How Gambling Works

How Casino Games Work

• Randomness
• House Advantage

Player Cost Per Hour Chart

• Cost per Hour

Myths and Mistaken Beliefs

• Selective Attention or Selective Recall
• Magical Thinking
• Ability to Influence Outcome
• Superstitions and/or Rituals
• Systems
• Hot or Cold Machines, Numbers, Lottery Outlets, VLT Sites
• "Near Misses"
• Personification of the Gambling Device
• Chasing Beliefs

The Psychology of Gambling

• Variable Ratio Reinforcement
• Emotional Payoffs
• Entrapment

There are two features in all gambling games (VLTs, lottery products, slots and table games) that ensure that all outcomes are unpredictable and that the operator makes a profit. The first is randomness and the second is house advantage.

Randomness
Randomness in gambling means that there is no way to predict the outcome of an event or play. For example, if you flip a coin, the odds of getting a head or a tail are always 50/50. Even if you have flipped the coin five times and it has landed on tails all five times, on the next flip there is still an equal chance that it will be a head or a tail. The outcomes of past coin flips provide no useful information and will not help to predict what will happen in a future coin flip.

Randomness ensures two things: that gambling games operate honestly and that players and operators have no idea what number or event will occur next.

VLTs and casino slots use a random number generator to ensure randomness. It runs continuously for 24 hours a day, seven days a week, even when no one is playing.

The random number generator in the video poker game is the same as a continually shuffling deck of cards. There are, for example, 2,598,960 different five-card poker hands that can be dealt from a 52-card deck. You might think of the random number generator as all possible hands continually running by. When you press the deal button, you simply get the hand that was passing at that split second. If you had pressed the button one thousandth of a second sooner or later, you would have received a totally different result.

It doesn't matter how long you play, how many credits you wager or whether the VLT or slot has been played before you started play. The random number generator ensures that each result is completely random and unpredictable. Your chances of winning are always the same.

House Advantage
House advantage is built into all commercial gambling games so that the operator makes a profit. House advantage works in various ways within each game, but over time it always results in the house taking in more money than it pays out in wins.

Here is a simple example of house advantage using a coin flip. There is a fifty-fifty chance of the coin landing on heads or tails. This fact never changes, even if heads has appeared six or seven times in a row.

A casino or other gaming operator might charge you $1.00 to place a bet on the coin flip. If you win, the gaming operator will pay you the original $1.00, plus 80¢, for a total of $1.80. This gives the operator a 10% profit.

If you played 10 times you would bet $10 in total. But remember: you have a 50% chance of winning and a 50% chance of losing on every flip. So, on average, you would win five times, or a total of 5 x $1.80 = $9.00.

Even though you won as often as the casino, you would still have spent $1.00 more than you won. This is the casino's profit.

In an even money bet you would pay $1.00 for the bet. If you won, the operator would pay you the original $1.00 plus $1.00 for a total of $2.00 Half the time you would win the coin flip and half the time you would lose. Over 10 flips you would wager a total of $10 and win on average five times. You would be paid 5 x $2.00 or $10.00, the same amount you wagered. Of course, if this were the case, in the long run no one would make any money.

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Cost Per Hour
Look at the Player Cost Per Hour Chart below and you can compare your gambling options and place a realistic “cost” on the games that casinos offer. You could consider the cost per hour the price for the entertainment the casino games offer players. Cost per hour is calculated as follows:

Click here to view the Cost of Play Calculator

Keep in mind that the cost per hour of play you will see is a theoretical value; it is the average amount you will lose (spend) over time on a particular game. Your actual results in the short term could fluctuate wildly up or down, but over time the longer any particular game is played, the more the results will conform to the expected cost per hour. Keep in mind that if you are playing faster or are betting higher amounts than are listed your cost per hour will go up accordingly. The “cost per hour” accounts for all your wins and losses in a typical gambling session. It is the estimated out of pocket expense for the player over time per hour.

Remember that knowing the cost per hour of play is only one factor in safe gambling; many other factors enter in to the safe gambling equation including :

• motivation for playing,
• knowledge of how gambling works
• other personal risk factors

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Sources:
. American Mensa Guide to Casino Gambling, (1999, Andrew Brisman, Sterling Press)
. The Unofficial Guide to Casino Gambling, (1999, Basil Nestor, MacMilllan Publishing)
. The New Gamblers Bible, (1996, Arthur Reber, Crown Publishing)

For more information, contact the Responsible Gaming Information Centre at:

• Club Regent Casino (985-0419)
• McPhillips Street Station Casino (985-1240)
  

Or you can visit the Manitoba Gaming Control Commission myth busting website at www.mgcc.mb.ca click on public education campaign.

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Selective Attention or Selective Recall
In most areas of life, selective attention helps us to filter out information that doesn't interest us or is not important to the topic at hand.

In gambling, many people pay close attention to their wins, but give little thought to how much they spend. This results in a distorted view about the amount of their wins compared to the cost of playing. Many people will report being ahead in their wins, or at worst they'll claim that they broke even. If this were true, it would be difficult to explain the large profits made by casinos and VLT lounges. Many people are very surprised when they find out how much they have really spent on gambling activities.

Examples of selective attention or selective recall are when people say:
I "always" win when I double up.
I "never" win when I double up.
My friend "always" wins.
These machines "never" pay on Tuesdays.
These machines "always" pay on Tuesdays.

Magical Thinking
Magical thinking is when a gambler comes to believe that wins are produced by thinking a certain way or even hoping or wishing for a win. Using selective recall, the gambler can remember times when wins have occurred after wishing for them to happen, while forgetting the occasions when this strategy did not work.

Ability to Influence Outcome
Gamblers begin to believe that wins are produced by their own efforts rather than by the random operation of a gambling device or cards. Almost all gambling games are completely random, and no amount of skill or effort on the part of the gambler will change this. In some card games, such as blackjack and poker, some skill or knowledge of the game is required to play well, but the randomness of the way the cards are dealt, coupled with the house advantage, ensure that over time players will spend more money than they win.

Superstitions and/or Rituals
Some gamblers are superstitious, meaning that they connect events that are not related, believing that the events will somehow affect their wins. For example, if you win a large prize on a Tuesday, you may start to believe that Tuesdays are better than Thursdays for gambling. In doing so, you are connecting events that are unrelated.

Other gamblers may begin to believe that certain objects, ways of sitting or even articles of clothing may be helping or hindering their gambling wins. For example, if you win a prize while wearing your red shirt, you may think that wearing it again will help you to win. Or, if you cross your fingers and it works once, you may believe that this ritual will affect your chances of winning.

Again, the reality is that all events in gambling games are random - there is no connection between superstitions and/or rituals and the results of any given gambling event. Your chances of winning are always the same, no matter what day it is, what you wear, what machine you pick, what fingers you cross or what "lucky" charm you bring.

The belief in superstitions or rituals may be held most strongly by people who have at one time played sports or other games of skill. In these events, a positive expectation based on the use of a certain baseball cap or routine can lead to increased confidence, which in turn may lead to a more favourable result. However, in games of chance, such as slots, VLTs, lotteries and table games in a casino, increased confidence will not help. The results are completely random and unaffected by your beliefs.

Systems
Many people who gamble believe that, by observing a number of results, they will be able to see a pattern and make a system to help them "beat" the game. Again, it must be stated that results are completely random and no system can help you to do better. Some systems, such as doubling up, can actually cause you to spend your money even faster, leading to greater problems with gambling.

Hot or Cold Machines, Numbers, Lottery Outlets, VLT Sites
Some people believe that, because a certain machine, a set of numbers or a location has not paid out a big prize for a while, it has a better chance of winning than others. Other people believe that such machines or numbers are even less likely to pay. Neither of these assumptions is correct. Remember, all results are random and independent, and any given set of numbers or machine or location has exactly the same chance of winning or losing on the next play as it always had. Whether it has paid out recently or not has no affect on the outcome.

"Near Misses"
When the slot machine’s screen shows a play where the symbols almost line up, many players see this as a “near miss”. They may believe that they are closer to winning or that their chances are improving. Neither belief is correct. While “near misses” are exciting, they are not an indicator that players are any closer to winning. If players are not informed they may interpret these “near misses” incorrectly and spend more money than they had initially planned because they are under the illusion that the “near misses” were leading to a big win.

Personification of the Gambling Device
This is the belief that a slot machine or VLT is deliberately punishing, rewarding, taunting or trying to make a player angry.

Chasing Beliefs
This is the attitude that money lost by gambling hasn't really been lost but can be recovered through further gambling. Gamblers "chase their loses," thinking that if they gamble more, they'll eventually win their money back. What really happens is that, with the house advantage in place, the gambler will continue to lose money over time.

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Variable Ratio Reinforcement
The outcomes in almost all gambling games, such as VLTs, lotteries, slots and most table games, are completely determined by chance. People who gamble will have occasional wins of varying sizes that are randomly distributed throughout a great number of losses. This is known as variable ratio reinforcement.

The fact that players cannot know when they will win or even how much they may win on certain games makes it difficult for them to stop playing.

Emotional Payoffs
Another key factor is the emotional payoffs of winning. We live in a highly competitive culture, where winning - whatever the game may be - is seen as highly desirable. When this is coupled with a prize of money, which itself is a highly valued item in today's world, the emotional reward becomes even more significant.

The emotional payoffs of gambling, coupled with the variable ratio reinforcement of the games themselves, make gambling a powerful attraction for some people - one that is not easily ignored.

Entrapment
Problem gambling also involves entrapment, which is becoming more and more determined to continue with an uncertain plan. Imagine waiting for a bus to go a short distance; if the bus doesn't come along after a short while, how long should you wait?

Two competing thoughts can develop. One is to leave the bus stop, accept the loss of time and energy, and walk to your destination. The other is to alter your thinking to include the following thoughts:

This entrapment at the bus stop has a direct parallel to gambling. Gamblers, in addition to spending time and energy at gambling, also spend money. The gambler begins to regard this expense not as the cost of entertainment, but as an "investment." The gambler, like the bus rider at the stop, may become increasingly reluctant to stop gambling to show that he is not a loser - that he can and will win. This results in more persistent gambling, mounting losses and an increasing urgency to gamble.

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