The gambling rule

I went up the hill to test my probability knowledge last Saturday. I started off quite lucky but ended quite sloppy. I have read some books about gambling and I’ve some rough idea about how to gamble smartly. Talking about gambling smartly, I believe most of the gamblers have no idea what is it. Yes, it’s true that there is the element of luck in gambling. However with some basic knowledge, it is possible to increase your chances of winning in the casino.

You might wonder why the house always ended up as winners. The logic is simple. The house always compensates less than what you should get. Take the “Tai Sai” for example. The probability for the three dice total to a “Big” or “Small” is actually 50%. However, the house will not compensate you when the three of the dices has the same number that is either triple 1, 2, 3, 4, 5 or 6. This means that the house has an advantage of 1/36 when you play on “Big” “Small” or “Even” “Odd”. This is because the total combination of the three dices is 1/6 X 1/6 X 1/6. While the probability of a triple one is 1/ (6X6X6). By multiplying this number by 6, you get 1/36 which is the house advantage. This is considered a slight advantage to the house. What a smart gambler will do is to wager on the bid that will give the house the least advantage hence increasing his chances of winning.

I saw some gamblers who kept wagering on the bid that the house will pay 8 to 1. I calculated the probability and found of that it is actually 2/21. This means that the house should pay a 9.5 to 1 instead of 8 to1. This is not considered a good bid. It’s true that you could get eight times of your money if you win. However given the risk that you have taken, you should be compensated more than you should get(9.5 instead of 8). It’s quite similar with what we learn in finance – Return to risk ratio(RTRR) – given the amount of rish you have taken, what is the return you should expect.

Another thing that most of the gamblers do is to double their wager when they lost their last round. This is definitely a NO-NO in gambling. The golden rule is only to double up when you win and reduce your wager when you are losing. I came across some sort of system. The author named it as progressive betting. Say that you start with one unit(may it be $5, $10 or 50). When you win, double your wager to two unit. If you win the third time, keep one unit back and wager on 3 units. This means that everytime you win, you increase your wager, whenever you lose, go back to one unit. By using this method, you could maximize your profit when you are on a winning streak and minimize your losses when you are on a losing streak.
I just played on three tables last week. I didn’t get the chance to play Blackjack or Baccarat(cos the minimum is too costly for me). I’m now studying on how to beat the dealer at the Blackjack table. Blackjack is the only game in casino that might give the player an advantage if you know the correct techniques and methods. I planned to try my luck next week after my mid term exam this Saturday. It seems that I’ve a lot of things I need to study – GMAT, Blackjack and my mid term test.

If you don’t buy my words, it’s fine. After all, I lose money…