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Casinio Game Information |
Risk of Ruin  In my favorite little book on probability theory author Warren Weaver states, "Although gamblers have undoubtedly learned a great deal from probability theory, they clearly never learn- or in any event never accept- the main lesson probability theory can teach about gambling. For the lesson is, in brief, 'If you keep on gambling, you will lose.' " (i) Two factors combine to make a casino invincible: house edge and risk of ruin. House edge is simply the built in mathematical advantage a casino has on each and every game, and is discussed here. Risk of ruin, also known as gambler's ruin, is the likelihood that a player will lose his or her entire bankroll in an attempt to win the bankroll of another player or the casino. With this definition, risk of ruin is always 0% for the casino. You might point out that no one really attempts to "win" the entire bankroll of a casino when gambling. This is true. That is why when considering risk of ruin against a casino, it might be more helpful to calculate what I call a short run risk of ruin by picking a goal amount you would like to win and stop betting at that point.(Of course, most people find it difficult to draw a hard line and simply walk away when winning.) Reference |
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