Gambler's Fallacy and Understanding Odds

May 26, 2009 | Article Category: Casino Games

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Gambler's fallacy is defined on Wikipedia as "the belief that if deviations from expected behavior are observed in repeated independent trials of some random process then these deviations are likely to be evened out by opposite deviations in the future." Gambler's fallacy is also known as the Monte Carlo fallacy.

One of the simplest examples to help players understand gambler's fallacy is to consider the tossing of a coin. If a fair coin is tossed thirty times in a row, and heads comes up each time, gamblers may incorrectly believe that the next coin toss will have to be tails. Gamblers may feel that the tails toss is due because it did not come up for a long time. This is not the case at all. What is not understood by those who operate under gambler's fallacy is that each time the coin is tossed, there is a 50% chance of it being heads, and a 50% chance of it being tails. The result of the next coin toss is entirely up to chance, and will not be affected by the number of times heads had previously come up.

In terms of online casino games, players who are on a losing streak feel that their losing streak will stop because it has been going on for a long time, and that they will begin winning. While it is possible that their losing streak will stop, this is simply a random event, and has no connection to the fact that they had been on the losing streak for any length of time. It is just as random as when the marble on a roulette falls into a specific number, or when dice are rolled in a craps game. Things that happen in the future are not affected by things that have happened in the past when the result is random and affected by mathematical probabilities. The odds are the same each time the dice are rolled, a coin is tossed or a roulette wheel is spun.

On the other hand, certain gambling games are not governed by gambler's fallacy. Card games, such as blackjack do not have 50/50 odds, and the likelihood of certain outcomes is affected by which cards have already been removed from the deck. For example, if a ten has been removed from the card deck, the likelihood of receiving a ten in the next hand has decreased from 7.69% or 4 out of 52 to 5.88% or 3 out of 51. On the other hand, it is now also more likely, according to the odds, that players will receive a card other than a ten as the next card dealt. In this case, external factors that have happened in the past have influenced the probability of the events that will take place in the future.

On the lighter side, mathematicians tell a joke which shows the nature of the fallacy. A man who flies to many destinations by airplane decides that he should always takes a bomb with him onto the airplane. When his friends asked him why, he responded that the likelihood of an airplane having a bomb on it is not very great, but that the chances of an airplane having two bombs on it are almost non-existent.