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Best of Mark Pilarski
Apples and odds19 November 2004
In simple layman's terms, exactly what do you mean by "odds"? I find it sometimes very confusing. Linda R.
You are not alone, Linda; many folks run afoul of "odds" — partly
because the word has been kidnapped and put to a somewhat distorted use that
blurs the difference between true odds and what the casino pays to a winning
Essentially, true odds express the likelihood that something will happen. Say
you have a sack with five apples in it, one each of five different varieties, and
you challenge brother Burt to reach in and blindly pull out one of a specified
variety, a Granny Smith for example. He has one chance in five of succeeding,
and four chances of failing. If you were betting on the outcome, he'd owe
you a buck if he failed, and you'd owe him four bucks if he succeeded.
But if you were a casino and had to make money over the long haul, you'd
have to pay him less than what the true odds called for – $3.50, for example.
And the use of the word "odds" in connection with that sort of diminished
payoff does lend to confusion.
But, Linda, understand one thing; the casino "odds" are always, repeat,
always, in favor of the house. To illustrate, the casino's take on a slot machine
can be as high as 30%. This means that on a slot machine that holds 30%, if
you bet $100, you can expect to walk away with only $70. The more you play,
Linda, the more you will lose. Granted, some gamblers do occasionally win and
are temporarily ahead even on a tight machine that holds such a high percentage,
but in the long run the casino "odds" will prevail, and the gambler
Before I shuffle: Next week I am going to share an exception to that rule. I know a person, her name is Kimmy, who actually won 47 times in a row in a casino, and I saw much of it with my own, lasik-enhanced eyes. It's documented, so stay tuned.
Though your e-mail didn't specify which state lottery you were speaking
of, there is some variation in payoffs. But in general, to win the grand prize
in a typical Lotto game you buy a dollar ticket, and then correctly match six
numbers drawn randomly from, for example, forty-nine numbers. This is called
a 6/49 game. The probability of any one ticket winning the jackpot in 6/49 lotto
game is one in 13,983,816.
Lottery agencies typically fish out 50% of each dollar wagered, some
of which covers expenditures, but the rest is turned over to the state for civic-minded
programs like education.
Per your example, with $20 million in the Lotto jackpot kitty, the state grabs half of that figure instantly, leaving the other half for cash prizes, including smaller cash awards for matching fewer than six of the numbers. What you're left with, Clark, is roughly $8 million for winning a 14 million to 1 bet. If around 20 million people were playing the game that week, it is probable two people would win, splitting that pot, which in your illustration was $4 million apiece.
Gambling quote of the week: "Winners stay cool: they have the guts
to face the envy and hatred of the losers and the wrath of the gods."
Lyle Stuart, Winning at Casino Gambling
Best of Mark Pilarski