Friday, July 15, 2016

Gambling, Casinos, and Math!

Whenever I pass through Vegas, I think about something some friends told me in regard to gambling.  They lived there at the time and always said that if you want to use slot machines, use the ones at the grocery stores because the odds are better.  I never thought about that until I stumbled across a website that explains odds at casinos in detail.

Play, Card Game, Poker, Poker ChipsIts actually a non-technical discussion on the basic math associated with casinos and how they make their money.  Its really quite fascinating and give insight into the whole topic.  Furthermore, the examples are quite detailed and easy to follow.

 The author explains why math is so important in the gaming industry, discusses house edge, explores odds vs probability, clarifies win rate, goes into volatility, risk, player value, and complementaries.  I like that the paper even tackles casino pricing and mistakes along with gaming regulations and mathematics.  At the end are tables that show the house advantage for the most popular games and for major casino wagers.  Please note there is a comment at the end about this being the authors intellectual property and it cannot be used without permission.

You might wonder why we'd look at casino math in a math class.  Aside from seeing people card counting in certain television episodes and watching those poker games on certain channels, it might be good to know how casinos actually work.

I know a guy who used to earn a fair bit money by gambling but most people who go do not win much money.  In the long run, people are lucky to break even and its nice to know what the house edge is vs your actual chances of winning.

This slide share show specifically at the mathematics of casinos. It is very technical but once you get about half way through, you hit the formulas showing the mathematics that apply to gambling itself.  The equations are clear and its a nice presentation.

On the other hand, the Mathematics of Gambling out of the UK goes into specific games to look at the gambling mathematics for Roulette, Craps, Blackjack, Poker, Bingo, Keno, and Slots but its all based on the theory of probability.  I checked the section on Poker and the author determined the number of ways of each hand such as a Royal Flush occur.  I found it quite interesting.

There is the nice site with a PDF on an Introduction to Gaming Mathematics that explains the math and gives lots of nice examples.  Its a well written 37 page paper that has lots of great information on this topic.  I think this is the paper I'd read before attempting this unit because I don't really gamble.  The last time I went to a casino, I took a grabbed the nickles and dimes from my purse and used those for the slot machines......LOL.

Enjoy exploring this topic.  Yes this is a good topic for a math class because it is applied probability and people need to know why you are more likely to loose in the long run.