The Ultimate Stupidity Tax (Part II).


Welcome back!

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.

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  • threandy092

    It amazes me that people think they will actually make money gambling. It’s just delusional. When it comes to cards and dice games, it’s just a basic lack of understanding of probability.

    • https://www.montycampbell.com/ Monty Campbell

      That’s exactly what I wanted this article to do – shed light on the the basic math behind it. It’s hard to argue with math.

  • Neil G.

    Thanks for posting this Monty. Gambling is a system of selling hope in exchange for money. Hope springs eternal, but money always runs out at the casino.

    • https://www.montycampbell.com/ Monty Campbell

      Well put Neil. I replied in the comments section of Part I that the casinos have built a billion dollar business capitalizing on that hope.

  • romas

    It’s a widely known concept that the vast majority of gamblers are going to lose money but that doesn’t stop people from wagering. When those bettors eventually go broke and cannot wager any more, there’s always somebody else waiting to take their place in line.

    • https://www.montycampbell.com/ Monty Campbell

      You got that right romas. There’s no shortage of people eager to transfer their wealth to someone at the casinos who has done the math.

  • fuelguy

    Gambling should be approached as entertainment.

    • https://www.montycampbell.com/ Monty Campbell

      I disagree fuelguy. You’ll never see the rich giving some low-paid clerk their hard-earned money to spin a ball around a wheel and then call it entertainment. I think gambling is often times couched as entertainment just to make it sound good. I don’t think you would find flushing a $20 bill down the toilet entertaining and that’s the nature of gambling.

  • Tnulp

    I dont gamble for precisely these points. Players always win hands at blackjack which gives them the impression that the game is winnable, but the house edge is always grinding away and their money slowly disappears.

    • https://www.montycampbell.com/ Monty Campbell

      The house definitely has an edge. They didn’t build those glamorous hotels from charitable donations. They built them from the that great transfer of wealth that occurs when people enter the casinos.

  • freny

    Good article. Gamblers do overestimate their chances and probability of winning. Near wins are what essentially keep casinos in business. Giving players a taste of winning will almost always guarantee that they visit again!

    • https://www.montycampbell.com/ Monty Campbell

      You got it freny. It’s the near wins that provide the illusion.

  • RS

    Next to actually winning, nothing gets your adrenaline pumping like nearly winning and the realization that you almost took money from the casino. But if casinos gave out money to everyone who almost won, they would be broke after one day.

    • https://www.montycampbell.com/ Monty Campbell

      That’s a good point RS. The casinos are counting on that adrenaline to keep a person in their seat, until they gamble it all away.