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Monte Carlo methods – Why it's a bad idea to go to the casino

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Re: Monte Carlo methods – Why it's a bad idea to go to the casino

#31

Post by ImaCake »

taneq wrote: post #28
55555 wrote: post #11

It's more complicated (worse) than this. That the house has a small edge only tells a small part of the story. When people go to vegas for a weekend, they might have a number in their head they are willing to gamble. If they dont, then that number is their bank account balance. Then they start flipping coins, and often they keep doing this until they go bust. They rarely cash out when up but they always lose when the…

All true, but also this article is about Monte Carlo numerical methods rather than actual casinos. "Flipping a coin until you get enough tails in a row" is a really good way to describe long term gambling, though. I'm gonna borrow that.

The history of probability theory and risk management is filled with mathematicians who were gamblers or had patrons that were. Introducing monte carlo methods with gambling seems very appropiate considering the history of the topic!

Re: Monte Carlo methods – Why it's a bad idea to go to the casino

#34

Post by slewis »

Great article showing how easy it is to experiment with probability using Monte Carlo methods. You don’t need any fancy libraries or deep mathematical knowledge.

Of course you should always try to have a deeper understanding if you want to make serious conclusions. But I felt this article got the concept across really concisely! Nice work.

Re: Monte Carlo methods – Why it's a bad idea to go to the casino

#35

Post by Slothrop99 »

freerobby wrote: post #9
fatbird wrote: post #6

Earlier quoted context omitted.

I was able to play martingale in a casino in a video game, so a limited wallet wasn't my problem, and I made money in the long run, but it exposed a subtler problem with Martingale: You only ever win your initial bet back; the rest is covering losses. If you have the cash to withstand 20 losses, then the initial bet, in comparison to your stake, is basically a rounding error. Who cares about winning $1 when you have…

Yes -- this is what is commonly misunderstood about Martingale. What Martingale really does is change the probability distribution of outcomes to be heavily weighted toward winning a very small amount of money. You can, for a given number of plays, use Martingale to make the odds of winning greater than the odds of losing. However what you can't do, is change the expected value of that set of plays. So what you've re…

Yeah, I'm running the Martingale simulator in OP, and getting frequent outcomes where I was able to gamble 10+ days starting with $10000. I suspect that's what gamblers really like about it -- not more money, but more gameplay.

(There's also the gambler's calculus that while they're losing money playing, they're being comped drinks/rooms/meals/shows/etc at a resort.)

Re: Monte Carlo methods – Why it's a bad idea to go to the casino

#37

Post by arsenide »

I work on Monte Carlo simulations professionally for casino slot games.

I wish that more depth was presented here: what percentage of the time do you get favorable vs unfavorable outcomes with each strategy? For further depth, use different types of players (with different exiting conditions).

Perhaps I should write such a blog post at some time..

Re: Monte Carlo methods – Why it's a bad idea to go to the casino

#38

Post by paulkon »

arsenide wrote: post #37

I work on Monte Carlo simulations professionally for casino slot games. I wish that more depth was presented here: what percentage of the time do you get favorable vs unfavorable outcomes with each strategy? For further depth, use different types of players (with different exiting conditions). Perhaps I should write such a blog post at some time..

Please do, I'd love to read more about this!

Re: Monte Carlo methods – Why it's a bad idea to go to the casino

#39

Post by stordoff »

scarejunba wrote: post #21
wavefunction wrote: post #12

Blackjack has been a source of success for me though I'm unconventional in my betting strategy which seems to enrage the other players even when I break the dealer consistently.

More likely it's just numbers, right? If 1024 people flip coins ten times in a row, it's expected that one of them gets 10 heads. But he's not a genius, right? Of course you should always back yourself. So more power to you if you're winning in this way. At least you get to keep playing :)

Derren Brown had an interesting example of this on UK TV a few years ago. It's nothing new, but showing it this way demonstrates how you can get drawn in:

> The System, a Channel 4 special in which Brown shared his "100 percent guaranteed" method for winning on the horses, was first shown on 1 February 2008.

> The show was based around the idea that a system could be developed to "guarantee a winner" of horse races. Cameras followed a member of the public, Khadisha, as Brown anonymously sent her correct predictions of five races in a row, before encouraging her to place as much money as she could on the sixth race.

> After Brown had placed a bet of £4,000 of Khadisha's money on a horse in the final race, he explained how "The System" worked. He had started by contacting 7,776 people and split them into six groups, giving each group a different horse. As each race had taken place 5⁄6 of the people had lost and were dropped from the system. Brown had a different person backing each horse in each race, and one individual, Khadisha, won five times in a row.

https://en.wikipedia.org/wiki/List_of_Derren_Brown_shows#Der...

Re: Monte Carlo methods – Why it's a bad idea to go to the casino

#40

Post by daveFNbuck »

55555 wrote: post #11

It's more complicated (worse) than this. That the house has a small edge only tells a small part of the story. When people go to vegas for a weekend, they might have a number in their head they are willing to gamble. If they dont, then that number is their bank account balance. Then they start flipping coins, and often they keep doing this until they go bust. They rarely cash out when up but they always lose when the…

People playing until they go bust doesn't actually affect the casino's take, except insofar as it means more people are gambling. If someone leaves when they're up and someone else takes their place at the table, the casino makes exactly as much money as if the first person hadn't left.
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