Gambling Mathematics Explained: Can It Become a Career?

by in Misc
Gambling Mathematics

There is a saying that the house always wins. Some gamblers who enjoy games at  Vulkan Vegas Casino sometimes find it hard to win. And the reason behind this is that they don’t understand mathematics. By design, the gameplay consists of complex math calculations. This is what we will discuss today.

If you want, you can turn this into a career. You would have to study statistics and apply what you have learned to design casino games. 

Table of Contents

Understanding the Odds

Gambling games have odds of outcome or results. To best explain this, we need to create a simple game. Here are the rules: 

  • There are three letters you can bet on. These letters are A, B, and C.
  • There are three balls in a covered box, and the facilitator will draw one ball that has a letter. The three balls are A, B, and C.
  • If you bet $1 and the ball drawn matches your bet, you get back your $1 and get paid an extra $1 (1:1 pay ratio).

Now, let us discuss the math. On each round, the facilitator, or the house, will only draw one ball. That ball decides whose bet wins or loses. Whatever the outcome is, the odds are always 33.33%. 

Why? The letter A only has one chance of being picked out of the three balls. So, the math is 1/3 = 0.3333 x 100 = 33.33%. The two other balls also have equal chances — 33.33%. As you can see, it does not matter which letter you bet on. If you bet on one letter, the odds of that letter being drawn is 33.33%. 

Where did the 66.66% go? It goes to the casino. That is the odds of the gambling platform winning. Since you only wagered on, the casino “owns” the remaining two that you did not wager on. In summary, your odds of winning are 33.33%, but the casino’s odds of winning are 66.66%.

The Payout Ratio 

The payout is a significant factor when designing a casino game. In our example, you bet $1 – you win $1. Why does this matter at all? If you wagered on two letters, like A and B, your odds now are 66.66%, and the odds of the casinos are 33.33%. However, this change in odds does not matter.

If A was drawn, the casino would give you back your $1 for the A. Then, the casinos will take your $1 loss for the B. Then, they will use that $1 from the B to pay your win for the A. 

On the other hand, if the letter drawn was C, you lose your bet on both A and B, and you make no profit. The casino would take both bets, and you lose. 

As you can see, it does not make sense to bet on two numbers with this kind of rule or game setup. The casino game designer took the bet size into account, and players will not place that double bet, knowing that they are not likely to earn a profit.

The Bet Size

In this game, the casino would probably have a maximum bet of $5 per letter to manage the losses or risks of the gambling facility. One thing for sure is that the betting range cannot be between $1 and $1 million.

Just imagine: if you wagered $1 on A, another player wagered $1 million on B, and a third person wagered $10 on C. 

If the letter drawn was B, the casino now has to pay $1 million to the player. Where is the casino going to get that money? The casino only made $11 from players A and C, but then the casino had to pay $1 million to player B. It will take years before the casino can recover this money. As such, the casino also has to control the betting ranges or limits.

One application of this principle is roulette. There are 38 digits in roulette, but the payout ratio for a straight bet is 35:1. If you were the player, you would never bet $38 ($1 for each digit).

It does not make sense because no matter what digit the ball lands on, you will only get paid $35 plus your original bet, which is equal to $36. However, you wagered $38, so you still lost $2 in the process. 

Casinos do not cheat. They have no reason to do so. It’s just that by design, the casino has an advantage. Think of it this way: if you were to play a one-on-one match against Lebron James, Lebron is likely to win because he is one of the greatest basketball players who ever lived. If he won, would you accuse him of cheating?

As you can see, Lebron has everything it takes to win the game against you. The same thing goes with gambling. By design, the house has an edge, and you are going to win only through sheer luck.

Gambling Mathematics