Good news: there is a sure-fire way to win the lottery.
Bad news: you will need to have £14m available.
To win the National Lottery here in the UK, you need to match 6 numbers from the draw of a possible 49.
There are about 14 million 6-number combinations between 1 and 49. At £1 per selection, and given that National Lottery organisers Camelot don’t do bulk-buy discounts, you’ll be looking at a £14m outlay, to guarantee yourself a £5m jackpot (give or take).
And of course, if someone else is lucky enough to have also picked the winning numbers, your jackpot is halved.
The Winning Paradox
This is what I call the Winning Paradox. Spending £14m to win £5m is clearly not a profitable approach.
Anyone who thinks about this for more than half-a-second can recognise that it is not a viable strategy. The upside does not get close to matching the downside.
In other words: even when you win, you lose. £5million in returns has cost you £14million in outlay. Ouch.
Poker Players and Sports Bettors Beware
Yet poker players and sports bettors fall for the Winning Paradox time after time. They chase draws without the correct odds, or back short-priced favourites at the bookies even when the risk/reward ratio is terrible.
The problem with this strategy lies in those two simple words that unfortunately a lot of the gambling community forget to consider: risk and reward.
Unfortunately, it is all-too-easy to lose your discipline. Backing short-odds favourites may lead to a lot of small wins, but that is of little use when the big loss comes in that wipes out all of your profits – and then some. The Winning Paradox in all its glory.
Or picture the poker player who can’t resist chasing gutshots when they are being offered 3:1 – even though the ‘correct’ odds for making this loose play are around 10:1.
Admittedly, the waters are muddied because, in poker and in sports betting, the feedback loop is misleading. It feels good when you win the hand (or the bet), so it is perfectly normal to attempt to replicate the success.
And because you are playing every hand and placing every bet in a batch of one (rather than in a batch of 14 million, as with the lottery example), the downside can be camouflaged. This is why discipline is the key.
When placing a wager or considering a call in poker, it is imperative that you ask yourself one simple question:
Is the juice worth the squeeze?
Do you always ensure that you are getting good value for your investment when playing poker or sports betting? Let me know in the comments, add me on Skype (search ‘casy151’), or follow me on Twitter.