# 34. Statistical manipulation - the Gambler's fallacy ## 34.1. Definition The gambler's fallacy is the mistaken notion that the odds for something with a fixed probability increase or decrease depending upon recent occurrences. This invalid concept is used in all kinds of ways by manipulators both in gambling and investment circles to persuade a victim to "stay at the table" because their "luck is bound to change". The underlying notion of the gambler's fallacy works as follows: You might think that you can beat the odds by either selecting numbers that have not been chosen in recent draws, or by selecting numbers that have come up more frequently than expected in recent draws. In either case, you are committing the gambler's fallacy. The fact of the matter is that the odds are always the same, no matter what numbers have been selected in the past and how frequently they were drawn. This fallacy is commonly committed by gamblers who, for instance, bet on red at roulette when black has come up three times in a row. The odds of black coming up next are the same regardless of what colours have come up in previous turns. The gambler's fallacy has led to some bizarre behaviour like people blowing on the dice before throwing them or even talking to them in an attempt to influence the outcome. Obviously such rituals are based on some kind of misplaced, optimistic belief in the powers of magic, but they don't alter the rules of probability at all. However, this basic and widespread misunderstanding means that gamblers are an easy target for the professional manipulator in both gambling and commercial circles. The gambler's fallacy is not confined to gamblers: there is a general tendency to think that future probabilities are altered by past events, when in reality they are unchanged. For instance, an investor may argue, "I have made 10 bad investment decisions already therefore my luck is bound to change soon". It is a comforting idea, but it is absolute nonsense. ## 34.2 Persistence Long. Potentially gamblers can be induced to continue playing indefinitely. ## 34.3. Accessibility High. Most people will fall for this. ## 34.4. Conditions/Opportunity/Effectiveness A general misunderstanding of statistical probability makes this a popular and easy- to- use vehicle for the manipulator. The fallacy is also very effective and self-reinforcing: when a victim fails to win again, they simply conclude that "next time they really just have to win" because their luck "just has to turn". If a victim does win, then that simply validates their belief in watching the table for a while before betting. The fallacy is so strongly felt by the victim, that regardless of the facts, everything that happens to the victim just validates their mistaken belief. ## 34.5. Methodology/Refinements/Sub-species The phenomenon is also known as the "Monte Carlo fallacy", or the "Fallacy of the maturity of chances". There are no known sub-species. ## 34.6. Avoidance and Counteraction The only way to avoid this manipulation is to read and understand a couple of chapters on probability before wasting money on gambling. All gambling operations are designed to take money from the majority of players in order to pay out to a small number of big winners and of course the gambling operator. Lotteries, including government run lotteries, work on this basis as well. They are really no better than state-legalised pyramid schemes, designed for the benefit of a few big winners, using the total "investment" of the millions of losers. As Kevin McKenna, the conservative journalist observed: "The most common dream of every "Bullingdon Tory" is the national lottery. And what a jolly wheeze it is: get the poor to fund our biggest capital projects in exchange for a cruel fairy story. (Sic)" If one does happen to make a small gamble and also win - well then take your winnings, be happy, and never gamble again.