It is some years ago now that one of me best mates – a really bright university graduate in pure mathematics from Hyderabad, India - told me how a little known quirk in probability theory (the exponential paradox) could be used to make money. At first I thought there must be some catch. But there wasn’t. And like all brilliant ideas it was devastatingly simple. A guaranteed winner.
Here’s how it works:
You go to a casino and the roulette wheel. You can choose to place a bet on either red or black. Let’s say you place your first bet of US$1,000 on red and you’re lucky and it comes up red. You’ve won US$1,000. Get out the casino now.
But what if you’ve lost your first bet? Simple: just double your stake to US$2,000 and bet on either black or red the next time around. If you win this time, you will be up U$1,000 (after winning the second bet of US$2,000 but losing the first bet of US$1,000). Not bad. Now you have won, get out of the casino as quickly as possible.
Okay. But what if you are an unlucky bugger and you lose both your first and second bets? Simple – just double the stake again to US$4,000. If you are lucky now, you will still be up US$1,000 (you will have lost your first two bets of US$1,000 and US$2,000 but won your third bet of U$4,000. Note also – very important this – that although you have placed three bets – and won only one of them – you are still up due to the fact that the magnitude of your bets is increasing on an exponential basis).
To lose three on the trot would be highly unlikely (only a 12.5% probability) – but still your winnings of US$8,000 on winning the fourth time would exceed the losses of your first three losing bets: US$1,000+US$2,000+US$4,000=US$7,000.
And mathematically, winning using this strategy is a certainty of course– if you keep betting on a fifty-fifty bet you will eventually win even if you are the unluckiest blighter alive (try flicking a coin ten times and never getting a head for example – virtually impossible).
So what are the pitfalls?
Well, first off, the casinos know about this ruse. If they catch you adopting the exponential bet placing strategy they will make sure that you will never be allowed into that casino again. They could also choose to cripple you. Physically. When I employed this gambling strategy in London I was absolutely p###ing myself. It was the first time I had actually sweated buckets through the palms of my hands. The croupier was a nasty looking man and it isn’t a secret why London casino owners keep pigs on their farms in Essex: three or four swine will devour an entire human body – bones et all – in less than two days. Not a trace left. Not even a human hair.
Second, it’s very difficult to think with your brain and not your heart in a casino. After winning on the roulette wheel at the third attempt, I felt an incredible rush of euphoria flowing through my veins like I was on #&*#$ or something. The desire to continue gambling was immense. But as soon as you break the rule of placing bets exponentially the game plan falls apart of course, and you end up losing everything.
So good luck with this strategy and I hope you make some money. Where to place your bets? Well you could do worse than Mr Sampoerna’s online gambling venture – Mansion – sponsors of North London’s (in)famous Tottenham Hotspur FC!