[gerard]

This implies that both side of the transaction will inevitibly go bust, bookmaker and gambler alike. It may be true, but it's like saying we're all going to die at some point. The expected times are long enough that it's mostly not worth worrying about.

If the positive-expectation gambler can reduce his stakes he will find a comfortable expected time-to-ruin, which might be hundereds of years if he was able to quantify it. In this position, he should continue to place his bets.

We make hundreds of small positive-ER decisions like this every day and we don't shy away from them for fear of the black swan.