Decision-making processes are paramount – gambling and critical thinking

ReferLocal certificates usable for food within Mohegan Sun at Pocono Downs
ReferLocal certificates usable for food within Mohegan Sun at Pocono Downs

Critical thinking about gambling highlights the conclusion that decision-making processes, rather than results, are paramount. Critical thinkers — whether considering gambling, everyday decisions, or supernatural claims — should not focus on results on decisions, but rather the thought processes informing whether decisions are informed or not.

In recent months, I became very interested in gambling, specifically playing Jacks or Better video poker following amazing promotions offered by a website — ReferLocal.com — which typically charges $25 for printable vouchers which translate into $25 in free slot or video poker play and $25 in food at Mohegan Sun at Pocono Downs. Initially, without much knowledge of gambling or video poker, I thought these promotions were fabulous deals because — if I broke even or even received most of my money back — I could have entertainment and food at a very low price.

When I became more serious about gambling, thanks to these ReferLocal.com promotions, I started to learn more about gambling through careful research, reading, and listening to podcast episodes hosted by professional gamblers. Nearing the end of 2013, according to my records, I experienced a net loss of $200 — including tips — to gain hundreds of dollars in food and drink and entertainment through collaboration with friends, buying certificates of my own and gifting certificates – bankrolling others and incurring losses and wins through money out of my own bank account. I receive a near 97% of the expected return of my investment from video poker play and consider the food, drink, and entertainment to be well worth more than the 3% of my investment lost from play.

I discovered that many of my assumptions about gambling and video poker were incorrect following careful study. I also learned a great deal of new information which I applied to my arsenal of critical thinking tools. Perhaps the most important lesson I learned through my study of video poker and gambling is that short-term results and results in general do not matter as much as the thought processes which inform whether a [gambling] decision was a good decision.

Many novice gamblers, and people who do not know much about gambling in general, love to talk about short-term results and have many superstitious beliefs about gambling. Slot players in particular, from my experiences, talk about how they experienced ‘winning sessions’ or otherwise profited from gambling in the short term (and also often fail to remember or talk about their significant loses). Lottery players talk about how their play earned them a small jackpot and — because of this — they made a good decision…while they fail to realize that lottery play is among the worst form of gambling because the expected return is an abyssmal 50% of their investment (players can expect to lose half of their spent money in the long-term).

Family members, for instance, tell me about their ‘luck’ at slots and how certain machines are ‘lucky.’ Play a machine that ‘has not been hitting for a while’ some say. Others tell me that machines can be ‘hot’ and that I should play those machines. Some tell me that I should increase bet size when machines are ‘cold’ and others tell me to increase bet size when machines are ‘hot.’ Some believe that casino staff have control over computers in machines and, exercising this control, ‘pull a lever’ when a casino is busy – allowing someone to experience a jackpot and inspire others to play. These flawed beliefs are a dime a dozen, nothing any genuinely informed gambler would endorse.20130822_182540

Novice gamblers focus on the result of gambling, but fail to investigate or otherwise think about whether their gambling decisions were good gambling decisions. Short-term results will not helpfully determine whether slot play* — or really any form of gambling — is intelligent because gambling has its rises and falls; players will often, given a large enough sample size, experience positive and negative results.

Looking at one ‘blip’ is simply not enough to determine whether a gambling decision was a good one. After all, someone can sit down and hit a jackpot after five minutes of play while another person can, after a five minute session, lose their entire wager. Someone can make an informed gambling decision and experience extremely poor results in a short session of play.

If results of short-term gambling cannot determine whether a gambling decision was informed, what can? Some think that the casino always has an edge and that, by their design, would never allow players to come out ahead in the long-term…but this is false. Players who are relatively intelligent, have decent mathematical aptitude (or access to reliable information put forth by those who do), patient, not impulsive, and are willing to invest a sizable portion of money to form a suitable bankroll can profit in the long term — or at the very least play with a positive expected theoretical return — from gambling.

For instance, the South Point casino in Las Vegas regularly offers .3% cashback on coin-in – money put through a video poker machine. On certain days of the year, typically holidays, the casino offers ‘double point days’ which translate to .6% cashback. Playing a Jacks of Better ‘full pay’ machine with optimal strategy and no errors — without any promotions, cashback, etc. — offers a theoretical return of 99.54% of coin-in. Double point days, then, give players an edge of .14%.

Perfect play with a .14% edge won’t necessarily lead to great profit in the short-term, but, over a long period of play, ‘ups and downs’ will eventually ‘average’ and consistent gain will be had. In a five hour session, a player with an edge of .14% — utilizing perfect play with no errors — may walk away with a net loss of $500 while a slot player, playing with a return of approximately 85% of their investment , may walk away with a net gain of $500. Novices will say — looking at results — that the slot player made a good decision while the video poker player made a poor decision – failing to analyze the thought process which lead to the gambling decision including theoretical return and the fact that players, in the short-term, will experience ‘ups and downs.’

Following smart gambling decisions which result in either short-term losses and wins, friends are happy when I win and doubt my decisions when I experience short-term loses. People typically focus on the result while I — regardless of the result — maintain that the result doesn’t matter because the thought process and the expected theoretical return is what really matters.

It may be psychologically difficult to be stoic when walking away ahead or behind following a short-term gambling session, but it is the rational way to behave. Gamblers who make informed decisions — and those who do not — will simply experience short-term wins and loses. I will be content with losing $30 or even $300 in a short-term session provided I made an informed decision about gambling which allowed me to have a positive edge over a casino with a sufficient bankroll.

What, then, is the link between gambling and skepticism when thinking about decision-making processes and results?

In recent years, I have participated in numerous conversations with believers in many flavors of supernatural and paranormal claims — gods, afterlifes, reincarnation — who make appeals to results – that if people believe certain gods exist, supernatural beliefs are justified, or adhere to certain supernaturally-informed religious teachings the world would be a better place. People tell me that their religious traditions have made them better people and that religious teachings inspire them to do good [while often ignoring the harm religious belief can lead to]. Why not just believe when belief in a certain god and a certain religious tradition can result in Heaven while disbelief can result in eternal torment, they say.

en.wikipedia.org
en.wikipedia.org

I am not very interested in these types of discussions because they miss the point. I am interested not in whether a belief is useful or produces particular results, but rather am interested in the thought process which leads to a belief.

How does a person come to believe what he or she believes? What is the thought process which results in belief? Is the way be which we come to justified true belief reliable? Coherent? Internally consistent? Immune to rational inquiry or examination?

Supernatural beliefs and poor gambling gambling decisions might lead to great results in the short-term, but at the same time the thought processes informing such beliefs and decisions might be based on a faulty foundation. The thought processes, not the results, are what counts.

As always, feel free to comment below and consider listening to my Brave Hero Radio conversation with Karla Porter on the topic of advantage gambling for more information.

*Slot play with an estimated 85% expected return of investment is almost always a bad bet, but certain circumstances can make slot play allow for an edge over casinos. Consider a promotion, for instance, which offers players 100% of their losses up to a certain sizable amount in weekly installments of free play [a recent promotion in New Jersey actually offered this]. Going into this promotion playing slot machines which offered very large jackpots in proportion to wager size, in this circumstance, was a great way to take advantage of this promotion because of a possible large reward which was not paired with significant risk; players can make very high wagers and hope for a jackpot, cashing out if they experience a sizable positive return in the short-term or coming back to play, making most of their money back. The risk was very much worth it although the casino allegedly did not offer many players a fair shake – deactivating players’ cards, accusing honest players of cheating, etc.