If you’re new to gambling and want to start getting into the activity, you may have a few questions. One of the most important and most common question is, “How does gambling work?”
On this page, I’m going to cover a few broad topics about gambling. It’ll cover the basics and what you’ll need to know and familiarize yourself with to get started. This post is mostly aimed at people who haven’t yet started or are looking to start.
Here’s what you need to know about how gambling works.
What Does It Mean to “Gamble?”
You’re gambling when you’re risking something of value on something with an uncertain outcome in the hopes of winning something of value.
This can be as simple as a bet on a football game with a buddy on a barstool. You might bet $100 that the Cowboys are going to win, and your buddy might bet that the Redskins will win. If the Cowboys do win, then you win the bet.
This may be confusing for some people because “odds” also refer to the probability of winning. If you understand the odds of winning and compare them to the payout odds of a bet, you can estimate how good or bad a bet is, mathematically.
Most bets have a negative expectation, which means you’re going to lose more money than you’ll win in the long run. Keep reading to learn move about expectation value.
Negative Expectation and Positive Expectation Bets
Some bets are a break-even proposition. For example, if you have a 50% probability of winning or losing, and if you’re going to win or lose the same amount, in the long run, you’ll break even.
But most bets aren’t like that, especially when it comes to casino bets. Most casino games, for example, will offer a lot of bets with an even money payout. You can count on having a lower than 50% probability of winning such a bet.
Let’s take a hypothetical game where you have a 45% probability of winning and a 55% probability of losing.
This means, on average, you’ll lose 55 times out of 100 and win 45 times out of 100.
In the short run, this number will vary because of random chance, but the law of large numbers suggests that the longer you play, the closer your results will be to the mathematical expectation.
For you, this is a negative expectation bet, for obvious reasons. For the other guy, usually the casino, this is a positive expectation bet.
All Gambling Businesses Offer You Negative Expectation Bets
If you play casino games in a casino, the math is set up so that you’ll lose money in the long run, even though the games are completely random.
If you play poker in a casino, you’re competing with the other players, so you might think you have an opportunity to get a positive expectation bet out of the deal. If you’re more skilled than the other players, this is true.
If you were exactly as skilled as every other player at the table, you’d be playing a break-even game if the casino didn’t take a 5% rake out of each pot. But that’s not the case.
To get a positive expectation in poker, you need to be so much better than the other players that you compensate for the 5% rake.
When you bet on bingo games, the bingo hall takes the money from the sales of the cards to create the jackpots. The problem is that they take a percentage of those sales to run their operation, making a bingo game a negative expectation game.
If you bet on a sporting event with a bookmaker, they usually ask you to wager $110 to win $100 on a proposition where they estimate you have a 50% probability of winning.
The Danger of Addiction
Some people think that just because you’re not ingesting a substance that’s going to affect your ability to think straight, you can’t become addicted to gambling.
These people are flat wrong, and science has demonstrated this repeatedly.
Gambling is what they call a process addiction rather than a substance addiction. You become addicted to the changes in your brain chemistry that gambling produces.
How do you know if your gambling is becoming a problem?
One of the definitions of compulsive behavior is that you feel like you can’t stop doing it, and engaging in that behavior no longer brings you any pleasure.
If your gambling behavior is causing problems in your personal life, you’d be better off giving it up. It’s a dangerous habit to form.
Choosing a Gambling Hobby
Deciding what you want to gamble on is a tricky thing. I know people who just don’t enjoy gambling at all. I have friends who love slot machines, but I’ve never understood the attraction there. To each his own.
Chances are, you’ve probably already engaged in some kinds of gambling in your life. You might have made a casual sports bet with some buddies. You probably played penny ante poker as a kid. You might have even sat at a slot machine for a few hours.
Pay attention to how much you enjoy the experience. Don’t gamble on games or activities if you don’t enjoy them. I don’t waste money playing slot machines, for example. I know in the long run that they’ll cost me money. I also know that they’re the costliest game I can play in the casino.
I have friends who don’t like to play blackjack, but I love it. Not only is the house edge lower in blackjack than any other game, but if you learn how to count cards, it can become a positive expectation game for you.
The biggest piece of advice I have is for you to start small with any gambling activity. This means don’t bet a lot of money on a game or activity you don’t understand and aren’t sure you like.
Some Things to Avoid When Gambling
You’ll find plenty of well-meaning but bad advice on gambling forums. And you’ll hear that from the other gamblers in the sportsbook or the casino, too. But they’re usually wrong.
Here’s an example. One popular gambling writer likes to tell you that your odds of being a winner improve if you set a stop-loss limit and a win goal. This is an amount of money that when you’ve lost it or won it (respectively), that indicates it’s time to quit for that session.
The idea is that by ending the session, the clock starts over on the game, so you beat the odds.
Another thing to avoid is drinking too much when you’re gambling. Drinking leads to impaired judgment, and gambling with impaired judgment leads to losing money you can’t afford to lose.
How to Become a Good Gambler
Some people can’t become good gamblers. They might not have the self-control needed. Or they might not be able to handle the math.
The trick to being a good gambler is to understand what’s going on with any bet you make.
Roulette gets a bad rap for having a high house edge, but if you understand the roulette house edge and how much you’re going to lose at the table on average, you’re better than the average person. You’ve probably put in the effort to decide if the game is worth it to you.
If you want to become really good at gambling, read some good books on the subject, but also, study some basic textbooks about probability. Gambling is all about probability.
If you understand the basics of probability, you’ll be lightyears ahead of the other gamblers at the table, in the casino, or at the sportsbook. And this holds true even if you only play games that are entirely random.
The examined gambling life is the only gambling life worth living.
Those are the basics of how gambling works, but you can find plenty more detailed information about specific games and gambling activities on our site.
You can even study the legalities of gambling in various jurisdictions and which casinos offer which amenities when you’re traveling.