Are You Trying to Win Too Much Money?

I originally discussed this concept back in 2001, but twelve years later it remains just as relevant. I witness gamblers trying to win too much money every day. And it happens in all different forms of gambling. They make bets aimed at winning too large an amount, even though they’ve made it abundantly clear they would be satisfied with less. If you’re not clear what I mean, here are several examples.

Let’s say you have $50 burning a hole in your pocket. You find someone who is willing to flip a coin against you repeatedly. The only condition is that the stakes double with every flip. You flip with him for $50 and win, so now you have $100. You flip again for $100, call correctly, and double up to $200. You can keep going as long as you want. Do you risk $200 to try for $400? If you win that, do you risk $400 to win $800?

There is no correct answer. It’s a personal choice, dependent entirely on your preferences and circumstances. When you risked your initial $50, what was your ultimate goal? Did you want to double your money? Or were you willing to go against the odds and try for a bigger score? These are questions that you should have asked yourself before you started. But even if you didn’t, it shouldn’t matter. You can stop whenever you feel either satisfied with the amount you’ve won or uncomfortable risking your winnings (or both).

We don’t often get our gamble on by flipping coins, so let’s move to a more realistic setting, a sports book. With the NFL season in full swing, poker players have been known to place the (ahem) occasional football bet. Let’s say you take that same $50 and bet a six-team parlay. You’ll win $2,000 if you pick all six games correctly. You choose five games from Sunday afternoon, and then you include the Monday night Dolphins-Saints game as your sixth pick. Through some combination of handicapping genius and luck (mostly luck) you correctly pick all five Sunday games. Now all you need is for the Saints to cover the spread on Monday night, and you’ll win your parlay and $2,000.

If you let your ticket ride without making any further bets, you are in a very distinct minority. Almost everyone I have ever encountered in that situation will put some money on the Dolphins. Some people will even put $1,000 on them, locking up almost a $1,000 profit no matter who wins. Then the question becomes this: If that person was happy to win $1,000, which was clearly the case given his hedge bet on the Dolphins, then why did he bet a six-team parlay in the first place?

All he had to do was bet a five-team parlay, leave out the Monday night game, and he would already be a $1,000 winner. Furthermore, he wouldn’t be losing the juice he’s paying to hedge his bet. Betting both sides of the same game is a completely illogical thing to do, yet it’s done all the time, and it happens because the person did not realize his goal before he placed his initial wager. All it takes is to stop and think: “If I hit the first five games, am I going to let it all ride on the sixth game?” If the answer is, “no,” then your initial bet is a clear case of trying to win too much money.
Maybe you don’t bet sports. Do you play the lottery? Millions of people do. It is the most widespread form of gambling in the United States. And the most popular version is Pick Six, where $1 can win millions.

Just based on the “house” take and the taxes, no one in their right mind should ever play the lottery. But for the moment, let’s forget how awful a proposition the Pick Six lottery is. Let’s pretend that you’re getting a fair shake for your $1 and, if you pick all six numbers correctly, you’ll win $10 million tax free.

As you watch the drawing, the first five numbers come up, and by some miracle you picked them all correctly. Now let’s say you could suspend time before that decisive sixth ball was drawn. If someone offered you $200,000 for your ticket, which is almost your “expectation” at that point in time, would you take it?

I know I would. My guess is that most of you would too. We would not be willing to risk a guaranteed $200,000 to try for $10 million with the pick of a single lottery ball. That would take a level of gambling sickness that most people in this world do not have. But given that is the case, what is anyone doing playing Pick Six Lotto? Anyone who plays Pick Six, but would take the $200,000, is clearly trying to win too much, since they would be satisfied with a much smaller amount than the $10 million top prize.

Maybe you are the rare disciplined gambler. You don’t flip coins, bet sports, or play the lottery. You just play poker, and you pride yourself on being an intelligent gambler. The concept of trying to win too much money could easily still apply to you, especially if you play tournaments.

Almost everyone who plays tournaments focuses on the size of the buy-in, when more of the focus should really be on the size of the top payouts. Let’s say the buy-in is $200 and first place is $5,000. If you’d be happy with winning significantly less than 25 times your money, your chances of success are lower just from having that mentality. The reasons for that might not be immediately clear, but they’re worth taking the time to understand, so let’s talk about it some more next time. Hope to see you then. ♠

Matt Lessinger is the author of The Book of Bluffs: How to Bluff and Win at Poker, available everywhere. You can find Matt’s other articles at www.cardplayer.com.