14.03 Odds and Ends
14.03 Odds and Ends
14.03 Odds and Ends
Fair Bets
Fair bets are based on the odds. If you want to make a fair bet that a two will come up when you roll a fair die, you should bet $1
that you will get a two and your opponent should bet $5 that you won’t. If you both always bet these amounts, then over the long
run you will both tend to break even. Gamblers call such a bet an even-up proposition.
By contrast, if you were to bet $1 that you would roll a two and your opponent bets $6 that you won’t, then over the long haul you
will come out ahead. And if you bet $1 that you will roll a 2 and your opponent bets $4 that you won’t, then over the long haul you
will lose.
Organized gambling usually involves bets that are not even-up. A casino could not pay its operating expenses, much less turn a
profit, if it made evenup bets. The house takes a percentage, which means paying winners less than the actual odds would require.
The same is true for insurance premiums. It is also true for state lotteries, which in fact offer far worse odds than most casinos. If
you gamble in such settings long enough, you are virtually certain to lose more than you win. Of course, if you enjoy gambling
enough, you may be willing to accept reasonable losses as the price of getting to gamble.
Example: Roulette
Roulette is a gambling game in which a wheel is spun in one direction and a ball is thrown around the rim into the wheel in the
opposite direction A roulette wheel has many compartments, and players bet on which compartment the ball will land in. In the
U.S., roulette wheels have thirty-eight compartments. They are numbered from 1 through 36; there is also a thirty-seventh
compartment numbered 0 and a thirty-eighth numbered 00.
There are various bets players can place, but here we will focus on the simplest one, where a player bets that the ball will land on
one specific number (say 14), from 1 through 36. Although the game can be complex, the following discussion gives the basic
points.
Since there are thirty-eight compartments on the wheel, the probability that the ball will land on any given number, say 14, is 1/38;
Pr(14) = 1/38. Hence, the true odds against rolling a 14 are 37 to 1. If you played the game over and over, betting at these odds, you
would break even. You would win once every thirty-eight times, and the casino (the “house” or “the bank”) would win the other
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thirty-seven times. But when you did win, they would pay you $37, which would exactly compensate you for the thirty-seven times
that you lost $1 (37x $1 = $37). We say that your bet has an expected value $0.0.
But of course, the house does not pay off at the true odds of 37 to 1. Instead, the house odds or betting odds against rolling a 14 are
35 to 1 (the house has the advantage of the 0 and 00). When you lose, this doesn’t make any difference. But when you win you get
only $36 (the $35 plus the original $1 that you bet). This is $2 less than you would get if you were paid off at the true odds of 1 to
37. Since the house keeps $2 out of every $38 that would be paid out at the true odds, their percentage is 2/38, or 5.26%. All but
one of the bets you can make at roulette costs you 5.26% over the long haul (the remaining bet is even worse, from the player’s
point of view).
If you play just a few times, you may well win. Indeed, a few people will win over a reasonably long run. But the basic fact is that
your bet on 14 has a negative expected payoff of -5.26%. This means that over the long run you will almost certainly lose at
roulette. The odds are against you, and there are no systems or strategies or tricks that can change this basic fact. Simply put, there
is absolutely no way you can expect to win at this game. There are a few highly skilled people who make a living playing poker,
blackjack, or betting on the horses. But no one can make a living playing casino games like keno, craps, or roulette.
In each case, explain which rules are relevant to the problem. Your analysis of the problem is more important than the exact
number you come up with.
1. You are going to roll a single die. What is the probability of rolling a two or an odd number?
1. You are asked about the probability of a disjunction; What is Pr(T or O)?
2. Are the two disjuncts incompatible?
3. Yes. So, we can use the simple disjunction rule (R4).
4. It says that Pr(T or O) = Pr(T) + Pr(O).
5. And Pr(T) + Pr(O) = 1/6 + 3/6 = 4/6 (= 2/3).
2. You are going to draw a single card from a full deck. What is the probability of getting either a spade or a three?
1. You are asked about the probability of a disjunction; What is Pr(S or T)?
2. Are the two disjuncts incompatible?
3. No. They overlap because of the three of spades.
4. So we must use the more complex disjunction rule (R6), in which we subtract out the overlap.
5. It says that Pr(S or T) = Pr(S) + Pr(T) - Pr(T & S).
6. Pr(T & S) is just the probability of drawing the three of spades, which is 1/52.
7. So Pr(S or T) = Pr(S) + Pr(T) - Pr(T & S) = (13/52 + 4/52) - 1/52.
3. You are going to draw two cards from a full deck without replacing the first card. What is the probability of getting exactly
one king and exactly one queen (the order doesn’t matter)?
1. You are asked about Pr(K & Q), where order doesn’t matter.
2. There are two different ways for this to occur:
a. King on first draw and queen on second: (K1 & Q2)
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b. Queen on first draw and king on second: (Q1 & K2)
3. So we must calculate the probability of a disjunction: What is Pr[(K1 & Q2) or (Q1 & K2)]?
4. The two disjuncts are incompatible, so we use the simple disjunction rule (R4).
5. But each disjunct is itself a conjunction, and the conjuncts of each conjunction are not independent.
6. First disjunct is: Pr(K1 & Q2). The general rule (R8) for conjunctions tells us that Pr(K1 & Q2) = Pr(K1) x Pr(Q2|K1),
which is 4/52 x 4/51.
7. Second disjunct is: Pr(Q1 & K2). It works the same way: Pr(Q1 & K2) = Pr(Q1) x Pr(K2 |Q1), which is also 4/52 x 4/51.
8. Now add the probabilities for each disjunct: (4/52 x 4/51) + (4/52 x 4/51).
This page titled 14.3: Odds and Ends is shared under a CC BY-NC 4.0 license and was authored, remixed, and/or curated by Jason Southworth &
Chris Swoyer via source content that was edited to the style and standards of the LibreTexts platform; a detailed edit history is available upon
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