Tuesday, 10 October 2017

Gambling With Mathematics

The mass shooting in Las Vegas earlier this month was perpetrated by an individual who described himself in legal documents as "the biggest video poker player in the world". 

The documents were filed in a deposition for a (lost) lawsuit against the Cosmopolitan detail him betting (not losing) $1 million a night.

His younger brother Eric described the killer as a "gambler who used mathematics".

That he was wealthy, a multi-millionaire, appears to have been the result of his business acumen rather than his gambling, a hobby he took up with some intensity in retirement.

A recent article in The New Yorker Magazine had this quote:

If all this guy did was play video poker, he was not a ‘poker player.’ He’s just gambling.” He went on, “There’s a small chance that Paddock played the percentages very well and eked out a small edge, but it’s very doubtful. That takes a lot of skill and time, and only playing one particular kind of video-poker machine. To make money playing video poker, it takes a lot of luck.”
It also teases us with this:
“Video poker is well known for attracting people who have compulsive gambling problems,” he told me. “It’s almost the perfect gambling game. But it also has the property of being able to be beaten. So it attracts a lot of very intelligent people.”
In the early days of Video Poker, there's evidence that some machines paid up to 103%, but edges like that don't last for long and the top machines at Mandalay Bay reportedly pay out up to 99.17%.

The key for the killer was probably that from time to time, casinos offer promotions that can reduce that already miniscule house edge still further, and the comps casinos hand out can make the game a relatively cheap hobby, if not a big earner.
“If you get close to 100 percent — that’s where he gambled,” Eric Paddock said. “It’s not just the machine. It’s the comps, it’s the room. It’s the 50-year-old port that costs $500 a glass. You add all that stuff together and his net is better than 100 percent.”
The mention of APs (Advantage Players) reminded me of the "luckiest" woman in the world, Joan Ginther who won millions in the Texas State lottery, not once or twice like normal people, but on FOUR separate occasions. 

A pure coincidence of course that it turned out she was a former professor at, and had a PhD in statistics from, Stanford University.

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