In gambling, one of the most important skills is knowing which possible outcome to bet on and when to bet big and when not to. This is where all facets of the decision come together.
Trying to predict what will happen – How likely is it that you will win? What are the chances that someone else will win? Card games, backgammon, and sports betting all have a lot to think about. The most important ones are:
- How good is your current position?
- How many ways are there to win (and to lose)?
- How lucky would you have to be when you roll the dice or draw the cards for you to win?
- How likely is it that your opponent will get lucky enough to win the game instead of you?
The job here is to to assess the relative winning chances of (contestants) or the likely winner of (a contest). Who has the best hand right now? Who has the better position on the backgammon board? Or, for the gambler, which horse or team is most likely to win the race or game? in other words ho is the favorite?
Many people think that all you have to do to bet on card games, backgammon, or sports is figure out who is most likely to win. However, they are leaving out a big part of the matter, and perhaps the most important part.
Assessing the proposition: It's usually not too hard to figure out who the favorite is. In backgammon, it's pretty clear who's ahead. In card games, where players hold cards that other players don't know about, it's harder, but you can still get a general idea of how good your hand is. Most of the time, everyone agrees on which horse or team is the most likely to win.
But one of the most important things to know about gambling is that you're not likely to win with information that everyone has access to. Most people know who is likely to win a hand of cards, a game of backgammon, or a sports bet, so that information isn't very useful.
Everyone might want to bet on a favorite, but if everyone wants to bet on the favorite, it will be hard to find someone to bet against the favorite without an incentive.
For example, Team A is expected to win twice as often as Team B. If everyone thinks Team A is better, no one will bet on Team B unless Team A's fan gives Team B's fan an "incentive". For example, Joe might tell Ed, "I'll bet $10 against your $5 that Team A will beat Team B." Joe wins $5 twice and loses $10 once if everything goes as planned. After three games, the bets are even. In this situation, 2-to-1 odds are "fair."
So here's the bottom line: the goal isn't to figure out who the favorite is and bet on it. Rather, the goal is to figure out who the favorite is and whether the odds are fair or not.
- If the odds are fair, as illustrated above, there's no need to wager bet on one team over the other other than personal preference.
- If the odds don't punish the favorite enough—say, 6-to-5—bet on them. Team A usually wins. Even if they lose one in three times, the $6 you spend won't cover the $10 you earn.
- If odds are "too long," like 4-to-1, bet on the underdog. The $4 reward on the one game you win will more than make up for the $2 you lose two out of three times.
It's sometimes a good idea to bet on a weaker position, even though it's likely to end in a loss most of the time. Everything is dependent on the odds. People who are good at gambling are not those who can predict winners, but those who can identify the best propositions. The idea is to identify situations where the odds favor either the favorite or the underdog.
The best place to look for secrets is where no one else is looking. Most people think only in terms of what they’ve been taught; schooling itself aims to impart conventional wisdom. So you might ask: are there any fields that matter but haven’t been standardized and institutionalized? Physics, for example, is a real major at all major universities, and it’s set in its ways. The opposite of physics might be astrology, but astrology doesn’t matter. What about something like nutrition? Nutrition matters for everybody, but you can’t major in it at Harvard. Most top scientists go into other fields. Most of the big studies were done 30 or 40 years ago, and most are seriously flawed. The food pyramid that told us to eat low fat and enormous amounts of grains was probably more a product of lobbying by Big Food than real science; its chief impact has been to aggravate our obesity epidemic. There’s plenty more to learn: we know more about the physics of faraway stars than we know about human nutrition. It won’t be easy, but it’s not obviously impossible: exactly the kind of field that could yield secrets.