The Gambler’s Fallacy
by Betrics Co. Author Mike Noblin
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by Betrics Co. Author Mike Noblin
Last updated
Was this helpful?
If you have been betting on sports for any length of time, you have probably heard of the phrase “The Gambler’s Fallacy." But, even though you have probably heard of this wording, do you actually know what it means? So, we will dive into the Gambler’s Fallacy and other fascinating information regarding it.
Gambler’s Fallacy (AKA the Monte Carlo fallacy) is the false assumption that if an event happens repeatedly (ex: The Saints have beat the Bucs 4 straight games), the opposite of that event is bound to happen soon (Gambler thinks “man the Bucs are DUE to beat the Saints).
Gambler’s fallacy is also the false assumption that if an event repeatedly occurs (Saints example above), that same event will keep occurring in the future. (Gambler thinks “the Saints always beat the Bucs”).
Here are some of the many dangers of the gambler’s fallacy that a sports investor must be aware of.
Sports bettors are human, and all human beings have flawed ways of thinking and processing information. Let’s look at the above example of the Saints having a 4-game winning streak against the Bucs. Guess what? All those games were in the PAST! You are probably thinking, “no S& Sherlock” (LOL)! But seriously, those 4 games are all independent outcomes and have no impact on the next game's outcome between the Bucs and the Saints. (Side Note: To drive this point home, the Bucs did indeed beat the Saints on January 17th in the NFC Divisional Round of the playoffs.)
Sports bettors are notorious for thinking that the hot streak will never end. This kind of goes in line with the clouded judgment warning above. How many horror stories have you heard about a gambler winning 5 straight games? He falsely believes that he cannot lose and decides to wager his entire bankroll on the next game. I don’t have to tell you how that story ends, but as we say down South, “it ain’t good!”
Lord have mercy! This one aggravates me to no end! Putting too much stock in certain trends is a type of gambler’s fallacy. For example, let’s say the Cubs have won 11 straight games when playing on Tuesdays at night. Who. Freaking. Cares? Those are 11 random occurrences and have nothing to do with the outcome of the next Tuesday night Cubs game!
A. Combating gambler’s fallacy is simple but not easy! First, a bettor must constantly remind himself that each game is different. As they say in the poker or blackjack world, “each hand is a new hand."
Practicing good mental discipline and always asking yourself why you are betting on a certain game is a good path to follow. Find a friend who is into sports investing and hold each other accountable.
Remember the old ABC line from the movie Glengarry Glenross? Always Be Closing! For use in the sports betting world, it should be ABG: Always Beware Gamblers fallacy!
