Gambling - Types of Biases That Casino Gamblers Have | Fintech Zoom - World Finance
Monday 21st December 2020
At some level, bias is an unavoidable reality of life. Human beings have developed these feelings, at their core, with survival in mind. Unfortunately, some biases are no longer necessary in the modern world and actually work against our best interests at times.
Of all the arenas in the world to witness a range of biases on full display, the casino is at the top of the list. The good news? If you recognize them, you have a real chance to avoid becoming a victim of your own biases.
In this article, I'll lay out the top biases observed in real money casinos everywhere.
Okay, this one might not be a bias per se, but it certainly falls into the category of a common misconception. In an article for a gambling site, it simply can't be ignored.
The Gambler's Fallacy, a term first used in 1971 but Amos Tversky and Daniel Kahneman, is classified as an example of the representativeness heuristic. If that doesn't quite ring a bell, I'll break it down in a way that's much easier to understand.
The Gambler's Fallacy is the incorrect belief that a prior event has an impact on a future event. Here's an example that can be observed, without fail, in just about every casino in the world on a daily basis:
When looking at roulette, it can reasonably be assumed that there's an equal chance the ball lands on red or black. Over the course of a million spins, it's likely that the ball will not favor either side. The operative phrase here being, "over the course of a million spins."
A player who is committing the Gambler's Fallacy incorrectly thinks that this 50-50 red and black split is going to be statistically reliable with a smaller sample size. They believe that if the last five spins have ended on red, the probability that the next spin will be black is increased significantly. This is a mistake.
Regardless of the result of the last spin, the next spin will always have the exact same probability. I'll go through one more example often used to describe the Gambler's Fallacy, although it's not in reference to a game you'll find at any gaming establishment.
If you flip a coin, the chance it will land heads or tails is exactly 50% for each. If you flip a coin that ends up on heads nine times in a row, on the 10 toss it still has an exactly 50% chance of being heads or tails.
At the end of the day, this knowledge isn't going to help you accurately predict outcomes, but it should save you from incorrectly thinking one outcome is more likely than the other.
This form of cognitive bias also won't help you identify future events, but it should help you make more sober decisions when gambling.
Outcome bias refers to the idea that when you incorrectly predict the future, you made the "wrong" decision. Here's a common example used to explain this phenomenon when playing blackjack:
The bottom line is that, in casino gambling much more than sports gambling, there is almost always a stastically-correct play. Making the correct play doesn't guarantee a win, but it does guarantee you're putting yourself in the best position to win.
It's crucial for gamblers to recognize that you can make the right play and still end up losing. The good news? Sometimes the house gets the short end of the stick, too.
This is something that people struggle with in nearly every facet of life - from the blackjack table to the voting booth, the stock market, and beyond.
Confirmation bias is what is present when people seek out information that backs up their initial preconceived notions while ignoring and evidence to the contrary.
Here's an example:
A belief exists that there is a possibility that other players at the blackjack table can have an impact on the table's performance as a whole. Meaning if they make "wrong" decisions, everyone feels it. If an inexperienced player does something that you immediately recognize as a bad move - and then the dealer wins as a result of this move - the whole table groans saying, "I knew it - he messed it up for us."
The reality is that even if someone makes an inadvisable play, they're not to blame for the end result. They could have just as easily caused you to receive a favorable card as a result of their inexperience, and then the narrative would be shifted entirely.
It's imperative that all players evaluate both their past and future plays with some semblance of objectivity.
It's probably not news for me to point out that the events that happened most recently often stick out as more prominent information to use when making a decision. The unfortunate thing about this form of bias, it's that it's even more "subconscious" than the others. Meaning it's harder to recognize and harder to overcome.
This one can be seen in both simple and complex decision-making processes, but for an example, I'll stick to something that is relatively easy to understand.
Recency bias is also one of the common sports betting mistakes. If sports are your preferred method of gambling, it would be highly beneficial for you to read up on all the many ways it impacts decision making in relation to predicting games.
We hear the saying all the time: "Look on the bright side!" I have to admit, this feels like good information that can only help people lead happier lives by making the most of a potentially bad situation.
I hate to rain on the parade of anyone who considers positive thinking a good thing, but when it comes to risking your hard-earned money betting on casino games, it can become a dangerous mindset.
Nobody puts in a bet and thinks that they're going to be wrong. It doesn't matter if it's on a roulette wheel or a football game - any time you make a decision, you're going to believe, at least initially, that it was the correct one.
Where optimism bias becomes a real problem is when you start to believe in yourself a little too much. As a side note, I'd like to add that optimism bias is often increased after consuming a cocktail or two.
Often times, winning, while normally a good thing, can be the source of optimism bias. After getting lucky a few times you might start to think "it's just my day - I can start taking more risks."
Here's an example: if you're at the roulette table and are having success, you might decide to start placing bets on individual numbers because you're "just feeling it tonight." Another example would be hitting in blackjack when you have 17 showing, for the same reason of just feeling lucky.
Being a happy gambler isn't bad, but anything other than total objectivity when gambling is going to have a negative impact on you in the long run.
Nobody is immune to bias. It's an inherent trait that just has to be dealt with in most facets of life.
The good news is that if you're able to recognize your own biases when making a decision, you can reevaluate and make sure you're being objective. Keep this in mind next time you bet and your bankroll should be rewarded.