Why is it a dumb idea for me to go to a casino and play roulette ONLY until I double my money or break even?

Question

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

Answer 1

> In this scenario, I’d have a ~47% chance of winning $5k, and just a 2% chance of losing $160k?

In other words, you’d have a negative expected value. Your 47% chance is +2.3k expected value, and your 2% chance is -3.2k expected value, because you lose so much more money than you’d win.