What Is the Gambler’s Fallacy and How to Avoid It
In August 1913 at Monte Carlo Casino, millions of money were reported to be lost on a roulette wheel. What happened that night is very unlikely to happen even today. On a single roulette wheel table, the wheel landed on black 26 times consecutively.
Because this is something that never really happens, the players on this table placed their next bets, thinking that the ball is due to land on red. By the time this happened, millions of money were already lost.
This event was then called the Monte Carlo fallacy. It is now more known as the gambler’s fallacy. This is not, however, only applicable to the game of roulette. Today, even if you’re playing at an American online casino and are playing online slots for real money USA, you can still fall for this fallacy.
So, What Exactly is a gambler’s fallacy?
The gambler’s fallacy is an erroneous belief that a random event is less or more likely to happen based on the results of a prior event. It’s a mistaken belief that a sequence of random events is related. It could be vice versa too since you can also think that as a certain event hasn’t been happening recently it will happen soon.
Now, even if this phenomenon came from casino gaming, hence its name, the gambler’s fallacy is now not just about gambling. It’s also applicable to almost anything that could happen. Here are different ways that you can fall for this fallacy.
On taking out a loan
Some studies found evidence of how loan officers think when it comes to loan approval. There is this negatively auto-correlated decision-making when it comes to how they approve loans.
This is somewhat a game of chance because there are times when officers would approve loans in a row because they assume sequential streaks. There are also instances when a loan is unrelated to the next, especially for less-experienced decision-makers.
When it comes to sports, fans may tend to think that their team or athletes in a winning or losing streak are expected to end the latest match with a different streak. There are also instances, where if a team is losing five times in a row, they will also win five times in a row in the next matches.
This is also the case for sports betting. If a punter has lost multiple times already, he’ll be thinking that he is due for a win soon. That said, he’s probably not going to be logical on the next bet that he will place.
This is dangerous, however. Having the mindset that you’re due to win soon could lead to chasing losses. This is problematic gambling behavior that would just get you in trouble.
Baby boy or baby girl
This is also a very common example of the gambler’s fallacy. Let’s say a woman already has 3 daughters. Since all of them are already girls, some will be quick to say that the next kid will be a boy. This also applies vice versa.
There are also instances when they think the sex of the baby will be alternate. The firstborn is a girl, the second is a boy, and the third is a girl. In this case, some may then think that the next baby will be a boy. This isn’t the case because the formation of the baby’s sex is random and not based on the gender of the prior baby.
Playing casino games
Aside from roulette, the gambler’s fallacy is also applicable to slots. When playing slots, winning and losing streaks can occur. When you’re on a winning streak, you may think that anytime now, your next spin will lose, but your last and next spin are always not related.
Also, if you haven’t won for a while, you might have the thinking that you’re due for another win. Then again, this is a false belief because you’re never due for anything when it comes to playing this game. The results are always random.
How to avoid experiencing gambler’s fallacy
When it comes to ensuring that you don’t fall for this phenomenon, you need to be alert and logical, whatever it is you’re doing. When placing bets at the casino, always treat each round as independent from the other.
Results are random and in no way connected. That said, for every round of any game you play, you should always start fresh.