The Law of Large Numbers

Gambling might depend a lot on luck but in theory, it has a lot to do with numbers.

The game requires you to risk money or anything else that’s valuable in the quest to win money or prize. No matter how good you are with numbers, there’s always a chance of leaving the casino with less or no money than you started off with. 

But, what fascinates us the most is its relation with numbers, which we will be discussing in this post. We are going to get into the Law of Large Numbers and figure out how it’s related to gambling. 

The Law of Large Numbers

The law of large numbers is one theory most gamblers tend to misunderstand. What this leads to is a lot of confusion and disappointments resulting in loss of money.  

So, what is the law of large numbers?

The law of large numbers is basically a theorem which is a fundamental element in probability theory. The law states that if a person conducts the same experiment a large number of times, the result will be in favor of the person or near the expected value.

Law of large numbers can be put in coin tosses, roulette spins, and dice rolls. What it really means is that the law can be applied at any random event.

Then there is also the concept of weak and strong law of large numbers. The only difference between the two is the convergence of random variables. There are also some practical implications of the law of large numbers.

1. It is only applicable on a very large sample. Thus the name ‘Law of Large Numbers’. You should not be applying the law on a sample of 20 coin flips or roulette spins.
2. The possibility of getting a short term streak of one kind of outcome should not confuse you. It is possible and natural.
3. Probability is not guaranteed in the law of large numbers. Yes, convergence is possible but often after a very large sample.
4. The probability of each trial is independent.

The Law of Large Numbers in Gambling

The law of large numbers is the number one reason why the house or casino will win in the long term. Yes, there will be a few odd events where the house loses, yet on an average with many attempts, online casinos will come out as winners.

We have mentioned all the practical implications of the law but many gamblers make the mistake of disobeying the guidelines and lose. Most gamblers misunderstand the law of large numbers and commit mistakes like the Hot Hand Fallacy, Gambler’s Fallacy, misunderstanding probability and joint probability.

Conclusion – How to Play Smart?

There’s so much more to gambling than just knowing what the odds are. Numbers can be misinterpreted due to biases and use of heuristics. The best advice that we can give you is to remain aware of the fact that your mind can trick you to lose. Therefore, understand the law of large numbers and probability adequately to make decisions under tough situations.