Tuesday, 25 November 2008

Beating the system (1)

It is some years ago now that one of my best friends – a really bright university graduate in pure mathematics from Hyderabad, India - told me how a little known quirk in probability theory (the exponential paradox) could be used to make money. At first I thought there must be some catch. But there wasn’t. And like all brilliant ideas it was devastatingly simple. A guaranteed winner.

Here’s how it works:

You go to a casino and the roulette wheel. You can choose to place a bet on either red or black. Let’s say you place your first bet of US$1,000 on red and you’re lucky and it comes up red. You’ve won US$1,000. Get out the casino now.

But what if you’ve lost your first bet? Simple: just double your stake to US$2,000 and bet on either black or red the next time around. If you win this time, you will be up U$1,000 (after winning the second bet of US$2,000 but losing the first bet of US$1,000). Not bad. Now you have won, get the hell out of the casino as quickly as possible.

Okay. But what if you are unlucky and you lose both your first and second bets? Simple – just double the stake again to US$4,000. If you are lucky now, you will still be up US$1,000 (you will have lost your first two bets of US$1,000 and US$2,000 but won your third bet of U$4,000. Note also – very important this – that although you have placed three bets – and won only one of them – you are still up due to the fact that the magnitude of your bets is increasing on an exponential basis).

To lose three on the trot would be highly unlikely (only a 12.5% probability) – but still your winnings of US$8,000 on winning the fourth time would exceed the losses of your first three losing bets: US$1,000+US$2,000+US$4,000=US$7,000.

And mathematically, winning using this strategy is a certainty of course– if you keep betting on a fifty-fifty bet you will eventually win even if you are the unluckiest person alive (try flicking a coin ten times and never getting a head for example – virtually impossible).

So what are the pitfalls?

Well, first off, the casinos know about this ruse. If they catch you adopting the exponential bet placing strategy they will make sure that you will never be allowed into that casino again. They could also choose to cripple you. Physically. When I employed this gambling strategy in London I was absolutely ####ting myself. It was the first time in my life that I had actually sweated buckets through the palms of my hands. The croupier was an evil looking man and it is no secret why London casino owners keep pigs on their farms in Essex: three or four swine will devour an entire human body – bones et all – in less than two days. Not a trace left. Not even a human hair.

Second, it’s very difficult to think with your brain and not your heart in a casino. After winning on the roulette wheel at the third attempt, I felt an incredible rush of euphoria flowing through my veins like I was on #&*#$ or something. The desire to continue gambling was immense. But as soon as you break the rule of placing bets exponentially the game plan falls apart of course, and you end up losing everything.

So in these troubled times, with markets falling faster than whale crap sinks to the bottom of the Atlantic Ocean, you may like to try out this gaming strategy for yourself.

But just don’t blame me if you don’t make any money!


wankongyew said...

You didn't mention the biggest obstacle to systematically using this system in casinos: the limited "spread" between the minimum bet and the maximum bet on any roulette table.

Because each table has a fixed minimum and maximum allowable bet, you cannot go on exponentially increasing your bet each time you lose. Basically, you only have a limited number of tries. If you still don't win by then, then you lose everything.