A Betting System That Works!

By Neil Faulkner (TMFVertigo)
May 18, 2006

I once worked with a man who admitted he had built up £26,000 of gambling debts in just two years. I asked him bluntly if he thought that, perhaps, two years was enough of a trial period to see if he was any good at gambling. He replied: "I reckon, over all, I'm up."

At first it's amusing but, when you think about it, it quickly becomes disturbing that he could somehow reconcile the two thoughts: "I'm a good gambler" with: "I have huge gambling debts." He is a prime example of someone with a serious gambling problem.

Only a relatively small number of people are like this. Even so, it astounds me how many less compulsive individuals don't follow the illogic of gambling to its inevitable conclusion. The idea that they "just might win" overrules their otherwise good sense. Here I'm going to spell out just some of the reasons why it doesn't pay to gamble.

There are no poor bookies

A nice, simple, but dire warning that should put off all gamblers comes right from the annual reports of the gaming companies themselves. GamCare, a charity for gambling addicts, says that the gaming industry's turnover is a massive £42 billion per year. You can't earn £115 million per day by luck! Bookies (and casinos etc) make money by ensuring that betting losses are higher than winnings. The companies that don't do that don't last very long.

A 'good bet' becomes a certain loss over time

'Experts' say a 3% margin in favour of the house is a 'good bet'. This means if you have a slightly greater chance of losing than of winning it's supposed to be a good thing! With a margin of just 3% a bet could go either way; there's not much in it. However, what's powerful about probability is that, in the long-term, it becomes a certainty.

Let's take a simple game as an example. Get yourself a die ('die' is the singular of 'dice'). If you roll a 5 or a 6, you win, so you've got a one in three chance of winning. Roll the die. Did you win? You might have done, which means you have a 100% record. Make a note of the number you rolled.

Now roll it ten times, keeping a count of the number of times you rolled each number. Then roll it sixty times, adding to your tally as you do so. At first you might see that some numbers come up more often than others, but soon you'll see a pattern. By the time you've rolled, say, 240 times, you'll have rolled winning numbers 80 times, give or take only four or five rolls. If you keep going, you'll find the margin of error continues to shrink amazingly. It goes from a 1/3 chance to a 1/3 (almost) certainty.

Industry-specific tricks

Some parts of the industry don't just rely on probability. Take sports betting, for instance. Bookies start with the expert knowledge of the 'decision makers' (or 'odds setters'). These people really know what they're talking about. By themselves, they won't set bookmakers apart from intelligent sports fans. That's why bookies also spend a fortune compiling and analysing statistics to hone their predictions.

Then they do a very clever bit of maths called the 'over-round' to make it all work. What they do is they calculate the true odds as best as they can, then offer you worse odds. Take for example a two-way bet. Let's say they think the true odds are 6/1 for the dark horse. This means they think the odds are 1/6 on the favourite. If you place a bet of £14.29 on 6/1 and £85.71 on 1/6, you've staked £100. You also win £100 regardless of the outcome.

However, they only offer you 5/1 and 1/32 respectively. At 5/1 and 1/32, to guarantee a win of £100, you have to bet a total of £113.64.

Now, with a little guidance on which way the punters bet, the bookmaker will make a gross profit of 12%, regardless of who wins. Sometimes punters see bargains and place bets too heavily on one side (i.e. more on the dark horse than the favourite). In this instance, bookmakers simply shorten the odds on one side and lengthen them on the other to encourage more betting the other way. Their profits are guaranteed. Applying the theory of probability, you can be confident that you'll lose 12% of what you bet in the long run.

12% is a huge margin, but it's probably on the low side for British bookmakers. Not only does this give them incredible profits, but it provides a decent buffer should decision makers get their odds a bit wrong now and then.

Gambling systems

A friend of mine thinks that gin rummy is as much about psychology as it is about maths and strategy. Crazy! The good news is he's finally catching on after losing to me for the 33rd time out of 34. An early win got him excited, which is one of the ways people get hooked on gambling -- and get broke. Thankfully for him, rummy isn't a betting game, but it provides an insight into the minds of problem gamblers.

The "It could be you" philosophy leads people to blind acceptance of so-called 'gambling systems'. These are touted by conmen calling themselves experts. Although working systems appear occasionally (the last one was a renowned black jack one, from back in the 60's I believe) they are rapidly quashed by the gaming industry. These companies aren't stupid!

A system that works

My old science teacher once used quantum mechanics to explain probability, the core maths of gambling. Needless to say it wasn't the best (or simplest!) example. However it should serve as a warning. The gaming companies have the highly paid mathematicians. Unless you, or your mate down the pub with the system, understand quantum theory, you shouldn't gamble. If you do understand quantum theory, you won't gamble anyway.

There's only one system that will always beat the gaming industry. Don't give them your money! You have better things to do with it. You won't make gains of £80,000 per minute like casinos, but you'll get a better return than a hardened gambler.

Stop gambling and get out of debt.