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Saturday
Nov052011

Gambling

I must be very unlucky.

I recently spent some time at a conference in Las Vegas. I didn't have much free time, but I passed through the casino enough that I had the opportunity to stop for a few minutes and check out the games. There's an emotional side to gaming. There's also a strategic side that involves logic, mathematics, and money management. The emotional side is easy. Bells and lights and the fake 'chinka chinka' sound of virtual coins falling out of the machine into the tray below (it's all electronic now) prey on your desire to succeed. It can be very intoxicating. But let's take a look at the other side for a moment.

Casinos are very lavish, and very expensive. Who do you think pays for all that? That's right...the gambler. So there must be ways to ensure that the casino wins, and the gambler loses. It starts with the math behind each game. Take a simple game like roulette. A little chrome ball falls onto a spinning wheel and randomly lands on a number and the house pays out based on the odds of that happening. If all the numbers are split evenly into RED and BLACK, and the payout is 2-1, then it all makes sense. Unfortunately, that doesn't leave the house any way to make money. So they invented the GREEN 0. They still pay you 2-1 odds, but the odds aren't even anymore. If you choose BLACK, then the house wins if the ball lands on either RED or GREEN. Hey!....that's not fair! Welcome to Vegas, buddy! In fact, the casinos have gotten so greedy that they added a GREEN 00 number to the wheel as well, just to skew the results further in their favour.

Essentially, the casino's strategy is to make you think you're playing a fair game, and that your personal gaming strategy can beat the house, while they empty your pockets. I know a very intelligent individual who claims his roulette strategy is unbeatable. He simply waits until five or six spins in a row all come up BLACK, then he bets RED, figuring it's bound to equal out so the odds are in his favour. This would be a wonderful strategy if the wheel actually remembered its previous spins and adjusted accordingly. That strategy is so off base that casinos now gladly show you the last ten spins just so you can jump in and make them bankrupt. Of course, they know the math doesn't work like that.

Every game has an edge for the house. Slots are very popular. Most slots pay out up to 98% of what they take in. In Nevada, the law requires them to pay out at least 75%. A 95% payout should mean that a gambler can enter the casino with $100, play all night, and leave with $95 the next morning. Not bad entertainment for $5. Unfortunately, this isn't quite how it works. Because small profits continue to be re-played into the machine, that 95% payout is like having a small hole in your wallet. Eventually, if you stay long enough, it's all going to find its way out that hole and into the hands of the casino. Here's a similar game we can play. You give me $100 and I'll give you back $95. Come on...don't be shy. In fact, we can play this game all night if you want to!

Perhaps the saddest part about casinos is that they don't require their patrons to take intelligence tests before entering. They are always filled with people looking to make their fortune the easy way. In 99.99% of the cases, they just take money from people that can't really afford to lose it. I have nothing against them. If you want to go to a fancy, glitzy casino and play some games as evening entertainment instead of going to a movie, then go right ahead. But don't expect to come home a winner. Don't take more than you can afford to lose. Don't pull out your credit or debit card because you have a hunch the next game will be your lucky break. A lot of bad stuff happens to families that forget these rules.

Like I said at the beginning, I must be very unlucky. I hear all kinds of stories about people who made money on a particular night at the casino. I lost $4. I had a bit of fun. But my expectations didn't change at all. Beating the casino has never been part of my retirement plan.

   Don

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