Having lived in Hong Kong for a while I had access to Macao, which is the biggest gambling city of the world. That's right! It has actually surpassed Vegas now in terms of revenue. An obvious explanation is the huge number of rich Chinese people who visit to gamble and there are many of them. However, in gambling their is always (almost) one winner. The House. The only way to consistently make money in a casino is to own one. That's true and I'm speaking from personal experience when I say that.
Non-zero sum game
You might have read about how house has a slight probabilistic advantage. Here is what it means. Let's take the game of roulette with a single zero. The odds are defined assuming that there are actually 36 numbers while there are 37 when you include this zero. In an unbiased scenario also, over a long run there should be reversion to mean and the house will keep chipping away some money from the players. That means that indeed casino is a non-zero sum game for players, cuz the expected value of all the bets are negative, even if fractionally so. That's the only way to get rich at a casino.
Blackjack and Poker
Now, there might be some players of blackjack who can count, some players of poker who consistently win but both of these games require a different set of skillset to win. At least in the case of poker, it cannot be completely methodical. Even if you can calculate very fast in your mind you cannot purely bet on the probabilities and win. Because in the end probabilities are just probabilities. Maybe over tens of thousands of events those probabilities play out but in one event the outcome can be quite random.
Gambler's Fallacy
This is definitely one of the widely made errors while gambling. The assumption that probability is going to play out in a small set of events and that one event and the event following it are actually connected. The simplest form can be playing black and red on a roulette table. Often people connect the two rolls. Once you have a red, then they would say that now there is only a 1/4 probability of having another red. Because if we combine the two events, the probability of having two reds is only 1/4. However, this argument is completely flawed as the events are actually serially uncorrelated and independent. This same logic people apply over longer time periods. I observed a guy betting after 3-4 reds in a row, obviously assuming that the probability that another red will come out will be very low (1/32). This belief is what is called Gambler's fallacy and this is definitely one of the biggest ways Casinos make money. There are many strategies designed that try to take into account this information, and plays always based on the updated set of probabilities to find an edge. However, in reality there is never an edge. The only one who has an edge is the house. The house has a positive expected value in all the bets.
Non-zero sum game
You might have read about how house has a slight probabilistic advantage. Here is what it means. Let's take the game of roulette with a single zero. The odds are defined assuming that there are actually 36 numbers while there are 37 when you include this zero. In an unbiased scenario also, over a long run there should be reversion to mean and the house will keep chipping away some money from the players. That means that indeed casino is a non-zero sum game for players, cuz the expected value of all the bets are negative, even if fractionally so. That's the only way to get rich at a casino.
Blackjack and Poker
Now, there might be some players of blackjack who can count, some players of poker who consistently win but both of these games require a different set of skillset to win. At least in the case of poker, it cannot be completely methodical. Even if you can calculate very fast in your mind you cannot purely bet on the probabilities and win. Because in the end probabilities are just probabilities. Maybe over tens of thousands of events those probabilities play out but in one event the outcome can be quite random.
Gambler's Fallacy
This is definitely one of the widely made errors while gambling. The assumption that probability is going to play out in a small set of events and that one event and the event following it are actually connected. The simplest form can be playing black and red on a roulette table. Often people connect the two rolls. Once you have a red, then they would say that now there is only a 1/4 probability of having another red. Because if we combine the two events, the probability of having two reds is only 1/4. However, this argument is completely flawed as the events are actually serially uncorrelated and independent. This same logic people apply over longer time periods. I observed a guy betting after 3-4 reds in a row, obviously assuming that the probability that another red will come out will be very low (1/32). This belief is what is called Gambler's fallacy and this is definitely one of the biggest ways Casinos make money. There are many strategies designed that try to take into account this information, and plays always based on the updated set of probabilities to find an edge. However, in reality there is never an edge. The only one who has an edge is the house. The house has a positive expected value in all the bets.
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