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Comment by giancarlostoro | Hacker News Reader

I rarely go to Casinos, but usually go in with $20, if I lose it, that's basically it for me. I can't imagine justifying throwing more money after losing it all, only in video games where gambling is allowed.

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The key (and way easier said then done) is to take a small amount of money out, accept that its likely all going to be gone, and try to milk it slowly so all the free drinks you get are worth the money.

I like in NYC, so achieving the typical cost of drinks is not hard.

Not a bad tip! I will keep that in mind.

I had a professor once say that when the lottery gets really big, at that point, it's not gambling, it's an investment. But keep it small.

It's interesting the types of people who can walk into a casino like you and I and say OK, $20, that's all I'm spending. We lose that and we say good night. Other people… They say no, I can win this, and so they go and spend another $20.

That decision point - to continue or withdraw - is utterly fascinating.

Out of curiosity I once went into a very small-time casino. I ended up at a blackjack table with various characters, one of whom was a single mom. She said she was playing to get money to buy the kids Easter chocolate. She was quite experienced and was up a few hundred dollars for a while. And she said that was it, she was leaving. And then she didn’t. And then lost it all. And then gained some back. And lost that too.

By the time I’d slowly bled away my $20 and gave up, she was still there.

Hell I go in with $20 just to get the free drinks and sit there bored out of my mind hitting some stupid button that occasionally gives me another round of drinks or not. I am so sick of Vegas and will never go to another conference there.

> I had a professor once say that when the lottery gets really big, at that point, it's not gambling, it's an investment. But keep it small.

This seems like funny logic.

My local provincial lottery can range from $5 to $50 million. If I were to accept that I could possibly win, anything in that range is a ridiculous sum of money for me - easily more than I am likely to make for the remainder of my career.

I know I won't win if I play, but if I thought I might I can't figure out why $5M is gambling, but $50M would be an investment. Either way, it's absolutely life changing "quit my job tomorrow" money.

If a ticket costs $1 and you have a 1 in 10 million chance of a win, any payout larger than $10 million (after taxes) gives a positive expected return. Unwise to invest your life savings on a longshot, but still worth buying a few tickets if the expected return exceeds the market rate. I believe the Kelly criterion gets you to an exact percentage of your wealth to spend on tickets.

> any payout larger than $10 million (after taxes) gives a positive expected return.

and conditional on you being the sole winner too (unless the lottery is guaranteed to only have one winner).

Taxes, too: the government will be taking over a third of your winnings for a big payout.

depends on the country

Discounting the possibility of multiple winners splitting the jackpot, and not taking into account taxes on the earnings.

Sure, if you take the whole population, then each ticket will, on average, be worth more than $1. That doesn't change the odds of my making money back on this. There's going to be a handful of people who massively skew the statistics, but it doesn't mean that for the vast majority of players the odds get any better or that their ticket becomes more winning. Expected return doesn't matter on a ticket by ticket basis when the odds and winnings are so skewed, it creates an illusion of worthiness that doesn't exist for the single player.

I think, it's meant like this:

If the lottery gets too big, then it's an investment = if your gambling gets to big, then it's an investment. If you do big gambling, then it's an investment. The law of bigger figures :) the often you try, the higher the chances (whereas the chances stay unchanged here)

It's not about the lottery and it's pots itself (like euro jackpot, USA Powerball.. etc)

Games of chance have an expected value [0], in this case the expected amount you can win with your ticket. Normally, this is very low, lower than the price of the ticket, for sure. However, when the payout is high enough, the EV goes up. If the EV surpasses the price of a lottery ticket, that's the point where you think about "investing".

Of course, calculating EV is very hard, so people just draw a line in the sand - "if the payout is $50MM or over, I will buy a ticket, otherwise, I won't".

0 - https://en.wikipedia.org/wiki/Expected_value

I think the problem with that is it forces the data into a normal distribution when it's not actually the case, and instead it's a very large bump at one end with an incredibly long tail that drags the other tickets up?

It makes sense in statistics, but as a single person with a single ticket, it's much less relevant. The EV of a ticket is over 100% of the cost, but that doesn't matter for 99.9999% of the players and only matters for the very very few with the correct numbers.

Another thing about EV that gamblers conveniently forget is that it only matters if you are repeating the experiment many times. So if the lottery odds are 1:100M, and you're only buying one ticket, your odds are effectively zero, and it doesn't matter if the payout is $200M, $500M, $1B or $10B.

The casino can live with a 0.01% edge because they are conducting millions of games. You're not playing that many times.

That's the part what causes addiction. First you win. Then you lose. Then you win. A feeling of success and happiness will overcome you (that hormones..).

People who can't stop are possible gambling addicts already, or, are about to become ones without even noticing by themselves.

And further, I classify myself to: I wouldn't even go to a casino except it's the money I found right before it's entrance I want to spend there.

And that actually minimize the possibility that I'll ever will make the experience how it is to feel lucky/lose/win in a series, minimizing my understanding of such a situation. And that's may be is the point we don't understand how it is, not to be able to leave after 20 bucks are lost, but rather try to get it back. Just a thought.

(I compare it to an alcoholic. One alcohol addict, because too often & too much & too good feelings. One occasional drinker will never go over the threshold. One who never drinks can't even understand how it is to want to get drunk.)

With gambling, that dopamine rush and crash is pretty intense, so I can wrap my head around that. That TikTok, Twitter or even Facebook leverage the same reaction to keep people glued to their phones consuming bullshit that they otherwise wouldn't even care about fascinates me.

It's best to think of it as spending $20 on entertainment.

Right. There are lots of things I’ll spend $100 on an entertainment expense for a night out. And plenty of things that people think is worth $100 for entertainment that I don’t find to be worth it.

And the house edge at a casino isn’t THAT bad. Eg if you’re playing blackjack at $20/hand, a house edge of 1% means you can play 500 hands for your $100.

It's a good strategy but I think it's quite hard to notice that gambling is becoming addictive and a problem

I used to do this in Niagara Falls, but that would be enough to get you free parking.

Now they cut back on that, I park elsewhere and they don’t even get a chance at my $20 on red anymore.

If you ever go on a cruise, the ones with a casino typically give you about $10 of free in-casino credit.

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