So I don’t gamble, and don’t ever indend to make it a habit.
But a friend told me to play roulette, and I would have a ~47% chance of doubling my money and , as long as I had enough money to keep doubling my stake, would have a ~95% break even if I kept going until I won and never played again.
So say I had $200k in the bank and always put my money on red
Spin 1 : $5K
Spin 2: $10K
Spin 3: $20K
Spin 4: $40k
Spin 5: $80K
Spin 6: $160k
In this scenario, I’d have a ~47% chance of winning $5k, and just a 2% chance of losing $160k?
EDIT: Although just working this out, I think I would probably put the 160k into a 4% savings account if I had it, or start off way smaller amounts e.g. $500 to reduce my chane of losing money significantly lol.
In: 8
You’re effectively “selling lottery tickets” here. You sell each ticket for 5k, and each has a 1/50 or so chance of winning 315k (they don’t give back your previous bets) – a jackpot you have to pay the casino when they win.
So yeah, this works fine until it catastrophically doesn’t. You haven’t fixed the overall negative odds of the game, you’ve just re-arranged the payouts – this strategy will lose over time, and in a spectacular way.
Edit: Maybe it’s simpler to imagine the overall plan as a single game. It costs $70 to play. 63/64 times, you win $71 (your $70 back, plus a dollar). 1/64 times, you lose it all. Do you want to play this game?
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