[ksdale]

Do you think most of the people who go to casinos think they're going to lose money? I think an unfortunate percentage do not realize at all that the odds are stacked against them. Their misunderstanding of statistics means they are quite literally getting scammed. And for the remainder that are doing it for entertainment, that's quite literally what I'm proposing be the standard for investing in companies.

[HWR_14]

> Do you think most of the people who go to casinos think they're going to lose money?

Yes. Everyone I know going to a casino can be asked how much they plan on losing a day. Almost all will respond with reasonable (for their finances) answer. The others still have an answer that I may think is unreasonable, but that's just a greater percentage of disposable income going to gambling than I think makes sense.

I don't even think most gambling addicts think they are going to make money, any more than most smokers don't think they're immune to cancer. There are some areas (poker, sports betting) where a lot of people think they will make money, but that's because they're games of skill and some people can make money there. And people overestimage their own skill.

[User23]

I’m an entrepreneur, an accredited investor, and a recreational gambler and from my perspective everything you’ve said is completely true.

Casino gambling is only a financial strategy in the most unlikely scenarios, like the infamous MIT blackjack team.

By and large it’s a recreational activity. There’s the dopamine hit from the risk and another dopamine hit from your host paying for everything because you’re willing to spend 6-8 hours at the tables on your vacation. The slots are definitely a worse value proposition even with the higher comp rate.

The simple fact is that recreational gambling is less about strategy and edge and more about proper risk management. If your bankroll lets you Kelly bet at a level the marketing execs want to see then you will have a good time with predictable max losses.

I can’t imagine being entertained by slots, but if someone is and the house edge isn’t completely obscene, which sadly the gaming board permits, then even there there’s a reasonably priced vacation to be had with a Kelly betting strategy.

[HWR_14]

Out of curiosity, do you have a good source of information for those bet levels?

[User23]

There's no such thing as a 100% safe betting strategy. Even in a player advantaged game with optimal betting an horribly unlucky player with a finite bankroll can still be ruined! So never risk money you can't afford to lose. Casino gambling is a recreational activity, not a way to reliably make money outside of the occasional astronomically rare exception.

The wikipedia page[1] is decent enough. Some searching will find various gambling and math sites that go into further detail, but I don't have one in particular I'd recommend over the encylopedia page. The super simple overview is that one always bets a fixed percentage of one's bankroll. That means as one wins one's average bet goes up and as one loses it goes down. The Kelly criterion is how one determines the optimal percentage.

Strictly speaking the correct Kelly bet for a house advantaged game is zero, so it only applies when the player can gain an edge, such as with blackjack advantage play or sports betting[2]. It's not too difficult to adjust the strategy for a house advanced game. The player just has to reckon what the comps (which are predictable, being based on play time and average bet size) and the rest of the experience are subjectively worth. For many persons the correct bet size is zero! If one is playing for entertainment and comps and not with an advantage over the house, then one can expect to spend a significant chunk of one's bankroll!

[1] https://en.wikipedia.org/wiki/Kelly_criterion

[2] My understanding is that it's possible for a savvy sports bettor to have better knowledge of the true odds than the bookie and thus make advantaged bets. On the other hand, far more persons believe that they do than actually do.