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Gambler’s Fallacy: How to Avoid Losing Bets
Gambler's Fallacy
The most challenging adversary you can find while gambling isn’t usually a masterful player or odds that seem to benefit the house.
We’ve all been there. You place a series of bets only to find yourself trapped in one of the gambling world’s most renowned traps: the gambler’s fallacy.
You surely have felt it but didn’t know what to call it. Now is probably a good time to avoid best falling victim to a thinking mechanism that penalizes your chances.
We suggest you keep reading the following few lines, as we share some of the gambler’s fallacy examples and why it may be costing you money.
What is The Gambler’s Fallacy?
As the name suggests, the gambler’s fallacy is linked to casino games and sports betting.
Tip!
The gambler’s fallacy is a false belief that a random event is less or more likely to happen based on the results of a previous event.
A fallacy is the product of invalid or faulty reasoning.
However, there is a logical structure to this line of thinking, which makes it particularly dangerous for players.
Take Note!
As a result, the gambler’s fallacy is an emotional response leading you on false grounds and often towards disaster.
It helps when you know how to bet intelligently and not emotionally.
Example:
I’ve only ever seen white swans. Therefore, all swans are white!
We can all agree this sentence is far from true. Simultaneously, it’s easy to understand the mechanisms behind this form of logic. The same happens when you sit at a casino table or place a bet on your favourite team.
A little insight into its history will help you realize why it’s essential to be aware of its existence and how you can minimize its impact.
The Fallacy of Monte Carlo
The glamour capital of the world is also the birthplace of the gambler’s fallacy definition.
On the 18th August 1913, during a roulette game at the iconic Monte Carlo Casino, black landed 26 times in a row!
As unbelievable as it sounds, the effect of this sequence is even more puzzling. Players around the table kept raising their bets and placing them on red. After all those rounds, it was about time for the ball to land on a different colour.
That was their belief at the time, and it serves as the perfect gambler’s fallacy example.
As a result, those that placed bets on red lost a vast sum.
At least, until the unbreakable rules of probability finally landed the ball on red. If only players were aware of the gambler’s fallacy definition, perhaps this story would have had a better outcome.
That same principle applies to all of us when gambling, regardless of the game we love to play. Gambling is a particularly emotional activity, and that’s why asking players to remain rational feels so unnatural.
The Coin Tossing Example
The simplest of games serves its purpose as a straightforward gambler’s fallacy example. The toss of a coin always faces a 50-50 chance. The coin will either land Heads or Tails.
If you want to test the gambler’s fallacy principles for yourself, play with a friend and start by betting on the outcome of 10 tosses.
Whoever wins gets twice the wager or the corresponding odds – working out at +200, it corresponds to an even 50%.
You keep betting $1 on Heads. If you win, you get $2, and it can easily turn out as the following scenario:
- In 10 tosses, you land Heads 5 times and Tails 5 times. You’re right where you started – no win, no loss.
- You agree to a second round and another ten tosses. This time around, you land Heads 6 times and Tails 4. A decent result, as you’ve just made a $2 profit!
- In the following ten tosses, you only land Heads once and witness an incredible nine times for Tails. Due to mere chance, you’re now $6 down.
If you landed Tails that many times in a row, it’s more likely you could land Heads more often this time around, correct?
Wrong!
Top Tip!
The result of each toss is statistically independent. The probability to land Heads OR Tails is always the same for each toss, regardless of the previous outcome.
If you toss a coin 20 times and you land Tails 15 times in a row, your intuition will trick you into thinking the odds of landing Heads next are much higher.
It is a great time to ignore intuition and stick to facts. You always face a 50% chance on each round in similar games.
The following game categories tend to deliver ideal gambler’s fallacy examples:
- Rolling dice
- Simple bets on the roulette
- Slots
- Blackjack or poker cards dealt on each round
There are several other examples in the gambling world, but we should stick to instances where you face odds as close to 50% as possible.
The Psychological Traits of the Gambler’s Fallacy
Our brains have developed over thousands of years to achieve quite an impressive standard. However, they’re still prone to simple, avoidable mistakes, even in the face of mathematical evidence.
There is a constant battle between this flawed form of logic and what science indicates. When gambling, that nature becomes ever more potent by leading you to bet against several consecutive results.
Top Tip!
More concerning is perhaps the fact that the event occurs even when players are perfectly aware of its existence – our emotions play the most significant part here.
Let’s go back to our coin-tossing example in the exact moment we went from $6 up to $2 down. Any loss impairs judgement, so you’ll naturally want to find yourself regaining an upper position.
When playing in a casino or sportsbook, there is always a statistical margin that benefits the house. When playing roulette for real money, the odds of landing black or red are not exactly 50%, but instead, 48%. There is, after all, a reason why the green pocket is present.
The same happens with sports betting. If a tennis match considers both players equally strong, the odds return a theoretical +200, representing 50% for each player. However, you’ll find these available to you somewhere around +180.
As a result, you don’t have as much room to recover a lost bet as you think. All the more critical reasons why you should remain aware of the gambler’s fallacy definition.
To achieve success at sports betting, you must define a strategy and have the emotional strength to stick to it.
Avoid letting emotions play a part in your decisions, and don’t assume the next time around will work out better just because it didn’t happen in the previous round. The same if you win a few rounds and feel you’re on a streak.
We’ll repeat it: each event is independent of the previous one.
Science keeps digging into the human brain and what commands these emotions. The more it advances, the more it finds a link between the rewarding system in our brains and several forms of addiction.
The same is true for scenarios where that stimulus is absent. There is an urge to recover from a loss, the reason why you may find yourself doubling the next bet. An adverse outcome provokes an exacerbated reaction from the player.
Science claims these are similar to the survival instincts that kick in when faced with a risk of death.
Impressive? We think so too.
Gambler’s Fallacy in Sports Betting
The situation gets more complicated with sports betting. The offer in the market is extensive, so finding those that grant a genuine 50% chance is particularly hard.
Let’s take the always exciting American Football sports bets as an example and focus on the main outcome:
- The home team wins
- Both teams tie (except for playoffs)
- The away team wins
It’s also essential to retain that these matches are not statistically independent. Several other factors affect the outcome, such as team morale, home advantage, star player performance, injuries, etc.
However, the same lessons learned at casino games when recognizing the gambler’s fallacy can be helpful if you plan to make the best of sports betting.
Again, maintaining your emotions under control will prove the main factor towards success. Easier said than done, and also the reason why we suggest a few tips to keep your eyes on the prize.
How to Avoid Being a Victim of Your Emotions
1. Reason With Yourself
Remain rational. Keep previous results behind your back and out of the next round of bets. That is the only way not to let emotions take the best of you. Justify any bets with statistics and rationality, and disregard personal considerations.
2. Exercise Discipline
The Martingale Strategy is right: you can’t always win, nor can you always lose. Define a strategy, and don’t let a series of poor results let you down. It’s all part of the game.
Having the discipline to stick to a well-based strategy is challenging. It won’t always succeed, but you have to give it a chance to work out first, which leads us to our next point.
3. Patience and Persistence
Moderate your expectations. Most gamblers believe they’re off to success from the very start. Only a few can manage emotions when facing defeat and still keep focus.
Top Tip!
Success takes time – in life and gambling – and it’ll take some effort as well. Don’t give up once you hit a few bumps on the road.
4. Keep Learning
Unfortunately, this means learning from your own painful and sometimes expensive mistakes. Only then can you redefine your approach and optimize your strategy.
There are no guarantees, but you may find a profit once you master a few thin lines.
Finally, whatever your emotional response to gambling is, learn to identify your limits. Keep playing only and while it’s still fun.
Walk away if it causes any form of stress, personal or family issues.
FAQs
How do I avoid the gambler’s fallacy?
Stick to strategy and statistics. Even when you’re aware of its existence, your brain will trick you into believing your luck is about to change. Resist its appeal and stick to a robust strategy.
What is the best example of the gambler’s fallacy?
Most games follow the principle of independent events. That means the current round has no link to the previous one. However, our brains process this information differently and give us a sense that a sequence is about to be broken.
What are the dangers of the gambler’s fallacy?
Losing money and, in worse cases, even developing several types of addiction. Gambling should be fun and exciting. However, everyone has a different emotional response to defeat. Only by successfully controlling your emotions can you avoid the fallacy.
Is the gambler’s fallacy a real thing?
Yes. Science has identified a clear, emotional link between gambling and the reward system in our brains. How we respond to those stimuli, especially in the face of defeat, can easily lead us to apply flawed logic while gambling.
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