October 16, 2020

Sports Betting As An Investment

ROULETTE – Why You Shouldn’t Do It

(Picture by Oniff – Own work, CC BY-SA 4.0, https://commons.wikimedia.org/w/index.php?curid=39409754)

 

So, in this article, we’re doing something else, as we will discuss something we actually don’t like at all – pure gambling in the shape of roulette.

 

ROULETTE – The House Always Wins

 

 

Have you ever heard the saying, ”The house always wins”? Well, it’s hard to find a game where that applies as well as for Roulette.

If you are a sports bettor, the way you make profits lies in your ”edge” – that is, you make money based on your knowledge of the teams and most likely some historical data, so you can make informed decisions based on what the bookmakers offer you. You actually have a chance of beating them by being better at assessing the ”real” odds/probability of an event. It is certainly not easy but it is not impossible.

When you place your money (tokens) on the roulette table, you do not have this potential advantage. There is NO way for you to become better at estimating the color the ball stops at, or the specific number, than the casino. It is totally random. Just because it was Red the last time, the likelihood of the next to be Black is not higher or lower than it would have been, if the previous result was Black. People with limited understanding of probabilities sometimes believe that if there is a 50% chance of something happening, then you can expect it to happen every second time, i.e. if there is a Red on the first spin, then surely the next one must be Black (disregarding the ’0’), right?. Alas, it is not so.

 

First of all, of course, there are more potential outcomes than just a Red or a Black number on a Roulette table – there is the ’0’ and even (in the US) the ’00’, which are neither Red or Black. This means that you don’t get a 50/50 chance of winning if you place your money on either Red or Black. You also can’t cover the ’0’/’00’ when you are playing groupings of numbers, or even/odd, as they are not included in them. This is actually the ”edge”, the house has. Without the ’0’ and the ’00’, the house would have no edge and would in theory neither win or lose money in the long run, since e.g. playing on Red would have exactly a 50% chance of winning.

With a ’0’ added, the likelihood of Red or Black is actually only 48.6% (each) and if ’00’ is also used, the likelihood drops to 47.4%. So, if you place $10 on Red, over time you can expect a return of $9.72 if only ’0’ used and $9.48 if both are used – so you lose a bit in the long run. Since you have no way of predicting the color, there is no real way to improve on that.

 

Still, the fact that the house has an obvious statistical advantage, has not deterred gamblers or creative ”system sellers” to develop methods that are ”sure” to deliver profits on the table. Now, given that we can’t have an edge based on, say some inside information from the trainer or jockey, as you could if you were betting on horses, these systems can only be based on one thing: Probabilities. And most, if not all of them, are based on expected ”runs” within a sequence of events – for instance, the number of times in a row Red is coming up or an odd number is winning. And based on this expected sequence, staking plans are used. And this is what the systems basically are: Staking plans.

 

ROULETTE SYSTEMS = STAKING PLANS

 

The idea is this: If you have a 50% likelihood of something happening, eventually it will if you repeat the process enough times. A well-known plan proposed the following: Double your stake until you win. That will mean that you end up with a profit equal to your original stake. This staking plan is known as the Martingale staking plan.

Let’s look at an example of what might happen.

You stake 1 pt. on Red at first. Let’s for argument’s sake say, that 1 pt. is $5.

The croupier spins the ball – and it’s Black, so you lost $5. No worries, now you will double the stake to win the $5 back plus $5 as profits. There is a 50% chance of winning after all (well, close to anyway). So you stake $10 on Red again. The croupier spins the ball again and wouldn’t you know it. Black again! OK, on it again. We double up in order to win back our stakes plus the $5 we tried to win at first. So you place $20 on Red. The ball stops at the number 2… which is another Black. And so you must double it again. And this time the outcome is ’0’, so another loser.

In fact, if you hit a really unlucky streak, you could end up with 24 losers in a row! You will have gone broke long before that though. Do you know how much you would stake at no. 24 if you started with just $1?

$8,388,608!

This staking plan is obviously a recipé for disaster and you should never use it.

The unfortunate thing is that there is no ”magic” staking plan which will change the fortunes in your direction. There is no edge to be found and using one or another staking plan will only mean that you increase your stakes and in the end more likely than not will lose much more you win.