What Is The Gamblers Fallacy?
You may have also heard of the gambler’s fallacy by the name “the Monte Carlo fallacy” or “the fallacy of the maturity of chances”. Essentially this is the mistaken idea that, if something happens more frequently than normal during some period of time, it will happen less frequently in the future. For example, you might think that if you’ve lost a few times in a row playing pokies, it is more likely that your next game will be a win.
However, this is not the case. Many people are subject to this fallacy. However, it is good to be aware that it is false, as you can end up getting deeper and deeper into loss with the belief that your next win is just around the corner
Why Is It A Fallacy?
Okay, buckle your seatbelts, because we are entering the realm of statistics. Bear with me: this stuff is important to understand and you can impress all your friends with your gambling smarts. The gamblers fallacy is very widely believed because it just seems to make sense. Let’s look at a coin toss: the likelihood of landing on heads with a fair coin is one out of two. Following from this, the likelihood of landing on heads twice in a row is one in four (1/4), and of course it will be the same for tails. We can keep going: the probability of landing on tails three times in a row is 1/8, and for four heads in a row it is 1/16.
Knowing this, you might think that once you’ve landed on tails once, you are more likely to land on heads the next time because the probability of two tails in a row is only one in four, and if you do land on tails again the likelihood of landing on it once more gets even smaller, and so on and so forth. However, this is not the case.
It is true that landing on four heads in a row has a probability of 1/16, but so does every other combination. So the likelihood of “four tails in a row” vs. “three tails, then a heads” is equal: they are both 1/16. Whatever you have thrown in the past cannot influence the odds of the future. Each time you toss a coin, the likelihood of landing on tails is 1/2, regardless of previous throws.
The coin toss example is just an example: it is the same for every form of gambling that is based on luck. When you’re playing pokies and losing, it doesn’t mean that you are more likely to win on the next game. The opposite is also true: if you are on a winning streak that does not mean that you are more likely to lose on your next game.
Of course, the exact odds depend on the house edge of any particular game. There is usually at least a small house edge, so it is still a good idea to quit when you are ahead. But if you are losing and start to think to yourself “If I just play a little bit longer then I’m sure to win”, check yourself. Don’t let yourself be subject to the gambler’s fallacy.