What we learned so far• Gambling has been around for thousands of years.

• Modern gambling differs from older forms of gambling in three major ways:

• The games have changed.

• Most gambling today is against “the house” (a casino, racetrack, bingo hall, sports book, lottery provider) that is in the business of making money.

• Gambling is more widely available now than it’s been in over a hundred years.

• When betting against the house, it’s possible to win once in a while, but it’s impossible to make a profit over the long run. The house makes money by ensuring that it keeps the mathematical advantage in all games (“house edge”).

• Gambling goes through cycles of legalization and prohibition.

• When gambling is available for many years, its negative consequences become apparent, so gambling is restricted or prohibited. The main negative effect is problem gambling.

• Gambling becomes re-legalized by a new generation—people who are unfamiliar with its negative effects.

• Gambling can be as addictive as drugs or alcohol.

• There are many signs and symptoms of problem and pathological gambling.

What we learned so far

• Risk factors for problem gambling include• being young (teens to mid-20s) and/or male

• gambling at an early age

• having close access to gambling opportunities

• having friends who gamble

• having parents who are heavy gamblers or problem gamblers

• having other addictions

• having an early big win

• not understanding gambling fallacies

• playing rapid forms of gambling with a high frequency of betting (for example, slots and other EGMs)

• having difficulty controlling impulses

• mental health conditions, such as depression

What we learned so far

Lesson 3Gambling Fallacies

fal⋅la⋅cy fæl ə si/[fal-uh-see] –noun, plural -cies. 1. a deceptive, misleading, or false notion, belief, etc. That the world is flat was at one time a popular fallacy.

2. a misleading or unsound argument.

3. any of various types of erroneous reasoning that render arguments logically unsound.

Synonyms:misconception, delusion, misapprehension

Excerpted from Dictionary.com Unabridged, based on the Random House Dictionary, © Random House, Inc., 2009.

• Roughly what is the median household income in the United States and Canada? a) $30,000 a yearb) $40,000 a year

 

• Roughly what percentage of U.S. and Canadian high school students have not tried alcohol, cigarettes, or marijuana in the past year?a) 5 percentb) 15 percent

Question 1: What do you think?

c) $55,000 a year

c) 35 percent

Fallacy 1: Normalizing behavior.

• When people guess how “normal” their own behavior and experiences are, they compare themselves to people they know.

• We might underestimate household income because most people we know make less than $55,000 a year.

• We might underestimate how many high school students are drug- and alcohol-free because we all know teens who use these substances.

• How does this apply to people who gamble?

• Most overestimate the number of people who behave as they do, thinking, “Lots of other people gamble just as much as I do, so it can’t be that bad.”

Question 2: What do you think?

• Do more people die from stroke or accidents?

• Almost twice as many people die from strokes compared to accidents.

• Do more words start with the letter R or have R as the third letter?

• Three times more words have R as the third letter.

Fallacy 2: Confusing “often” & “memorable.”• People tend to judge how often something happens by how

memorable it is.

• We might think that more people die from accidents than strokes because accidental deaths are often reported on the news.

• We might think that more words start with the letter R because we remember words by their first letter, not their third.

• How does this apply to people who gamble?

• Wins are memorable because they tend to be larger and more exciting, though less frequent, than the smaller, more regular losses.

• Most gamblers remember their wins better than their losses, so they often believe that they are ahead when they are actually losing.

Question 3: What do you think?

You were wearing green socks when you got an A on your last math test. What is your best strategy for getting an A on your next test?

a) Wear the same green socks for the next test.

b) Wear red socks for the next test.

c) Study! The socks you wear have nothing to do with it.

Fallacy 3: Superstitions.

• Even though most people know that socks have nothing to do with their grades, many will still wear them “for luck.”

• Can you think of other examples of superstitious behavior?

• How does this error apply to people who gamble?

Many mistakenly believe they can improve their luck by repeating superstitious habits falsely connected with past wins.

Question 4: What do you think?

• This person is very private, wears thick glasses, likes books, and her friends consider her boring.

• Is she more likely to be a saleswoman or a librarian?

• This person is almost certainly a saleswoman!

Fallacy 4: Ignoring the odds.

• There are about fifty saleswomen for every 1 librarian in North America.

• Even if 100 percent of librarians fit this profile (1 out of 1) and only 10 percent of saleswomen fit this profile (5 out of 50), there would still be five times as many saleswomen with this profile compared to librarians.

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1

2

3

4

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salespeople librarians

• Most believe they can win money gambling, ignoring the fact that the house edge makes this mathematically impossible.

• Many buy lottery tickets despite the fact that they have almost no chance of winning.

• People sometimes buy lottery tickets because they know of someone who has won.

• In Canada, Lotto 6/49 has had two draws a week for the last twenty years, resulting in thousands of jackpot winners. It would be unusual if someone was not aware of a jackpot winner.

• However, people forget that it took 30 billion tickets (more than 4 times the earth’s population) to produce 2,000 winners.

How do people who gamble ignore the odds?

You flipped a coin and it came up heads 100 percent of the time. How many times did you probably flip it?

a) Ten times

b) Two times

c) Equally likely to be either two times or ten times

Question 5: What do you think?

Fallacy 5: Forgetting the law of averages.

• Law of averages: The more times something happens, the closer the average result will be to its true odds.

• It’s not unusual to flip a coin twice and to get heads both times. But it’s very unlikely for heads to come up ten times in a row.

• Let’s test it! Everyone who has a coin stand up and flip the coin. Sit down if you get tails. People who are still standing should flip it again and sit down if they get tails.

• How many people got two heads in a row and are still standing?

• The people who are still standing should keep flipping and sit down once they get tails. Did anyone get ten heads in a row?

Fallacy 5: Forgetting the law of averages.

• Problem gamblers fail to realize that although short winning streaks are common, long winning streaks are impossible.

• People who appear to win more frequently than other people—who seem luckier—have usually just played more often. They’ll also have more frequent losses than other people, but they don’t brag about the losses!

Question 6: Question 6: What do you think?What do you think?

Who is more likely to throw a pair of sixes?

• someone who has just thrown a pair of sixes

• someone who has not thrown a pair of sixes in the last ten throws

It’s a trick question! Both are equally likely..

Fallacy 6: Random events are not influenced by past history, but people believe they are.

• In most real-life situations, history does help us predict the future…

• If it was cold yesterday, today is more likely to be cold than very hot.

• A team that has lost seven games in a row is likely to lose the eighth game.

• . . . so we look for patterns and expect events to be predictable.

• This expectation works against people who gamble because most games are designed to keep the odds exactly the same each time you play, regardless of the previous round.

Dice, roulette wheels, coin flips, slot machines, and Bingo and lottery ball selections are all

random events.

Let’s test this out with coin flips. Everyone flip a coin twice.

• How many people got the same result twice in a row, either two heads or two tails?

• How many people got the opposite of what they got on their first throw, either head/tail or tail/head?

• Usually there will be about an equal number of people in each group. This shows that what happened on the first throw has no influence on what happens on the second throw.

• How does a failure to understand the independence of random events apply to people who gamble?

• Most believe that their current losing streak predicts a winning streak around the corner (to balance things out) or . . .

• . . . they believe that they’re “on a roll” and need to keep playing while their luck holds out.

Question 7: What do you think?If you want to design a new game that will get people to spend as much money as possible at your casino, which of the following $1 games will encourage people to play the longest and spend the most money?

a) In this game, people almost always win $5 the first time they play, but they never win again.

b) In this game, people almost always win $5 every eight to ten times they play.

c) In this game, people almost always win $20 the first time they play, and after that they occasionally win $2.

Fallacy 7: Early wins and occasional rewards encourage false hope.

a) People who win $5 the first time they play will usually keep playing for a while. But most people will stop playing after losing for the next ten or twenty times straight.

b) People who win $5 about every eight to ten times might play longer than they would in the situation above, but they’ll eventually stop playing when they realize they’ll only lose money in the long run.

c) The best option is to let people win a lot of money ($20) the first time they play and then a small amount every so often, to keep their hopes up that they might win $20 again.

Fallacy 7: Early wins and occasional rewards encourage

false hope.

• Most commercial gambling enterprises understand this principle, so they offer infrequent large wins and frequent small wins.

• Most problem gamblers had the misfortune of a big win when they first started to gamble.

Think of the last test on which you did well: why did you do so well?

• Possible answers: studied hard, knew the material, and so on.

Think of the last test on which you did not do well: why didn’t you do better?

• Possible answers: test was too hard, test did not measure what I studied, teacher hadn’t explained the subject “clearly,” and so on.

NOTICE A PATTERN?

Question 8: What do you think?

Fallacy 8: Attributing success to skill

and failure to bad luck.• Most people take credit for success and blame failure

on things beyond their control.

• How does this apply to people who gamble?

Most believe that their wins are due to their own skill at gambling, and their losses are just due to bad luck.

Question 9: What do you think?

Which best predicts happiness?

a) money

b) close friendships

c) power

d) fame

• On average, rich people are not happier than middle-class people.

• People who win the lottery tend to be very happy for the first year, and then return to their previous level of happiness.

• Many gamblers mistakenly believe that if they become rich, their problems will be solved and they will be happy.

Fallacy 9: Money does not solve all problems.

Fallacy 9: Money does not solve all problems.

Problem gamblers typically have many problems in their lives and see money as a way of solving these, but money can’t buy back the trust they have lost, and it can’t fill the emptiness they feel.

Think some more…Think some more…

• Brainstorm scenes in TV shows, music videos, movies, commercials, or other stories that promote gambling.

• Do these exploit gambling fallacies?

• If you were in government, what sorts of steps could you take to prevent problem gambling?

Take-home page

Summary• There are many gambling fallacies (incorrect ideas) that cause people

to gamble too much. Gamblers tend to . . .• overestimate how many other people gamble as much as they do.

• remember their wins better than their losses.

• develop a lot of superstitious behavior they associate with winning (but that doesn’t actually change the odds or help them win).

• ignore the true odds of winning.

• forget about the law of averages: short winning streaks are common, but long winning streaks are impossible.

• Problem gamblers also tend to have muddled thinking due to . . .• having experienced an early big win.

• incorrectly believing their wins are due to their skill at gambling and their losses are due to bad luck.

• incorrectly believing that money will solve their problems or make them happy.

• incorrectly believing that their history of past outcomes will have an impact on their next outcome in a game of chance—even though most gambling involves completely random events with results that can never be predicted accurately.

End of lesson 3