Skip to content
Statistics logo
  • Courses
    • See All Courses
    • Calendar
    • Intro stats for college credit
    • Faculty
    • Group training
    • Credit & Credentialing
    • Teach With Us
  • Programs/Degrees
    • Certificates
      • Analytics for Data Science
      • Biostatistics
      • Programming For Data Science – Python (Experienced)
      • Programming For Data Science – Python (Novice)
      • Programming For Data Science – R (Experienced)
      • Programming For Data Science – R (Novice)
      • Social Science
    • Skillsets
      • Bayesian Statistics
      • Business Analytics
      • Healthcare Analytics
      • Marketing Analytics
      • Operations Research
      • Predictive Analytics
      • Python Analytics
      • R Programming Analytics
      • Rasch & IRT
      • Spatial Statistics
      • Survey Analysis
      • Text Mining Analytics
    • Undergraduate Degree Programs
    • Graduate Degree Programs
  • Partnerships
    • Higher Education
    • Enterprise
  • Resources
    • About Us
    • Blog
    • Word Of The Week
    • Newsletter signup
    • Glossary
    • Statistical Symbols
    • FAQs & Knowledge Base
    • Testimonials
    • Test Yourself
  • Student Login

Home Blog Problem of the Week: A betting puzzle

Problem of the Week: A betting puzzle

QUESTION: A gambler playing against the “house” in a game like roulette or slots adopts the rule “Play until you win a certain amount, then stop.”  Will this ensure against player losses? What will be its effect on the house’s profit?

ANSWER: Some look at this rule and figure that it rules out player losses and therefore must have a negative effect on the house.  Others, noting that the rule fails to account for the cases where a losing gambler runs out of money, allow for bankruptcy forcing the player to stop.  If the average bankruptcy level represents more money than the “win” stop threshold, they may reason that the effect on the house would be positive

In fact, the rule has no effect on the house profit, provided it does not reduce the volume of play.  The odds on each play remain the same and are independent from one play to the next. It does not matter to the house when one player gets up and another takes their place.  Visualize the situation as follows: the house is separated from the players by curtains, and cannot see them. The house sees only a steady stream of plays at unchanging odds, and does not care what rule a player is using to determine when to get up and leave.

Subscribe to the Blog

You have Successfully Subscribed!

By submitting your information, you agree to receive email communications from statistics.com. All information submitted is subject to our privacy policy. You may opt out of receiving communications at any time.

Categories

Recent Posts

  • Table Test
  • Oct 19: Data Literacy – The Chainsaw Case
  • Data Literacy – The Chainsaw Case

About Statistics.com

Statistics.com offers academic and professional education in statistics, analytics, and data science at beginner, intermediate, and advanced levels of instruction. Statistics.com is a part of Elder Research, a data science consultancy with 25 years of experience in data analytics.

Our Links

  • Contact Us
  • Site Map
  • Explore Courses
  • About Us
  • Management Team
Menu
  • Contact Us
  • Site Map
  • Explore Courses
  • About Us
  • Management Team

Social Networks

Linkedin-in Twitter Facebook-f Youtube

Contact

The Institute for Statistics Education
2107 Wilson Blvd
Suite 850 
Arlington, VA 22201
(571) 281-8817

ourcourses@statistics.com

  • Contact Us
  • Site Map
  • Explore Courses
  • About Us
  • Management Team

© Copyright 2022 - Statistics.com, LLC | All Rights Reserved | Privacy Policy | Terms of Use

By continuing to use this website, you consent to the use of cookies in accordance with our Cookie Policy.

Accept