The gambler’s fallacy is a concept known by many names—you might hear people refer to it as the gambler’s paradox, the Monte Carlo fallacy, or the fallacy of the maturity of chances.
Regardless of what you call it, it’s a misconception that likely impacts your online gaming habits. And not in a good way.
Learn more about the gambler’s fallacy and the fascinating ways in which it influences the psychology of casino gambling. We’ll also discuss its origins, provide examples, and share tips for avoiding this way of thinking so you can better manage your bankroll and make smarter choices at table games, slots, and everything in between.
More on the Gambler’s Fallacy
What is the Gambler’s Fallacy?
The gambler’s fallacy leads people to believe that when it comes to games of chance, they can use previous events to predict the next event.
As common as this bias is, it’s unfortunately based on unsound logic. You can’t accurately predict a future event based on past events if they’re truly randomized.
For instance, consider a coin toss. 10 “heads” in a row doesn’t make the next toss more likely to be “tails.” Even though we might think that tails has to come around eventually, the 11th toss has the same 50/50 chance of being tails as every other toss does.
Where Did the Gambler’s Fallacy Originate From?
One of the first accounts of the gambler’s fallacy dates back to 1820 when French mathematician Pierre Simon Marquis de Laplace published his “Philosophical Essay on Probabilities.” He wrote about soon-to-be fathers who strongly desired sons believing that every birth of a boy increased the likelihood of their next child being a girl.
Of course, these men who wanted to be boy dads didn’t have to worry if families around them were frequently having boys. These male babies had no effect on the sex of their own children.
Laplace also recalled how people were more eager to bet on a number in the French lottery when it had not been drawn for a long time, wrongly believing that this number would be more likely than other numbers to be drawn in the next round.
The first experiments that took place regarding the gambler’s fallacy were during the 1960s when researchers explored how the mind makes decisions based on probabilities. Subjects were asked to guess which of two colored lights would be the next to light up. After seeing a run of one color being lit up, researchers noticed that the subjects were much more likely to predict that the other color would come next.
What Causes the Gambler’s Fallacy?
The gambler’s fallacy stems from our tendency to (incorrectly) assume that a specific random event that has happened many times in the past will take place more or less often in the future.
But what makes us have this tendency in the first place? Let’s dive a little deeper into the “why” and explore some common causes of the gambler’s fallacy:
Aversion to Randomness
As humans, we often find randomness inherently difficult to process. We like predictability and order, so we tend to try to rationalize random events by creating explanations and finding patterns when they aren’t necessarily there.
This tendency likely had evolutionary advantages, but in today’s world, it just causes many gamblers to fall victim to the fallacy that the next live roulette ball HAS to land on red after having a streak of black.
The Law of Small Numbers
The law of small numbers is when we take small samples of information and apply it to represent the larger population from which it was drawn. Cognitive and mathematical psychologist Amos Tversky and psychologist and economist Daniel Kahneman have explained the thinking behind this belief as a “cognitive bias produced by a psychological heuristic called the representative heuristic.”
Essentially, this means that people judge probability based on events they have experienced before. Therefore, when an outcome of an event occurs consecutively, the brain automatically assumes the other event will appear next to balance out the probability.
A gambler may believe that three successful spins on a slot machine indicate that their winning streak will continue as it has. Alternatively, they might assume that a loss is coming next to even out their runs of successive wins. You will have heard of gamblers referring to their “winning streak” or “losing streak,” but the chances of wins and losses don’t change since the outcomes are truly random.
Casino Influence
Real money casinos are well aware of the gambler’s fallacy, and you’d be naïve to think they wouldn’t use it to their advantage. They might try to give gamblers a false sense of control by displaying the results of previous games. When you see that you’ve had a run of losses, it might encourage you to keep going in hopes of a win that will surely come soon.
Examples of the Gambler’s Fallacy
In this section, we look at examples of the gambler’s fallacy in more detail.
Coin Toss
If a player was offered the chance to bet on 11 coin flips in a row all ending on heads, the logical choice would be to not take that bet because the probability of it happening is extremely low.
However, if the 10 flips have already taken place and all landed on heads, the odds of the 11th flip being heads would remain at 50%. The fallacy occurs if you believe that 10 coins all ending on heads in a row would make it less likely for heads to happen again on the 11th time as each coin flip is completely independent of another.
Monte Carlo Fallacy
To study perhaps the most famous example of the gambler’s fallacy, we must do a little time traveling.
The term Monte Carlo fallacy originates from a succession of roulette wheel spins that took place at the Monte Carlo Casino on August 18, 1913. The roulette ball fell on black numbers 26 times in a row, which represented a hugely unlikely occurrence of around one in 66.6 million (assuming the mechanism was unbiased and there were no other influencing factors).
As the streak of black outcomes increased, gamblers wagered millions betting on red as they believed that the chances of the outcome being on the other color was more likely than the more the ball landing on black again. After 26 consecutive blacks, the roulette ball finally landed on red. The black streak had ended but not before staggering losses had been suffered by players who were betting more and more as the run increased.
The casino made a fortune from the run, and the incident became known as the Monte Carlo fallacy and a famous example of the gambler’s fallacy.
Retrospective Gambler’s Fallacy
Also known as the inverse gambler’s fallacy, the retrospective gambler’s fallacy constitutes the mistaken belief that a random event repeatedly occurs many times before a rare outcome occurs. For example, someone who sees a pair of dice landing on double 6s may assume that the person who rolled them has rolled several times already because the outcome is thought to be rare and unlikely to happen on the first roll.
In reality, you’re just as likely to roll a pair of 6s on the first roll as you would be on the 100th roll. In this case, the inverse gambler’s fallacy likely comes from the assumption that the roller may have rolled a pair of 6s because they had more opportunities to do so.
How to Overcome the Gambler’s Fallacy
To avoid succumbing to the gambler’s fallacy, you must first recognize that it is something that could come into your or someone else’s thinking when making gambling decisions.
However, research has shown that simply being aware of the gambler’s fallacy is not enough to avoid it. Overcoming this mistaken belief requires you to internalize the independence of different events by highlighting the fact that the events in question cannot affect one another.
If we take an example of two dice rolling and both landing on 6, the odds of this happening in a fair roll are one in 36 given the odds of one die landing on a 6 are one in six. The gambler’s fallacy could cause someone to believe that the odds of both dice landing on 6 again on the very next roll is lower than one in 36, but because each roll takes place in isolation with the odds not linked in any way, the chances of this happening remain one in 36.
The odds stay the same regardless of how many times we roll the dice because the dice do not remember what they landed on previously and have no way of influencing future rolls. Keeping these facts in mind can help you make smarter gambling decisions and prevent you from chasing your losses.
It may help to ask yourself or whoever you are trying to help avoid the fallacy exactly how the dice could influence the roll, which is beneficial as it will help you think through the process and question false beliefs.
Frequently Asked Questions About the Gambler’s Fallacy
In this section, we answer the most frequently asked questions about the gambler’s fallacy.
How do you avoid the gambler’s fallacy?
In addition to being aware of the gambler’s fallacy, you must make a conscious effort to understand that random events are separate and have no influence on future events. Sticking to logic and probability can help you keep gambling fun.
Is the gambler’s fallacy wrong?
Yes, the gambler’s fallacy is an erroneous belief that a past event can affect the outcome of a future event. For example, if a coin flip has landed on heads many times in a row, the gambler’s fallacy constitutes the incorrect belief that the next flip is more likely to end on tails (which it isn’t).
What’s an example of the gambler’s fallacy?
Consider this example of the gambler’s fallacy: A player goes on a winning streak at an online slots machine and assumes that they will continue to win. Conversely, the gambler’s fallacy could lead the slots player to assume that their next spin will be a loss since they’ve had so many wins in a row. Since past spins don’t affect future ones, both of these assumptions are false.
What is the gambler’s fallacy in real life?
While the gambler’s fallacy is relevant to online casino gambling, it can also be a logical flaw that people resort to in real life. For instance, parents with five girls might assume that it’s more likely that their next child will be a boy when the odds are actually 50/50.
