you’re the sucker and stop, you have a good chance* of coming out ahead.
(* Assuming you can play absolutely correctly, every time, too.)
September 11th, 2014 at 8:40 pm
I have an uncle who is making a modest living playing poker. Your advice mirrors his nicely.
He also agrees that playing the other players is far easier than beating the house, which gets a cut even if you win!
September 15th, 2014 at 7:01 pm
Paul, dustydog —
Your odds of winning, without buying (or being given) a lottery ticket are 0.
Your tiny, almost impreceptible, chance of winning with one ticket is STILL astronomically greater than 0. THAT is a statistically significant improvement in your odds.
Just as have ZERO chance of being eaten by a shark if you live in a Buddhist temple on top of a mountain in Nepal and never leave. You have a very small chance of being eaten by a shark visting Florida and swimming in the ocean. You have statistically increased your odds of being eaten by a shark, even though your odds are still unbelieveably low.
Zero isn’t a small number. It is not “a little less than 1”. It is an absense, a void.
Now, the odds of winning the lottery are SO small that buying a whole shoebox of tickets doesn’t signficantly raise your chance of winning.
Once or twice a year, if the mood strikes me, I’ll buy a lottery ticket, and let the computer pick the number. My overall odds of winning FOR THAT WHOLE YEAR are still the same as the habitual Lotto junkie who buys $50 worth of tickets with numbers carefully selected, because the odds of EITHER of us winning are so close as to be statistically indistinguishable.
I figure the 5 or 10 minutes casual enjoyment I get thinking of what I would do if I won are worth the price of the ticket, in terms of entertainment value. Easily worth the same, in terms of “smiles X minutes / $” as an “OK” movie in the theater.