E-7: Gambler's Fallacy

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The Gambler's Fallacy is the belief that if an event has occurred repeatedly, then the opposite is due.

Examples:

*People often think that if heads has come up 5 times in a row on a coin toss, then tails will be  next.

*In roulette, gamblers believe that a colour is due because it hasn't come up for a while.

*Couples who have had a few boys try again because they feel a girl is more likely to be next.

*Monte Carlo 1913, the ball landed in black 26 times in a row. This caused inflated betting on red and players lost millions of francs thinking there would be an opposite consecutive run of reds.

This is not true at all.  All these examples have the same odds of occurring as they did the last time. 50/50.

E-6: Big 6 Wheel

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The amount of spaces on the wheel do not correspond with the amount paid out. Ex: The even money bet  has 24 spaces on the wheel, out of the possible 54.

So the house edge is taken from the 27 spaces it should be allocated. It is missing 3 spots.

As a whole the Big Six has a weighted casino edge of 15.5%

E-5: Video Poker vs Slot Machines

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The difference is that video poker players have to make decisions that affect the outcome of the game, whereas with slots the player has no input and the game is completely random.

Video Poker

• The player has to choose the machine
  correctly
• How many credits to play
• What cards to hold during the game
• All these decisions greatly affect the
  outcome of the game and will mean the difference between a winning or losing
  session.

Slot Machines

• Players have no decisions to make
• They are completely random
• Almost all of them have the same payout
  percentages

The only reason you should be selecting what slot to play, is for the entertainment value the game offers.

With video poker a player can grind out a consistent profit when playing correct strategy, while slot machines are always a losing bet in the long term.

E-4: House Edge

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House Edge is the average profit a casino makes from every bet placed.

Example:

Imagine your making a bet on the flip of a coin. The odds on winning will be 50/50. You bet a dollar on heads and win. Now you expect to get paid a dollar, but a casino wont pay you that. You'll most likely get 95 cents. Losing 5 cents to the house.

On the other hand, if it came up tails, meaning you lost, the casino will take your whole dollar.

That boils down to a house edge of 2.5%.

That's calculated by dividing the 5 cents you lost, by the 200 cents you should have won and then multiplying that by 100 to get a percentage.

Advise: Play games with a low house edge. (Blackjack, Video Poker)