Each casino placed the advantages over (also called the house edge) all its games, allowing them to make huge profits. Even though the casino may occasionally lose money to some lucky gamblers each, the casino may still make up for their losses.
So why is there still a lot of people flocking to casinos, knowing that the house edge makes a game virtually impossible to win? Most of these players can not have an idea that they are bound to lose at last, or they think they can turn the odds in their favor.
Knowing that the odds are stacked against you the moment you enter a casino, why would you worry about playing at all? The answer to this is that you can still “shift” the odds in your favor, if you know how to and when. This theory can be explained by the mathematical theory called variance.
The variance, citing the dictionary, is the square of an average square deviation. What? You do not need to be a math wizard to understand variance. The following example will give you an idea of ??what the variance is and how it applies to the casino that plays.
Let’s say you throw a coin 1,000 times, expect to head to appear 500 times and queues 500 times too. For example, you place the $ 1 bet for each flip, winning if the head appears. Now, because of the existence of the house edge the casino will not pay you exactly $ 1 if you win. Instead, the casino pays out the amount subtracted from the percentage of the house edge. So if the house edge is 0.4%, the casino will pay you $ 0.96 (1 x 0.4).
To account for the negative expectation, just subtract the expected amount of winnings from the expected amount of losses. The negative expectation after 1,000 coin vibrations is $ 20 (500 x $ 1 = $ 500; 500 x $ 0.96 = $ 480; $ 500 x 480 = $ 20).