You’re sitting at a blackjack table, sweating bullets as the dealer shuffles the deck. Your heart races as you watch the first card slide towards you–an ace. “Yes!” you think to yourself, “I’m gonna win this hand for sure.” But then the second card comes, and it’s a king. The dealer has beaten you again.
If it feels like you can never win at gambling, it’s because you’re not using the same strategy as the casinos. That’s right–the house always wins because they’re using a proven strategy that guarantees they’ll come out on top in the long run. And while you can’t beat the casinos at their own game, you can use their strategy to your advantage. Here’s how.
The House Always Wins…Eventually
The reason casinos always win is that they follow a strict mathematical model that takes into account both human behavior and random chance. This model is known as the Kelly Criterion, and it basically states that in order to maximize your profits, you should bet an amount equal to the percentage of your bankroll that gives you the highest chance of ending up ahead after taking into account both winning and losing streaks.
For example, let’s say you have a $100 bankroll and you’re playing blackjack with a house edge of 1%. Using the Kelly Criterion, you would bet $1 per hand since 1% of $100 is $1. Now let’s say that after ten hands, you’re up to $110. Using the Kelly Criterion, you would now bet $2 per hand since 2% of $110 is $2. And so on and so forth.
In theory, this system should allow you to always come out ahead in the long run, regardless of whether or not you experience any winning or losing streaks along the way. Of course, in practice, it’s not quite that simple…but more on that later.
Why Most Gamblers Lose Money in the Long Run
Even if gamblers knew about and followed the Kelly Criterion perfectly, they would still only have a slight edge over the casino in the long run. That’s because most casino games have what’s known as a built-in house edge which gives them a mathematical advantage over players. For example, some of the most popular online casino games like roulette have very disadvantages against the players. American roulette has a house edge of 5%, which means that for every $100 wagered, the casino will make an average profit of $5. European roulette has a slightly lower house edge of 2%, but it’s still enough to give casinos a significant advantage over time.
And then there are games like slots which have extremely high house edges but are still hugely popular among gamblers because they’re easy to play and offer up the potential for huge payouts. A typical slot machine has a house edge of around 10%, which means that for every $100 wagered, the casino will make an average profit of $10 over time.
The key to winning at gambling
And while there are some positive aspects to gambling responsibly, such as providing entertainment and social benefits, most people continue to lose money in casinos because they don’t understand how probability works or how to manage their bankrolls properly. So even if they were using the Kelly Criterion system described above, they would still be at a significant disadvantage against the casino in the long run due to these other factors working against them.
The next thing to understand is that the house always has an edge. This means that, over time, the casino will always make more money than you do. However, this doesn’t mean that you can’t win in the short term. In fact, with a little luck and a lot of skill, it is possible to walk away from the casino as a winner.
The key to winning at gambling is to minimize your losses and maximize your wins. To do this, you need to know when to walk away from a losing streak and when to ride out a winning streak. When you’re on a losing streak, it can be tempting to keep gambling in hopes of turning things around. However, this is often a recipe for disaster. The best thing to do when you’re losing is to walk away and try another day again.
On the other hand, when you’re on a winning streak, it’s important to take advantage of it. This is where most people make their mistakes; they think that because they’re winning, they must be due for a loss. However, this isn’t necessarily true. If you’re playing smart and making good decisions, there’s no reason why you can’t keep winning. The key is to know when to quit while you’re ahead.
All in all, while gamblers can never completely beat the house due either to human error or simply bad luck, sometimes winning big, following the Kelly Criterion is definitely their best chance for coming out ahead in gambling. The next time you’re feeling lucky, consider using this system yourself…but don’t forget to walk away when you’re up!