Why do Casinos always win?
25 Oct 2020
The downtrend in 2020 indeed causes many people to lose money heavily. That is the reason why BMV provides mainly knowledge, not trading signals or suggestions. Instead of giving you fish, we want to give you a fishing rod.
Today, in the context of the downtrend of the Altcoins market is still not over, I will summarize some important knowledge that you need before stepping into the Crypto market - a really big casino. And one of them is what people call “The Casino Secret”.
In Gambling, there’s a well-known saying of successful players, that is “The house always wins in the end”. Of course, the House, also known by its familiar name “Casino”, is not a charity. Casinos are also businesses, so they have their own business model and that model must give them enough profit to operate and grow. And in their business model, there are only two cases: Either the player loses and the casino wins, or the player wins and the casino loses.
As we can see, the casino business is always profitable at the end of every quarter or year. That means they always win. So what is their secret?
Many people may think it’s simple, however, every year, gamblers are still broke. And many courses about the casino’s secrets are still available online for thousands of dollars.
The reason casinos always win over long-term periods is because they always have an advantage in every game, even if it's just a little. It is this little advantage that makes gambling become a game of probability. And the casino is simply having more than 50% probability, that’s all.
A good example for this is the famous Roulette game originated from France. In this game, players simply bet on colors (red or black), even or odd numbers, and low (1-18) / high (19-36) numbers. If you hit the color or the number you choose, you will be the winner. This seemingly simple game turns out to be one of the most profitable games for the casino for a simple reason, that is the number 0. This is the money-making number of the casino.
If there were only numbers from 1-36 with black or red colors, the winning probability of the player will always be 50-50. However, with the appearance of the number 0 (some US casinos even have number 00), the winning probability of the casino will always be between 54-55%, and so is the losing probability of the player. This is the advantage of the casino, or “the secret”, which makes the casino always win.
If you still haven’t figured it out, imagine a Roulette with a 55% chance of winning. For every $1 million placed on the casino, the casino will be able to make more than $50,000 in profit or break even. Gradually, if not for 1 day, maybe for 2 days, 3 days or longer, the player will lose money since their winning probability is lower than 50%, and that’s what the casino wants. They don’t want to burn the player’s pocket in a single bet, rather, they prefer taking the money gradually. So the question is, why can this seemingly simple thing cause so many gamblers to lose money?
Even if gamblers know the secret, many players still do not fully understand the core of losing money lies in the volume they play, not the amount of money. Many people are willing to spend $100 to play this red and black game, thinking like “Oh, if the losing amount is that small, then if I play $100, I just lose $5, that’s just a bowl of Pho”. However, it’s not what they think it is.
For example, instead of betting $100, Mr. A bets $10 each time he spins the roulette. In 1 hour, the roulette can spin about 50 times. In 4 hours, that number will be 200 times. So in fact, Mr.A doesn’t play the game with $10, he plays with 10504, which equals $2,000. And if the losing rate is 5%, the money Mr. A loses will be $2,000*5%, which equals $100. The casino will take all Mr. A’s money before he realizes what’s happening. The casino even has some techniques to make Mr. A continue to stay, such as having beautiful female staff, putting no clocks and windows in the casino.
The house’s secret of victory is a game of probability. The secret of the player’s loss is the dangers of double holes, volume or losing control.