How Often Do Gamblers Win

Thanks to the r/wallstreetbets subreddit, we have all heard of infamous tales where retail traders have profited millions of dollars. Accompanying this is often a cult-like worship by individuals who wish to do the same, and are desperate in finding the secret to such success.

1. How Often Do Gamblers Win Prizes
2. Do Gamblers Ever Win
3. How Often Do Gamblers Win
4. How Often Do Gamblers Win Real Money
5. How Often Do Gamblers Win Lottery

Internet gamblers over a two-year period, The Wall Street Journal can provide some answers. On any given day, the chances of emerging a winner aren't too bad—the gamblers won. 'How Gamblers Win or the Secrets of Advantage Playing Exposed is an important contribution to early American card-sharping literature. The earliest American expose on cheating is An Exposure of the Arts and Miseries of Gambling with the author listed only as a'An Adept.' The third major contribution to this body of information was How Gamblers. Compulsive gamblers often follow a pattern of behavior that is outlined in four distinct phases. The Winning Phase. A gambling addiction often begins with the experience of a “big win,” which results in more frequent gambling and increased wagers. Find more questions on Gambling on Yahoo Answers. In fact anybody winning the jackpot would be wise to create either an LLC or an irrevocable trust fund and claim the jackpot via either of those two entities. Only an idiot would show up to claim the check for themselves. Also, before going to claim (once you've created such entity) make sure you consult a lawyer, a good CPA and a good. Your chances to win at a casino game on any given day isn’t as bad as you think. Many gamblers have won about 30% of the games that they played. The bad decision that most people often make is to continue with the bet after a win. Only around 11% of the gamblers were able to win some money by going to the next stage of the game. It has been recorded that the heavy gamblers faced bigger losses.

Greed afterall, is human nature.

When it comes to games of pure chance such as the roulette, we are quick to label it as gambling. For games of chance like poker where you possess some level of control, conventional wisdom tells us that it is a game of skill. Because there are elements of decision making and skill associated with trading, it is often not viewed as gambling.

But what actually is gambling? Gambling cannot simply be any games involving uncertainty, otherwise casinos would be out of business. Additionally just because a game involves skill, it doesn’t mean that it is not gambling, otherwise Lehman Brothers would never have collapsed.

Gambling occurs when you have a poor understanding of risk, resulting in either (1) negative expected value bets, or (2) poor bet sizing that leads to ruin.

Negative Expected Value Bets

All bets have the potential to make or lose you money when standalone. The expected value of your bets, is how much you make on average as the cumulation of all of your bets. Thus it follows, a negative EV bet is one where you will on average lose money - like the roulette table.

To help reinforce your intuition, let us imagine a game involving coin flipping. You will win $2 if the coin flips heads, or lose $1 if the coin flips tails. Do you take this bet?

It is pretty obvious that this is a good deal for you. This is because on average, you will gain $1 with every coinflip. For those interested in the maths, you have a 50% chance of winning $2, and a 50% chance of losing $1, 50% * (+2) + 50% * (-1) = +$0.50. Try to do the same thing yourself with roulette table odds.

A not so obvious result that follows from making successive negative expected value bets, is that in the long run you are guaranteed to lose all your money (or ruin). Intuitively this makes sense as with each bet, you are losing money on average.

It should be noted that you can still make money in the short run due to volatility, so the unintuitive optimal strategy for a night out at Vegas is to bet all your money in one go. If you win, cash out and walk; if you lose, go home - either way, it makes for an extremely short night.

Poor Bet Sizing

Bet sizing is simply how large your bets are - do you throw $100 or $100k at a particular stock? However, it is often more useful to think of bet sizing in terms of percentages, as opposed to numeric figures. In summary the larger the expected return, the larger your bet size.

The concept of bet sizing can be modelled mathematically through Kelly Criterion. It is worth pointing out that it is extremely common for poker players or hedge funds to run Kelly Criterion suboptimally, by betting less. This dramatically reduces the risk of ruin, and adds a margin of safety to often nebulous assumptions.

So why is bet sizing important? This is an often overlooked concept, but it is extremely important to prevent ruin (or losing all your money).

To reinforce your intuition, we will once again return to the coin flip game. Suppose you are in a situation where you win $200 for heads, but lose $100 for tails. But, you only have $100 - do you take this bet?

While this is a positive EV bet, remember that you are only making money on average in the long run. This does not safeguard you against the short term, where you can be making or losing money. Had you taken the bet and the coin landed tails, you would have lost all your money. This means that you are barred from participating in further potentially profitable bets.

Translating this to investing, if you over-leverage yourself, not only might you lose all your money, but you might miss out on partaking in potentially profitable situations.

Summary

A 101 on not gambling:

1. Don’t make negative expected value bets - you are guaranteed to lose all your money in the long run.

2. Scale your bets according to confidence in order to prevent ruin. Overextending yourself can make good bets go bad.

In my past life, I was a derivatives trader on Wall Street. My goal is to share everything I learnt about investing and decision making on Wall Street.

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This article is originally published on my personal website christopherjgan.com

Earning a living from betting can be rewarding. However, as profitable as becoming a winning bettor can be, earning a regular salary from sports betting can be challenging. How often can winning bettors expect to get paid? Read on to find out.

In 2017, Pinnacle ran a Twitter Discussion Day where they gave advice about what is required to be a professional bettor. Some of the things discussed included staking and money management, the value of information, understanding the difference between picking winners and finding expected value and the importance of the closing odds in measuring success.

• Read: What distinguishes winning from losing bettors?

One aspect that was missing was an assessment of what the business of making a profit actually looks like, and specifically how often a winner can expect to make one. The simplest way to measure this is to consider professional sports betting as just another job.

Most forms of employment manage to pay on a monthly basis. This article will investigate how often a winning sports bettor can expect to get a monthly pay packet.

How often will your bankroll reach new highs?

One of the earliest inspirations of my chosen career path as a sports betting analyst was an article published by the website Professional Gambler entitled Sports Betting Money Management (you can read the article here). It was revealing as it didn’t attempt to deceive the reader with impossible returns, strike rates and profit growth.

Sports betting is a hard business to succeed in; even the best professionals playing handicap or spread markets only achieve strikes rates of 55 to 57%, with returns rarely exceeding 110% over the long term.

Perhaps the most surprising feature of the article was the observation that a handicapper with a 55% strike rate could expect to see their bankroll reach new highs only 5% of the time. To quote R.J. Miller, the author of the article and professional gambler, “[t]he novice thinks you should have more money each day.” In fact “19 out of 20 days you will be below your bankroll high.”

For this article I decided to test this supposition over a range of betting odds (1.50, 2.00, 3.00, 5.00 and 10.00) and return percentages (90% through to 120% at 2% intervals). The expected probability of reaching a new bankroll high was modelled by means of Monte Carlo simulation. The results have been plotted in the chart below:

At the time R.J. Miller wrote his article, typical handicap odds were -110 (American), equivalent to 10/11 (fractional) or 1.91 (decimal).

How Often Do Gamblers Win Prizes

A 55% strike rate would thus have translated into a 105% return. The best fit line for these figures is the green line above (odds of 2), and indeed we find that for such a return we can expect to achieve bankroll highs just 5% of the time.

It is also revealing just how infrequently we can expect bankroll highs even if our performance is considerably better. Even with a long-term return of 120%, unheard of in the legitimate circles of sports betting at these betting odds, we would still only be achieving highs just 20% of the time. At longer odds, it would be even rarer to achieve those highs.

Monthly returns

The nine charts below show possible monthly betting histories each of 50 handicap even-money level-stakes wagers and a theoretical strike rate of 55%, equivalent to a profit expectation, p, of 10%, or an expected return on investment, r, of 110%.

Even with a very healthy advantage over the odds, three histories finished with losses. Imagine not getting paid two or three times in a calendar year, and worse still having to pay your employer for not working hard enough. Anyone who says sports betting is easy is misinformed.

A winning sports bettor would undoubtedly find it useful to be able to estimate the probability of making a profitable monthly return or conversely making a loss. In fact, for simple scenarios as above where all odds and stake sizes are the same we can use the binomial theorem to calculate exactly the probability of finishing with a loss. In this example it’s 19.7%.

What if we change the betting odds? The first chart below shows how the probability of having a losing month after 50 wagers varies depending on what odds we are betting at.

Understandably the poorer our expected return, the greater the probability that our month will be a losing one. What is also clear is the impact of the higher variance when betting at longer odds. Over a relatively small sample of wagers such as this, luck will play a much bigger role at longer prices. Even with a healthy advantage we can still expect to lose money in a significant number of months.

At odds of 10, the probability of a making a loss is about 27%, with an expected return of 120%. That’s hardly much of an improvement on betting those odds when we hold no advantage at all (43%). By contrast, our monthly expectations when betting short odds of 1.5 are much more influenced by the size of the advantage we hold and much less so by chance.

The next chart reveals how things change when we increase the monthly number of wagers to 250.

Now monthly expectations are much more clearly defined, even for longer odds. Unsurprisingly, the larger the sample of bets, the greater the likelihood we will finish the month with a profit. This is due to the law of large numbers provided we hold profitable expectation. Of course, the corollary is true: where we fail to hold an advantage over the odds, a larger number of bets will imply a greater probability of loss.

The final two charts compare monthly expectations for odds of 2.00 and 5.00 respectively for five different sample sizes: 10, 20, 50, 100 and 250 wagers. They broadly reiterate what the first two charts were telling us:

1. The greater the advantage (disadvantage) we hold, the greater the probability that we will make a profit (loss).
2. The more wagers we place, the greater the likelihood that we will make a profit (loss) over that period where we hold (do not hold) an advantage.
3. The shorter the odds we bet, the smaller the influence of chance will be.

For anyone interested in running their own binomial scenarios, the following Excel formula may be used to calculate the probability of loss from a sample of wagers:

=BINOMDIST(ROUNDUP((n/o)-1,0), n, r/o, TRUE)

where n = number of wagers, o = odds and r = expected return on investment or expected advantage expressed either as a percentage or a decimal (e.g. 110% = 1.1).

R.J. Miller told his readership that with a 55% strike rate and 125 wagers per month, he could expect to lose money every 9th month. At odds of 1.909 (n = 125, r/o = 0.55), the binomial equation yields a probability of having a losing month of 27.9%, or over 1-in-4. Evidently, Miller got his maths wrong for this calculation.

Do Gamblers Ever Win

Alternatively, perhaps he was thinking of fair even-money handicaps without the bookmaker’s margin applied. In this case the probability would be 13.1%, closer to his assumption. Inaccuracies aside, Miller was correct on the broader point he was making: an effective betting strategy is aided by “knowing what to expect.”

For more complicated histories with different betting prices and stake sizes, a Monte Carlo simulation would be required instead.

How Often Do Gamblers Win

Conclusion: How often do winners get paid?

How Often Do Gamblers Win Real Money

Finding an advantage in sports betting is hard; few bettors manage to achieve it over the long term beyond the influence of luck. Even proven winners will have to moderate their expectations of profitability. New bankroll highs will be far less common than most people would imagine.

How Often Do Gamblers Win Lottery

Moreover, expectations of receiving a profitable income month after month should be tempered with some statistical realism. Hopefully this article has demonstrated how difficult earning a living from sports betting can be.