In many casino games, you bet X dollars, where you get to pick X. If you lose, t
ID: 2956083 • Letter: I
Question
In many casino games, you bet X dollars, where you get to pick X. If you lose, the casino keeps your money, and if you win they give you 2X dollars (your original X dollars, plus X dollars from the casino). A friend told me how you can be guaranteed to win at this games. The first time you play the game bet $1. If you win - quit - you are $1 richer. If you lose, play again, betting $2. If you win, quit, you will have won $1 overall. If you lose, play again, betting $4. Keep going. Each time you lose, double your bet. When you eventually win, quit, and you will have an overall profit of $1.You can win more than $1 this way too. Each time you win, go back to betting $1. Each time you lose, double your bet. Play as long as you want, just make sure to quit immediately after winning. You will win Y dollars, where Y is the number of times you won.
I described this algorithm to a guy who owns a casino, and he said he was perfectly happy to entertain people who use that strategy. Why was he happy to have people like that in his business, when he is guaranteed to lose money on them?
Explanation / Answer
Well, if he was only dealing with people betting low (i.e. $1, $2, $4, etc.) then he is probably benefiting more than it seems. Although he may be losing some money from time to time, he is still attracting attention of others perhaps. Just by entertaining these people, which is his job, he may be successfully attracting other people willing to bet (perhaps high rollers). In addition, the odds are great in his favor that he the house will come out in the green overall. On a side note, this is perhaps why casinos pay to put people who won money in complimentary hotel rooms.
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