Gambling used to represent as an entertaining entity for people. People from all domains used to do it for fun. Luck was/is the important factor in winning a fortune and losing it all. But the lucrative winnings always used to attract people. But what if the game can be played knowing which number will come next? Is this even possible? Let’s find out.
Gambling is a sort of probability when you see it from a mathematics point of view. The statistics it involves require a particular skill which only a few people possess. They use these skills to guide their gambling decisions. There are mainly three basic principles in the mathematics of gambling: probabilities, the volatility index, and expected value. Knowing and understanding these topics can go a long way to make you champion like Eastgate. You might have heard his story. Back in November 2008, a player name Peter Eastgate defeated 6,843 other gamblers. He was crowned as the youngest ever player in World Series of poker. He also earned $9,152,416 in cash as a result.
This win wasn’t a result of luck but was of mathematics. Each and every event in gambling has absolute probabilities that also depend on sample spaces. Or rather on the possible number of outcomes. For example, if you roll a dice there is one in six probabilities that you will get your desired result. For a game like a poker, this is even smaller.
Professional players understand this probability and the sample space of the game. Which they combine to estimate the odds of particular hand and thus guiding their choices. Along with the probabilities they are also interested in how much money they can theoretically win from one hand. This is called expected value. Mathematically it is defined as the sum of all the probabilities multiplied by their respective gains or losses.
This can be easily explained by an example. Suppose there is a situation wherein a dealer pays $1.00 for every head and takes away $1.00 for every tail than the expected value here will be zero because of the probability of both occurring is same. This is called a fair game. However, if the dealer gives $1.50 for every head that gambler flips than the expected value will be $0.25. Thus for every 100 games, a gambler can walk away with $25.
As you can see the concept of expected value is very important in gambling. Because it allows the gambler to know the amount he can walk away with. The final term volatility index is based largely on luck. It allows the players to know the odds of earning their expected value for some number of rounds played. If the index is high than the variation between the expected and actual outcomes is also high, and this creates larger chances of winning the EV. Gambling is a science as well art concept. Only those skilled ones can combine to reap huge rewards.