The Gambler's Fallacy

There are many terms you will here for the first time in the world of gambling, and one of the most poetic is “the gambler’s fallacy”.

A lovely phrase to say, sure, but what exactly is the gambler’s fallacy? And how can you avoid it?

As always, we are here with a guide to tell you everything you need to know about this common phenomenon.

What is The Gambler’s Fallacy?

Although used most often in gambling, the gambler’s fallacy is in fact something many of us experience in various situations on a near day to day basis.

In simple terms, the gambler’s fallacy is the belief that a completely random event can be somehow affected or altered by the equally random events that preceded it.

The most common example of the gambler’s fallacy is a coin toss, where heads has landed multiple times in a row, far more than is statistically likely, leading one to assume that the odds of tails landing the next time round are higher.

In terms of gambling, this means that if you have spun the reels a slot machine 20 times without win, for example, you would then assume your 21^st spin to be more likely to garner positive results for you.

First identified in writing by mathematician Amos Tversky and psychologist Daniel Kahneman after extensive research of the habits and cognitive reactions of gamblers, the gambler’s fallacy has been a mainstay of all forms of gambling for centuries.

The premise is logical enough, we look for a natural order in things, so when something that is supposedly random does not appear random, we start to find patterns in it, caused by the human brain’s natural response to find order in chaos.

Random Means Random

If you are aware of the gambler’s fallacy, and the fact that anyone is susceptible to its clutches, it becomes easier to avoid, as long as you remember one thing, random means random.

However many times you toss a coin, the chances of it landing heads up will always be 50% (assuming the toss is fair).

It is true that the odds of heads landing ten times in a row are unlikely, but any other combination is equally unlikely, because there is a 50% chance on every single toss.

The Monte Carlo Casino Incident

This may sound more like a Scorsese film title than a real life event, but it happened.

During a roulette game in the early 1900s, the ball stopped on black 26 consecutive times, causing numerous players to lose large amounts of money by betting on red, under the assumption that red was statistically more likely due to the imbalance of the average.

Of course, the streak did not end for 26 spins, and players lost big.

There has been no such extreme case reported since 1913, showing both the awareness growing of the gambler’s fallacy, and the statistical impossibility of 26 roulette spins landing on black, but the risk is always there.

Gambling on completely random games has no logic, and it is important to remember that, however involved you get.