I bet a lot of punters have not even heard what Gambler’s Fallacy is, let alone know how it impacts their gambling.
This short guide attempts to explain what it is, and hopefully, make gamblers’ think twice about placing a bet when they think the next outcome is ‘overdue’.
In a nutshell, Gambler’s Fallacy occurs when a person believes that because something hasn’t happened for a while (in sequence), it will in the near future.
Using a coin toss example, a person believes that a Tails ‘is overdue’ after watching the sequence of Heads, Heads, Heads, Heads. They assume the next toss will (most probably) result in a Tails. What gamblers fail to realise is that past results do not have any bearing on the probability of any random event. The next flip of the coin is still a 50/50 chance.
The most famous example of Gambler’s Fallacy occurred at the Monte Carlo casino in Las Vegas in 1913. The roulette wheel’s ball had fallen on black several times in a row.
This led people to believe that it would fall on red soon, and they started pushing their chips, betting that the ball would fall in a red square on the next roulette wheel turn. The ball fell on the red square after 27 turns. Accounts state that millions of dollars had been lost by then. (investopedia.com)
The randomness of short term results is just variance and gamblers fail to account for this.
If you flip a coin 20 times the results could easily be 18 Heads & 2 Tails or 16 Tails & 4 Heads, following any random sequence. However, flip the same coin 10,000 times and the law of large numbers dictates that the results would be mostly 50/50. Try it and let us know the results.
When on a losing streak, many gamblers’ convince themselves that they must be close to a winner. This mentality keeps ‘problem’ gamblers chasing that big win that will wipe out their loses and even put them ahead. Unfortunately, this usually ends in the complete opposite.
Before you place your next bet, please remember Gambler’s Fallacy.
Just because Trap 3 hasn’t won all night at Romford or the favourite at Southwell hasn’t come in yet after 4 races, doesn’t mean it will win the next race, or the next race after that or even the next race after that. You get the picture.
For help, support & advice about gambling please contact the National Gambling Helpline over the phone 0808 8020 133 or online.