Probability in Casinos Final
Probability in Casinos Final
Casino
• Casino gambling is a hugely popular activity
• The backbone of casino game mathematics is probability
1. Roulette Wheel
• Roulette is a wheel with 37 (European version) or 38 (American version) fields
• A little ball is spun on the wheel until it lands on one of the 37 (European) or 38 (American) fields
• In the American version, the zero exists twice. 18 of these fields without the zero are red and 18 are black, the zero
(European version) or the zeros (American version) are usually green
• The fields all have an equal chance to be drawn, players can bet on any combination of numbers, red or black, even
or odd, high (numbers 19–36) or low (1–18)
• Winning and losing over a certain number of spins on the roulette
wheel is a perfect example of a binomial distribution - the probability
of winning is fixed, the spins are independent, and you have a fixed
number of trials
Roulette Table
• Place where numbers are mentioned
• We will take example of some events, i.e possible outcomes and the elements (numbers) in
that event e.g:
• X = “Red” = {1, 3, 5, 7, 9, 12, 14, 16, 18, 19, 21, 23, 25, 27, 30, 32, 34, 36}
P(X) = no. of elements in X/ S = 18/37
For understanding the probability of event R of getting an odd number which is red in colour:
Found out by the calculating the elements in this set i.e red and odd
By digram , it comes out to be
1, 3,5,7,9,19,21,23,27
P(R)= 9/37
We can use conditional probability to calculate any event that is dependent on other event
e.g P(X|Z ) = P(X∩Z)/P(Z)
= (9/37)/(18/37)
= 1/2
But what we actually do in placing a bet:
• We choose any one number
• If ball lands on that number, we win , else we loose
• So, the probability of getting that can be calculated by the formula
Probability of winning =
Ways to Win / (Ways to Win + Ways to Lose)
= 2.7 % (European)
In American Roulette
• Each factor remains the same except another chance of getting a 00 is
also taken into consideration
• i.e if the earlier sample space was of 37 elements, it would be off 38
elements now due to one extra number
• 00 can also be used in placing bets
• All other general rules remain nearly same
NOTE : ODDS
• The rules that apply at casino tables are designed in
such a way so as to tilt the advantage in favour of the
house.
• Because of this, it is of extreme importance for
roulette players to learn how to calculate the odds of
winning with each type of bet.
• For every game the casino offers, the payout odds on bets are established in
such a way so that the casino can generate profits on each wager you make.
• This house advantage is expressed in percentages which reflect the overall
return the casino can expect over time, or in other words, the average
percentage players will inevitably lose in the long term.
• To calculate the house edge in roulette, we multiply the difference between the
true odds against winning and the casino odds by the probability of winning.
• On a double-zero wheel, the odds against winning with a Straight Up bet are 37
to 1 but the house pays only 35 to 1 which results in a house edge of 5.26%.
• Difference between the odds against winning and the payout in American roulette
is equal to two units. Using the formula from above, we can calculate the house
edge like so:
(37/1 – 35/1) x 1/38 = 2/1 x 1/38 = 0.0526 x 100 = 5.26%
• The house edge in European roulette is significantly smaller because there is only
one zero pocket on the wheel so the calculation will run as follows:
(36/1 – 35/1) x 1/37 = 1/1 x 1/37 = 0.0270 x 100 = 2.70%
LOSSES OF PLAYER DUE TO HOUSE EDGE IS SIGNIFICANT ONLY IN LARGER BETS e.g
you loose 526 dollars on playing with 1000 dollars due to house edge.
European EU Roulette American Roulette American Roulette
Bet Payout
Roulette Odds House Edge Odds House Edge
P(Red) x (Value of X for Red) + P(Not Red) x (Value of X for Not Red) = 18/38 x 1 + 20/38 x (-1) = -0.053.
• Interpretation
The expected value is very much a measurement of the center or average. It indicates what will happen in the long run every time that we
bet $1 on red.
While we might win several times in a row in the short term, in the long run we will lose over 5 cents on average each time that we play.
The presence of the 0 and 00 spaces are just enough to give the house a slight advantage. This advantage is so small that it can be difficult
• E.g expected value of the "Black" bet which pays even money
x P(x) xP(x)
18 Numbers
"Red/Black,"
Even Money -5.26
"High/Low" or
"Odd/Even"
• Getting the same number in a row
1 1.06 to 1 48.6%
2 3.23 to 1 23.7%
3 7.69 to 1 11.5%
4 16.9 to 1 5.60%
5 35.7 to 1 2.73%
6 74.4 to 1 1.33%
7 154 to 1 0.65%
8 318 to 1 0.31%
9 654 to 1 0.15%
10 1,346 to 1 0.074%
15 49,423 to 1 0.0020%
20 1,813,778 to 1 0.000055%
STANDARD DEVIATION
• For the same bet in previous slide, using the standard deviation formula,
-5.26 - 2 = -7.26
-5.26 + 2 = -3.26
The result is that if the game is played 2500 times then there is a 68% chance that
the player will lose an average of between $3.26 and $7.26.
It may seem like playing 2500 times will never happen; however, if you were to own
a casino, then 2500 bets is not so many. This is why the casino does not need to rely
on luck. Given enough wagers, the casino is practically guaranteed to win. The more
you play, the greater the chance you will end up behind.
Famous Roulette Stratergies
• With the Martingale Strategy, you double your stake, if you have lost the previous game. You continue to
double each time until you win. Once you win, you start the sequence again. The idea is that, if you double
every time, after a loss, you end up with a profit.
• Unfortunately, once you lose 8 (or more) consecutive times, you could end up in an awkward situation that
your bankroll has dried up. Besides, you could face limits imposed by casinos.
• The Reverse Martingale Strategy works in the exact opposite way. You double your stake if you have won the
previous game. If you have a winning streak, this strategy is very appealing.
• The Fibonacci Strategy is comparable to the Martingale Strategy, but the increments of increasing the next
stake (after a loss) are not as steep as the Martingale Strategy. It follows the series 1-2-3-5-8-13-21 etc. It is
less progressive and less risky than the Martingale Strategy.
• In the D’Alembert strategy, you increase your stake with 1 unit (say 1$) after a loss. After a win, the increment
decreases with 1 unit. The stakes become much higher in the case you have lost more times than you have
LOTTERY PROBABILITY
• 6/49 LOTTO
1. Numbers from 1-49 are there
2. Player chooses a combination of 6 distinct numbers
3. If numbers in lottery= numbers in ticket – JACKPOT IS HIT (numbers need not
be in same specific order)
the probability of winning the lottery = the number of winning lottery
numbers/the total number of possible lottery numbers
• An alternative method of calculating the odds is to note that the probability of
the first ball corresponding to one of the six chosen is 6/49; the probability of
the second ball corresponding to one of the remaining five chosen is 5/48; and
so on. This yields a final formula of
• The range of possible combinations for a given lottery can be referred to as the
"number space".
• "Coverage" is the percentage of a lottery's number space that is in play for a
given drawing.
When not all 6 numbers match
• For a score of n, describes the odds of selecting n winning numbers from the 6 winning
numbers. This means that there are 6 - n losing numbers, which are chosen from the 43
losing numbers in
• The total number of combinations giving that result is, as stated above, the first number
multiplied by the second. The expression is therefore
• GENERAL FORMULA -
Craps may look like a game where people are simply throwing a
pair of dice across the table. However, there are odds,
probabilities and house edges involved that dictate the chances
of winning any given bet
the most likely dice roll is a seven, which will occur on six
of the 36 possible combinations from the two dice. The
next two most likely are six and eight followed by five and
nine and so on, reducing in probability as you move further
away from seven lower and higher respectively.
• Natural: Rolling a total of 7 or 11 — automatically wins.
• Craps: Rolling a total of 2, 3, or 12 — automatically loses.
• Point: Rolling a 4, 5, 6, 8, 9, or 10 — establishes the point for
the next round of rolling.