After narrowly avoiding relegation to a lower league last year, UK football team Leicester City won the English Premier League in 2016 having begun the season with 5,000 to 1 odds. To put this in perspective, bookmakers gave Elvis Presley about the same chance of being found alive. Some punters backed Leicester City early in the season in jest – and have now received large pay-outs.
Many were delighted at the bookmaker’s losses but what happened is rare. Yet these are the stories that keep people coming back to lose more money.
Where's the evidence?
Statistician Nate Silver, in his bestselling book The Signal and The Noise, writes about Bob Voulgaris, a professional gambler. Voulgaris is considered one of the best in the world but even he only gets about 57% of his bets right – and a small piece of information that lifts his guesses from 53% to 56% can make all the difference.
Gamblers must make their living on narrow margins. In general, you will lose money and the bookmakers will win.
Mathematician Adam Kucharski explores similar ideas in his book The Perfect Bet: How Science and Math are Taking the Luck out of Gambling. One thing we know for sure, he writes, is that the house always wins.
Mathematician Adam Kucharski in his book, The Perfect Bet: How Science and Math are Taking the Luck out of Gambling, says that one thing we all know for sure is that the house always wins.
Some writers suggest that bookmaker profits are hardly dented by big pay-outs to a lucky few. Because even the favourites may not perform well, bookmakers may make profits on bets they did not expect.
But bookmakers also “play” their favourites. A focus on the lucky winners helps reinforce the idea that you can gamble to win. This encourages bettors to fall into the trap of confirmation bias – a tendency to look for data that confirm one's preconceptions and dismiss information that does not fit in. That’s probably why you hear about your friends’ winning bets – and not the ones they lost.
A lucky stroke
Gambling appeals to many people as a chance to “get rich quick” and fix financial problems. This can happen but the probability is very low – you have to be very lucky indeed. Kuchaski notes that even truly random sequences will appear to contain patterns, a fact which should help us realise there is no perfect bet.