Gamblers and superstition
On the 18th of August 1913, gamblers in the famous Casino de Monte-Carlo in Monaco are having a great time after the ball fell on black 26 times in a row. Thinking that the ball will not land on black anymore, they placed their bets to the red. The ball still landed on black. Still thinking that the ball will never touch black, they stayed on red, but the ball still went to black.
The ball landing on black more than 26 times in a row was an extremely unusual occurrence considering the odds of black or red occuring 26 times in a row is 1 in 66.6 million.
The gamblers still went firm on red, while the ball still continued to hit black. As a result, the gamblers lost millions of francs. They incorrectly thought that by betting on red against black will give balance on the bet.
The story was a real event that happened that one fine summer in Monaco, and it was the most famous illustration of an anomaly called ‘Gambler’s Fallacy.’ It also came to be known as the ‘Monte-Carlo fallacy’ after that well-known occasion.
This fallacy mentioned refers to the mistaken belief that events that happen more frequently than normal should happen less likely in the future or vice versa.
Gambler’s fallacy in betting
Sports bettors sometimes fell victim to superstitions such as the Gambler’s fallacy causing a loss of a significant amount of money. For example, Arsenal has been enjoying a 20-match unbeaten run. Some punters would bet that the Gunners will still get out of the match undefeated. Meanwhile, other bettors might thought otherwise because a balancing loss would definitely come out this time. Arsenal apparently wins and those who thought that the Gunners will not dominate the match will lose their bets.
Despite seeing the consistency in the performance of Arsenal, those who lost their bets still thought otherwise. This is one of the errors sports bettors are making.
This fallacy could also work otherwise. For instance, a lot of people thought that either Lionel Messi or Cristiano Ronaldo would win the 2018 Ballon d’Or again this time because they dominated the award for the past ten years. It turns out, Luka Modric topped the award, while Ronaldo only went second and Messi to the fifth.
Dealing with the random
One could not fully blame punters who think the way described in the fallacy as results really are random, like how the black in the Monte-Carlo case was landed 26 times in a row.
Similar cognitive biases are normal and healthy, but completely subjecting to such ways of thinking would eventually result to loss of resources. Bettors who depend on mere gut feeling or superstition will find sports betting unprofitable and costly.
Punters could always use mathematical tricks as tools to guide them in their bets, such as the Kelly criterion and Fibonacci method.
Randomness is the image that one paints when he or she bets unaided, but the keen punter calculates the probability of an event occuring before placing stakes.
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