You can often learn as much from examining bad advice as you can from getting good advice. With any luck, what I’ve done with this post is provide seven examples of REALLY bad advice and replace it with good advice.
Many times, just doing the opposite of what the bad advice suggests is enough to prevent a disaster. Other times, the bad advice might be appropriate in some circumstances. And sometimes, bad advice just doesn’t matter much one way or the other.
In any case, you should know the difference. Here are seven examples of the worst advice about real money gambling I’ve ever heard.
1 – Get Expert Advice About Who to Bet On
Most of the time, the person urging you to get expert advice on who to bet on is the one selling that advice. In the betting world, someone who sells this kind of advice is called a “tout.” A company which provides multiple experts is a “tout service.”
These services prefer to be called “handicappers” or “expert handicappers,” but a healthy dose of skepticism would be wise when dealing with such companies.
Most of them have websites offering free picks. These are worth what you pay for them, usually. But the idea of getting you hooked on their free picks is to generate interest in their paid picks. That’s how they get you.
Let’s look at some of the math behind betting on sports.
Assume you’re an average sports bettor who bets $100 per game on a regular basis. You’re required to risk $110 to win $100, which is how the bookmaker makes his money. Just to break even, you need to win over 52% of the time.
And the lines are set so that your probability of winning is 50%. So, you decide to find an expert to make your betting decisions for you. You find a guy who offers a solid pick for Thursday night’s NFL game for just $25.
Let’s assume that the tout flipped a coin to choose a team. (That’s a likely a scenario, by the way.) 50% of the time, you’ll lose $135, which includes the $110 you bet on the game, and the $25 you spent on the pick. The other 50% of the time, you’ll win $75, which is $100 less the $25 pick.
What does this mean for the house edge? $110 – $75 is the equivalent of a $35 loss, or $17.50 per bet. What if the tout was picking winners 60% of the time? 60% of the time, you win $75, and 40% of the time, you’ll lose $135. That’s $45 in positive expectation, and $54 in negative expectation.
In other words, if you’re only betting $100, that $25 pick doesn’t bring you to break even if the handicapper is right 60% of the time, which is nearly impossible. Even the people in the business admit that 55% is probably the best you can expect from an exceptional handicapper.
If you’re betting $1000 on the game, it might make more sense to pay $25 for a pick. But even then, you’re looking at a potential win of $975 and a potential loss of $1,125.
If your handicapper is right 60% of the time, that’s $585 in positive expected value. You also have $450 in negative expected value, so now you have a profitable pick. You should notice two things about this— you’re going to be right 50% of the time even if you choose randomly.
And even if the tout is really good at his job, you still have to bet considerably more than the cost of the pick to make even good picks profitable.
2 – The House Always Wins, So Don’t Play
Contrary to popular belief, the house doesn’t always win. Sometimes, you win. In fact, about 20% of the people who visit a casino in a given day go home from the casino with winnings in their pockets.
This doesn’t mean you SHOULD play, but it also doesn’t mean you should refrain from playing. It means that the decision is more complicated than that.
No, you probably won’t win in the long run, but you might. If you win a huge progressive jackpot of $10 million, you might conceivably be able to play for low stakes for the rest of your life and show a net profit for your casino gambling career.
That’s not likely, though, to say the least. But what about gambling as an entertainment expense? Is it okay to gamble knowing you’ll probably lose in the long run as long as you’re having fun doing it? Of course it is.
The trick is to decide whether you’re really having that much fun while you’re playing. My dad might have put $2 into the slot machines the entire time we were in Reno together. (We were there for four nights.)
Gambling in a casino didn’t seem like fun to him, but I sure enjoyed myself. I came home a winner on that trip, too! I won about $50 net.
3 – Double the Size of Your Next Bet to Win Back Your Losses
This is just the Martingale system, which doesn’t work in the long run. The idea is that every time you lose, you double the size of your previous bet. Eventually, you must win, and when you do, you’ll win back all your previous losses along with a small profit.
I’ve seen some “gambling experts” say that you can “grind out” lots of small wins this way. But you’ll eventually run into a situation where you lose so many times in a row that your bankroll will be devastated, and you won’t be able to afford the next bet. Or you’ll run into a situation where the next bet in the progression will be so big that the house won’t let you make it because of their betting limits.
Suppose you start with $5 and go on a losing streak in roulette. Most roulette tables with a $5 minimum bet also have a $500 maximum bet, which means you’ll need to bet the max when you have a certain number of losses in a row.
Most people underestimate how many losses that will be:
If you lose seven times in a row on an even-money bet in roulette, you can’t make the next bet because the casino has betting limits in place.
You might think seven losses in a row is next to impossible at the roulette table, but it happens probably once a day in every casino.
4 – Set Win Goals and Stop-Loss Limits
This isn’t terrible advice unless you think it’s going to magically make you a winning gambler. In the long run, short-term strategies like win goals and stop-loss limits won’t change the fact that the house has a mathematical edge over the player.
A win goal is an amount you’re going to win that’s going to signify that it’s time to stop for that session. This would make you a winner… But only if you stop and never gamble again.
A stop-loss limit is the same thing, but it’s an amount you’re willing to lose before quitting the session. It’s meant to limit how much money you’ll lose.
This would limit the amount you lose… But only if you stop and never gamble again.
The way the math behind gambling works, though, is that you’re facing a lifetime gambling session that’s been divided into shorter, arbitrary sessions. As far as the gods of luck are concerned, it’s all one big session.
And the more you gamble, the closer your results will get to the mathematically expected results.
5 – Gamble With the House’s Money Whenever You Can
Here’s the idea behind this advice: Suppose you place a big bet, maybe $500, on the roulette wheel and win. Now, you have $1000. You decide you’re only going to play with the $500 you just won, and you’re going to preserve your original stake.
Once you’ve won that money, it’s not the house’s money anymore. It’s your money. If you continue to gamble with it, you continue to give the casino house edge time to work its magic.
It can be fun to “gamble with the house’s money.” But it can be more fun to pocket your $500 in winnings and buy a nice dinner or some show tickets with your profits.
6 – Practice Makes Perfect
It doesn’t matter how much you practice or how skilled you get. If you play long enough, the house edge will eat up all your money.
The only exception is if you find a real advantage gambling technique and get good enough at it to win consistently over time.
For example, some card counters are profitable in the long run. And to make that profit, they do need to practice and become proficient, both at basic strategy and at counting cards.
Casinos don’t make that easy either. Once they realize you’re counting cards, they’ll usually run you off their blackjack games. Some of them will even ask you to leave the casino entirely.
7 – Find the “Loose” Slot Machines and Play on Them
More nonsense has been written about which slot machines are looser than others than anything I can imagine. The biggest and most popular myth is that the casinos put the best-paying slot machines on the edges of the rows so they’ll attract more players.
This myth originates from an interview with a slot machine manager at a casino decades ago. There’s no guarantee that the interview actually took place, and even if it did, there’s no guarantee that the slots manager was telling the truth.
Multiple more recent interviews with casino managers and slot machine managers indicate that they do NOT place their slot machines based on how “loose” or how “tight” they are.
Even defining those terms is tricky.
What’s the difference, and how is that possible? Hit frequency refers to how often a spin of the reels results in some kind of prize, regardless of the size of that prize. For example, a slot machine with a hit frequency of 33% will result in a win about one-third of the time.
The payback percentage, on the other hand, is a function of how much money the slot machine pays out versus what it takes in. The deciding factor is not only the probability of a win but also the size of those wins.
You can program a slot machine game to pay off at 1 for 1 odds 50% of the time, and if the rest of the prizes hit seldom and aren’t big, the payback percentage can be really low.
You’ll get plenty of bad advice about gambling. It doesn’t even matter what kind of gambling you do. Hopefully, you’ve learned a thing or two from the advice I’ve given against what may be commonly heard. What kind of bad advice have you gotten about gambling?