Learn to recognise when you’re betting smart and when you’re just going by your gut.
Gamblers are, historically, a superstitious bunch, often trusting a lot of their bets to ‘gut instinct’ or a ‘good feeling’. There’s nothing wrong with this per se, but you need to know when you’re being irrational to avoid groundless ‘betting systems’ on games of chance as these can cost you a lot of money.
Heuristics: every gambler’s worst enemy
Basically a fancy word for ‘rules of thumb', heuristics are the root of all irrational approaches to gambling.
In the case of gambling, heuristics manifest in superstitions and false pattern recognition. Listed below are some of the more common examples of heuristics overriding good judgement in gambling.
The gambler’s fallacy
The gambler’s fallacy is the mistaken belief that you can predict future outcomes based on previous ones, even if they have no statistical connection.
Every bet in a casino game is statistically independent from the last. Assume the ball has landed on red in roulette 50 times in a row. This does not make it more (or less) likely to come up red a 51st time when you come to place your bet.
This is because, while the odds of getting continuous heads doubles with every spin, the chances of getting red on each individual spin is always one in two (1/2). Presuming the wheel is fair (i.e. not biased towards a particular side or quadrant), each spin is independent from the previous one.
When presented with a figure, even with no relevance to a given situation, we will often use it as an ‘anchor’ for making estimations and decisions. This phenomenon is often exploited by casinos to keep us playing.
A good example is when a roulette croupier rattles off ‘hot numbers’ – i.e. the numbers that have seen the most wins that night. As soon as those numbers are in your head, your brain is already leaning towards either betting on or close to those numbers.
You should also look out for anchors in bet wording, and understand how spread values and handicaps will influence your judgements when playing.
Unsurprisingly, we find it much easier to remember events that leave a strong impression. We attribute greater significance to these events and assume that they will happen more frequently after they have happened once.
Availability bias is particularly notable in sports betting because bettors tend to overestimate the frequency of events like red cards and corners, having falsely remembered them occurring more regularly in previous games.
In casino games, big wins and losses stick in our heads more than breaking-even (or minor wins/losses). This can result in ‘double-up’ strategies with no statistical basis.
A heuristic phenomenon that will be very familiar to fans of slot games. When presented with multiple, simultaneous options, we generally ‘spread’ our choices to maximise diversity.
This is the basis of placing spread bets, or plugging coins into various slot machines rather than sticking with one. While spread bets can result in a better chance of winning, they do not always translate to a positive expected value and players should be mindful of this.
Escalation of commitment: ‘sunk cost’
This is our desire to ‘get our money’s worth’ – once we’ve paid for something, we like to persevere rather than incur additional cost, even if the thing we’ve bought isn’t satisfactory.
You regularly see novice poker players fall victim to this heuristic trap. Once they’ve bluffed their way to the turn with a lousy hand (raising over the odds in the process) inexperienced players will often call rather than swallow a smaller hit. Once they’re in, they are compelled to see their hand through.