There are many gamblers in the world, 85% of American adults have gambled at least once in their lifetime [s], the global gambling industry was estimated to be 335 billion $ in 2009 [s]. Online gambling is gaining momentum, and with the advent of crypto-currencies, it is taking it to a new level. Still land based gambling is the predominant one, but given how much bitcoin gamblers are out there, this may change very soon.
To answer the question in the title, yes of course it is, gambling is profitable, but only for the casinos. Every gambler gambles in expectation of earning money, and then they end up losing money. Gambling was never designed to make you money, it is just an entertainment service, where the servicer (the casino) makes money for providing you this service. Even the casinos warn people to only gamble for fun, and not for profit, but nobody listens.
Whenever we are investing, we expect more money to get back than we invested. In gambling the opposite happens.
The fundamental difference between gambling and investing is that:
In investing the potential expected value is positive, while in gambling it is negative or zero. The expected value is the potential return/profit of the investment, and a negative expected value is identifiable as a house edge.
https://en.wikipedia.org/wiki/Expected_value
If we flip a coin, the probability of landing on heads and tails is 50-50%, which means that we are neither at advantage or at disadvantage when betting on either. Our expected value here is 0, and we will end up with 0 profit over the long term (which could be positive profit, or negative in the short term due to Variance)
In a casino, you will see exciting combinations between the payout rate and the probability to hide the fact that you will still lose:
- You will see a
50%probability withx1.96payout rate, is a2%house edge, which means that the house will drain2%of your betsize over the longterm - You will see a
97%probability withx1.01payout rate, is a2%house edge, which means that the house will drain2%of your betsize over the longterm (don't let the high probability to fool you) - You will see a
1%probability withx98payout rate, is a2%house edge, which means that the house will drain2%of your betsize over the longterm (don't let the high payout rate to fool you)
Casinos will surely play on the fact that you didn't calculated your expected value, and they will profit from it, while you lose. You can calculate the EV with this simple formula:
EV = (Payout Rate - 1 ) * Probability_of_Win - ( 100 - Probability_of_Win)
If it's negative, then don't bet, unless you want to lose on the longterm. Hint: It will always be negative.
So we can see that only the house wins longterm, and the gamblers will eventually end up broke, as the math is solid, and the house edge will drain your account down to 0 eventually.
Few people might win short term, but if they don't stop, in the long term, their account goes to 0 as well.
But what about Gambling Strategies ?
They are scams. Many people are selling gambling guides on the internet. If they would know how to gamble profitably, they would gamble themselves, and not try to scam people with their magical strategies.
But what about Martingale Betting System ?
It only works if you have infinite money supply, at which point you don't need to gamble. In the martingale system, the risk grows exponentially, while the profit grows linearly. You don't need to be a rocket scientist to figure out what this means. It means that your account will be wiped out sooner or later if you continue the double down.
But what about luck?
Again, if you are lucky you might win the lottery. If you stop, then you keep the money. If you continue buying more lottery tickets with the lottery prize, chances are that fortune won't smile at you again, and you will lose all your money. If gambling would be so profitable, then everyone would be a gambler, and nobody would be a farmer, an auto-mechanic or a chef. It's only for entertainment, since nobody can be lucky consistently.
But what about Poker ?
There are some games that require skill to win, and we don't consider them as gambling. I am not a poker player, but from what I heard, there is more skill involved there than luck, so your competitiveness and skill will probably determine your profit there. There are other games too where skill is the primary requirement, but when we talk about gambling we refer to the random games: dice, roulette, baccarat, slots, etc.
So this is what gambling is. It is a form of entertainment, where only the service provider, the casino makes money, while the players sometimes win, more times lose.
Don't get me wrong, I have nothing against gamblers, I gamble too some times, but you have to recognize, that you won't make consistent profit from gambling.
If you want to make consistent profits, your will have to find another profession. You can always follow me, I definitely know how to make consistent profits. You can always learn a few tricks from me, after all my username is @profitgenerator :)
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