If you missed part I of the article, click here.
Now, let’s talk about the math of gambling. I like math. It’s the universal language. It’s the language that never lies.
Math is also the language of casinos. You see, each game you play at the casino is designed to give the casino a mathematical advantage against you winning. Every single game. Every single time. This advantage varies by game, but it helps ensure the casino won’t lose money against gamblers.
And although many people believe they understand the odds involved in gambling, they in fact, do not. Unfortunately, their confusion and denial about the odds makes it very easy for them to be manipulated.
Lest anyone think I’m picking on those that are bad at math, know this: Almost everyone has trouble understanding the big numbers involved in gambling odds. Casinos manipulate these misunderstandings to exploit gamblers. But by learning about the odds, you’ll quickly see that gambling is not the harmless form of entertainment you once thought it was.
The most important thing to understand is that the odds always favor the casino. For blackjack, the advantage for the casino might only be 0.5%, but certain types of slot machines have a 35% edge over the gambler. This means that if you bet ten dollars in the slots, you can expect to keep only $6.50; if you bet $100, you can expect to keep only $65, and so forth. The more you play, the more you lose. Although some gamblers get ahead temporarily, in the long run the odds haunt them… and eventually they catch-up with them.
You see, gambling machines are little nibblers, not giant sharks. A shark would just take your entire wallet in one big, voracious bite. If casinos took your money that way, you would be shell-shocked and probably never return to the gambling waters. Obviously, the casinos don’t want to scare you away, they want you to keep coming back. That is, keep coming back and giving them your hard-earned money.
Let’s explain casino odds with a simple example, like an unfair coin toss. If I had coin that was rigged to come up with heads 65% of the time, would you play a game of coin toss with me where I get to bet heads and you have to bet tails? The answer is obviously no. The game would obviously be tilted in my favor and you would lose over time.
But this is exactly what happens in the casino. Gamblers make this bad bet every day, 24 hours a day. The gambler hopes to walk away with a fortune, but the casinos know that in the long run that fortune will belong to them because of that slight tilt in the odds. As they say – gamblers see gambling as entertainment combined with a chance to win. The casinos see gambling as a business combined with a near-certainty of winning.
Somehow though, when the rare win is called a “jackpot” and is accompanied by bells and lights, these same odds become obscured in our minds, and we suddenly think that these games can be won.
How obscured? Let’s take a look:
In a typical weighted slot machine, the chances of hitting the jackpot image on all three reels is 1 in 262,144. Doesn’t sound too bad does it? Well, let’s put those odds into perspective. Rather than win the slot jackpot, you are more likely to:
Get a hole in one in golf: 1 in 5,000
Have 13 sons in a row and no daughters: 1 in 8,000
Find a four-leaf clover on the first try: 1 in 10,0000
Become a professional athlete: 1 in 22,000
Be killed by a rock falling from the sky: 1 in 200,000
Now it doesn’t sound so good does it?
Gambling is a big, big business. And it isn’t a $90-plus billion business because the casinos lose. The odds are always stacked against the gambler, but they are sold as a “chance to win”. It’s the pursuit of false hope. You may win an occassional race, but you can’t beat the races.
It’s in your best financial interest not to walk into that casino and place the bet – the math simply isn’t your friend. But I know that some will press their luck anyway.
How do I know this?
To the average Joe, working hard, saving money and investing it wisely doesn’t sound like an attractive way to make a fortune. Gambling seems sexier.
But know this – It is 100% possible for the average Joe to become wealthy just following basic, time-honored principles. All the wealthy people I know started out as average Joes. I myself began as an average Joe. So I know.
Success comes from working hard and being smart with your money. Working hard, I think you understand. Being smart with money means not risking your money when the odds are clearly stacked against you. Being smart means never throwing it away, because then you have to re-earn that same money again. Being smart means growing your fortune, not putting it at risk. Being smart means not paying the stupidity tax of gambling.
Be free. Nothing else is worth it.