Knowing your odds means knowing the odds of winning a prize, understanding the House Edge and coming to grips with the Gambler’s Fallacy.
Odds of winning a big prize or any prize
The odds of winning a prize in a gambling game vary according to many factors, like the number of prizes, the type of game, the size of the prize and so on. The laws of probability are such that in most games you’ll always have to bet more over time to win a major prize than the actual prize is worth. You might win small prizes like a $5 scratchie win, but how much have you already paid for the win? (And do you keep the prize or buy another ticket?)
A good example is a poker machine:
- Poker machines vary in the odds they offer of winning a big prize. In Tasmania the odds of winning a prize can be up to but not more than 7 million to one.
- For example on a poker machine with 5 reels, where two reels have 50 stop combinations each, two reels have 15 stop combinations each, and one reel has 10 stop combinations, the odds of winning a big prize are 50x50x15x15x10=5,625,000.
- Imagine that many grains of sand on a beach. The chance of you winning the jackpot is the same as randomly picking up one ‘winning’ grain of sand from that beach.
You could push the button 7 million times before you win the jackpot. If the jackpot is $5,000 you can see that you’re not likely to get your money back over time, even if you do win the big prize
Have a look at the information on this site to see how the odds work in other forms of gambling. This information is about winning the big prizes. Small prizes are paid out more often and are also bound by the laws of probability…
The Gambler’s Fallacy
The Gamblers Fallacy is the belief held by lots of gamblers that an event (like a win on a poker machine) can be “due” to happen. Wrong!
“Please understand this: There is no such thing as an event being ‘due.’ An event is not more likely just because it has not happened for a long time. For example, many people mistakenly believe that if one color in roulette has won several times in a row then the other color is overdue and they should bet on it. While the ratio of reds to blacks will always approach 50/50 in the long term, it cannot be concluded that this will happen in the short term. It does not matter what the history of past spins is; every trial in games of luck like roulette is independent, and each color is equally likely to come up every time.”
– from Wizard of Odds.
See also Wizard of Odds (http://wizardofodds.com/askthewizard/fallacy.html)