Why Gamblers Rarely Win

Casino Stats: Why Gamblers Rarely Win

In a down economy, it's normal to start
thinking of alternative ways to generate some
extra money, but if you're
tempted into thinking
gambling is one of those good alternatives, you
need to keep reading. Once you step foot into a
casino and exchange your
money for chips, you've
sold away your only advantage, which is staying
out of the casino to begin with. Casinos can bring
great shows, food and
entertainment, but statistically
they won't bring you much more than that.
(For more, see Going All-In: Comparing Investing And
Gambling.)

IN
PICTURES: 7 Forehead-Slapping Stock Blunders

Big Business and Big
Profits

To say casino gambling is a lucrative business
would be an understatement. Last year, commercial
casinos brought in a
gross revenue of about $31
billion and Indian casinos cashed in for about
$26 billion. Although revenue from private casinos
was down last year,
it was still three-times higher
than Hollywood's 2009 ticket sales revenue
of $10.6
billion, a banner year for the silver screen. It's
no surprise
where those profits are coming from,
but that didn't stop over 36 million
visitors from
showing up in Las Vegas last year alone, with some
hoping
to win more money than they came in with.

Games of No Chance

Math is
the universal language, and it rarely ever
lies. Each game you play at a
casino has a
statistical probability against you winning. Every
single
time. This house advantage varies for each
game, and helps ensure that over
time the casino
won't lose money against gamblers. For people who
are
really good at Blackjack, the advantage for the
casino might only be 0.5%,
but certain types of slot
machines might have a 35% edge over a player, and
other games fall somewhere in between. The slot
machine odds are some of
the worst, ranging from a
one in 5,000 to a one in about 34 million chance
of
winning the top prize when using the maximum coin
play.
(Read
more, in Are You Investing Or Gambling? )

The house advantage obviously doesn't mean that
you can't
win, because people do and sometimes
they win substantial amounts, but it
does mean
that the more you play, the more the math works
against you
and the better the chances are of
you walking out of the casino with less
money
in your wallet than when you came in.

IN PICTURES: 6 Biggest Millionaire Flops

Everyone's (Not) a
Winner

Think of all those profits we mentioned earlier
as all of the losses from casino patrons each year.
Of course, some of
the money may come from other
venues within the casino, but the breadwinner
for
this industry is the games. Now, think of yourself
walking into a
casino with the feeling that you're
going to beat those odds (or profits)
because luck,
whatever that is, is on your side. Not likely. You
can't
even bet on winning or losing streaks either.
If you'd had a slew of bad
hands, the likelihood of
that turning into a winning streak simply doesn't
exist, it's not in the cards, or math for that matter.

The Betting Rip Current

Aside from the
entertainment of casinos, some
people do get swept into an addiction that
far
surpasses the entertainment value of the games.
Only a small percentage of gamblers, about 5%,
reach that
point, but unfortunately it's
estimated that their losses
make up a quarter
of the profits for the casinos. This is all the
more
reason to understand the house advantage
and how it works against a player
who has lost
a significant sum and is spending lots of time
in the
casino trying to win it back. The more
a player struggles to get ahead, the
more he
gets pulled into additional losses.
(Read more background info,
in Sinful Investing: Is It For You?)

Quit While You're Ahead

Almost every time, it's in your best financial
interest not to walk
into that casino and place
the bet - the math simply isn't your friend.
For those who want to press their luck anyway,
make sure to quit while
you're ahead, because
that winning streak you're on is definitely all
in
your head.
(Looking for more action?
Check out A Quick And Dirty Look At Sports
Gambling.)

Some reports indicate that 80% of casino profits come from 20% of patrons, as well as a 70%/30% splits.

Of Gambling Addiction, if the rate in Massachusetts is 6%, as Massachusetts Senator Stanley Rosenberg has indicated [Governor Patrick tosses 308,580 under the Casino Bus ], how do we justify that sacrifice? If each of those NEW GAMBLING ADDICTS, created by government sponsored gambling, costs $13,000 per year, where is the revenue gain for the Commonwealth?