Things that Yoram knows: why do we love the lottery and is it possible to beat the roulette?

Siegel asks "where is there more chance in the stock market or the lottery. And if there is more chance in the stock market: why play the lottery?" The answer is unequivocal - in the stock market. And why only owners like Sheldon Adelson can make money in the casino

Continued For a column that dealt with "hot numbers" In the lottery draws, 2 more Piss questions were drawn for this week's column.

Let's start with Sigal asking "where is there more chance in the stock market or the lottery." And if there is more chance in the stock market: why play the lottery?"

 The stock market is better. It is quite rare for a security to completely lose all of its value but this is precisely the fate of the vast majority of lottery tickets. The lottery factory returns about 60% of its income as prizes and this means a loss of about 40% to the investing public. The profit expectancy in the lottery industry is much lower than in games of chance such as roulette or blackjack, so how is it that the lottery (along with the other lotteries) is so popular?

First answer: The public is stupid and therefore the public pays.

we are stupid We are especially stupid when it comes to evaluating probabilities and this stupidity is what allows the lottery factory to promote education, health and sports.

Studies show that we are more prone to gambling the more ignorant we are of statistics. In an instructive study, researcher Martin Voracek from the University of Vienna tested the probabilistic intuition of a group of psychology students, and groups of gamblers and casino workers. The researched were asked to estimate how many people a random group should include so that the probability that two people in it have the same birthday and how many people such a group should include so that at least two people in it will celebrate their birthday today (write down an estimate without calculation for these two questions). Although the casino people are exposed to situations where it is important to understand the chances of random events, the results showed that the gamblers are more wrong in their estimates than the students, and ironically, they are more confident in their miscalculations compared to the students who were much more hesitant. The answer to the two questions by the way is 23 and 253 respectively: the farther the answers you wrote down are from the truth, the more likely you are to participate in the next lottery. Among lottery gamblers in Great Britain, for example, only a third of the gamblers knew about the chances of winning the big prize and it was found that providing gamblers with information about the odds reduced their investment in the game.

A special type of stupidity is short-sightedness, the gambler weighs the reward against the small investment in purchasing the ticket and not against the total expenditure in many tickets over time. In a study in which respondents were offered 5 dollars in exchange for filling out a questionnaire, the vast majority of respondents preferred to receive cash instead of 5 scratch cards. When the respondents were given the option to determine what part of their salary would be converted into lottery tickets, they chose on average to receive one ticket and 4 dollars, but when the tickets were issued to them one by one (would you like a lottery ticket instead of the first, second dollar, etc.) the researchers were able to "sell" double the amount of lottery tickets and the amount increased even more More so when the subjects were allowed to scratch the card and prove (in the vast majority of cases) a loss before being presented with the next choice between cash and lottery. Those investigated in the experiment were bus passengers in the USA and most of them are poor and poorly educated. Based on the results, the researchers suggested that scratch cards (the most popular type of lottery among the poor) be sold in packs of 5 tickets together so that the true price of the bet would be clearer. It goes without saying that such offers do not receive much interest from the organizers of the lotteries.

And yet even smart people sin by participating in lotteries, apart from stupidity there is something else that pushes us to the orange booths at the corners of the street.

Second answer: we dream

A lottery ticket is a magical accessory: a piece of paper that allows you to fantasize about a life-changing win. This entrance ticket to the kingdom of dreams costs only 6 shekels.

There is almost no bettor who invests the entire annual "lotto budget" in one lottery even though apparently it is possible to save time this way and get the same chances of winning. Moreover, it turns out that a significant portion of people who are given a choice prefer to purchase tickets for a later lottery. Lottery bettors who were asked to report their mood on the day of the lottery report a good mood, excitement and hope in the two hours before the results are announced. Even if we ignore the negligible chance of a real prize, investing a few shekels in exchange for a good mood for two hours seems no less successful than buying a movie ticket (more than 30 shekels for the same time of fantasies). A study that examined whether it is worthwhile to bet on the lottery came up with a paradoxical conclusion: eLotto improved the sense of happiness of those who gambled for pleasure or as a social activity (when filling out the form and checking the results are activities of a group of friends or family members) but not the one who reported that he is betting to win. That is, buying a lottery ticket is worthwhile especially for those who know statistics and are aware of the zero chance.  

 Those who recognize that the lottery is nothing more than buying a fantasy will invest only the minimum necessary. A gambler who invests 147 shekels in the "Strong Systematic 7" form instead of the 2-tenner form for 6 shekels is equivalent to a person who buys himself 24 movie tickets in the hope of enjoying the movie 24 times.

Third answer: We are cowards

The worst mistake a bettor can make is choosing fixed numbers. Lottery organizers love the owners of fixed numbers because they are the most loyal and profitable customers.

Since we have chosen fixed "lucky numbers" the lottery no longer needs to rely on our lack of understanding of statistics nor on the pleasure of daydreaming in order to generate profits from us. What will make us run to the stand is fear: the fear of the possibility that "our" number will actually win the lottery that we will miss. Fear is a stronger emotion than hope or pleasure and lottery advertisers are well aware of this: a genius and nasty slogan of the American Lottery stated "Don't let your numbers win without you".

This is the place to answer Adi's question: "Is it worth being a Piss member?"

The answer is unequivocal: no.

As mentioned, the lottery ticket is a cheap source of excitement and fantasy, therefore there is no obstacle for a rational person to participate in the lottery, yet invest your fantasy budget in the ticket every week and do not subscribe. The lottery subscription has a fixed number and when it comes time to renew the subscription, not the pleasure of the game and the fantasy of winning will determine the decision, but fear: not an emotion worth paying for. In 1997, the British Lottery added another weekly draw to the traditional one. A group of MPs objected to this on the grounds that this would put the holders of fixed numbers under unfair psychological pressure to double their participation in the lottery. The reaction of the lottery organizers was, as expected, that the players are "responsible people who decide for themselves". A response is required, monopolies are always fighting for our right to decide for ourselves to pour more money into them. A comparative study revealed that the owners of the fixed lucky numbers indeed "decided for themselves" to double their investment in the lottery following the addition of the lottery.

The Dutch lottery has gone as far and is basing a lottery on the postal code. The postal code in the Netherlands (4 digits and two letters) is shared by 25 addresses and the prize is divided among all ticket buyers whose address belongs to the same zip code. This is how the organizer succeeds in making every person a "fixed number": every Dutchman knows that not participating in the lottery puts him at risk that his neighbors will become millionaires while he looks on with envy. Similarly, the Christmas lottery in Spain (Loter´ıa de Navidad) sweeps 75% of the population and buying the lottery ticket has become part of the family holiday tradition. The success is attributed in no small part to the nature of the distribution of the tickets in series and the method of distributing the winnings, so even those whose ticket number is close to the winning number receive a handsome prize. If the neighbor won, this means that if you had bought a ticket a little before or after him, you would have received several thousand euros. This nature of the distribution of the winnings means that many of the winners live next door to each other and the level of regret felt by those who did not buy a ticket is high.  

People who hold a lottery ticket will mostly refuse to exchange it for another ticket with the same winning chances even if they are offered a bonus for the exchange. When their card is replaced, people attribute higher chances of winning to the card they lost than to the replacement card they were given. An event that we have drawn in our imagination over and over again: "our" numbers coming up in the lottery, will seem more likely to us than the winning of meaningless numbers.  

Fourth answer: For the glory of the State of Israel

Maybe the question "Why do we like the lottery?" Considered to the question "Why do we love the Electric Company?" or "Why do we like Ayalon routes?" – that's what there is. The state wants us to gamble and we gamble just as we pay taxes and enlist in the army. The origin of countries' fondness for gambling establishments will be the subject of its own column.

Can gambling losses be recovered?

Israel Shapira offers in response to the column "Hot numbers" a sure method for success in gambling: choose a color, red or black in roulette, and put a dollar on it. If we won, we will take the dollar and put another. We lost, women 2 dollars, 4, 8, 16.. At some point it has to come out red, right? So when it comes out we earn a dollar and we can start the process over, thus accumulating a small treasure for us after a long period of time.

Question: Will the method work? And if not why?

First of all, Israel, there is no statistical difference between the sequence red-red-red-red and red-black-black-red or any other color sequence. You can equally apply the doubling method to any order of bets. Our intuition pushes us to believe that a streak of reds or blacks is "too long" and should be stopped, but the roulette wheel or the deck of cards do not know what happened in the previous round. In the semi-autobiographical novel "The Gambler" Fyodor Dostoyevsky describes the trajectory of a young man's gambling addiction. In one of the climaxes of the story, the hero plays at a table where a sequence of red results is obtained "After ten times, almost no one dares to bet on him. But then no one will bet on the black in front of him either... after sixteen consecutive times that red comes out, for example, black must come out in the next round. The novices then attack the black en masse, doubling and tripling the bet amounts and incurring a terrible loss." The probability of sixteen consecutive reds is about 1 in 102,000 (on a European roulette wheel in which there are 18 red numbers, 18 black numbers and 0 that is not red or black) so that in the casino Where several roulette wheels are installed working continuously (several hundred spins per day) such a sequence will not be particularly rare. And the main thing: even after 16 consecutive cycles like this, the chance of red or black in the 17th round remains a little less than 50% for each. The method you describe is called a martingale (martingale) and those who use it are highly likely to win a small profit in a small number of game cycles. But since the money available to us (or the bet ceiling allowed by the casino) is always limited, when a series of losses is long enough we will reach bankruptcy. How long is this series? Depends on the amount of the bet and the amount available to you. The maximum bet limit in roulette in most Las Vegas casinos does not exceed $10,000. If you start the bet with 10 dollars then a streak of 9 losses will leave you with a loss of 5110 dollars and 4890 dollars whose multiplication will not cover the loss. Until this sequence you will earn a little but probably less than the minimum wage for an hour of work. What to do: If there was a way to make money in the casino, Sheldon Adelson and his friends wouldn't be so rich.

Did an interesting, intriguing, strange, delusional or funny question occur to you? sent to ysorek@gmail.com

More of the topic in Hayadan:

• To win the lottery, without partners - on cognitive biases and brain bugs
• So what are the real odds of winning?
• Things Yoram knows: hot numbers