The Little Blue Book

THE MATHEMATICS OF ‘THE POKIES’ & why the player will always lose… 83 Let’s spend a moment with the mathematics of poker machines. In all Australian states, ‘pokies’ are regulated; they are required to return to the player (depending upon the jurisdiction) between 80-90% of money wagered. Sounds ok. “Spend a dollar, few losses, few wins, get 80 cents back – cheap entertainment!” But that’s not how it works in practice. Here is how the mathematics works. Let’s pretend I say to you: “Give me a dollar and I’ll return 80%.” So, you give me the dollar, press these buttons for a while, couple of small wins – falling coins, bright lights, a bit of jingling muzak – and, here it is, I return 80% back to you... that’s 80cents. But wait a minute, we haven’t finished yet. Because then I say, “Now give me the 80cents I just gave back, and I’ll return 80%, no problem. Thanks… (more lights, more muzak)… now then, here’s your 80% back, that’s 64cents.” And so it goes (until there is nothing left). (1) Monash Alfred Psychiatry Research Centre, Kulkarni Prof. J., Director; www.smh.com.au ; Gambling Linked to One-in-five Suicidal Patients (2) Victorian Department of Justice; A study of gambling in Victoria – problem gambling from a public health perspective, 2009 (3) Risk and Protective Factors and Comorbidities in Problem Gambling, Thomas S.A., Jackson A.C.; Report to beyondblue, Monash University and the University of Melbourne 2008 (4) University of Iowa; Black Prof. D.W., 2014; www.now.uiowa.edu ; Pathological Gambling Runs in Families (5) www.scientificamerican.com/article/how-the-brain-gets-addicted-to-gambling (6) Taking chances: Problem gamblers and mental health disorders; Cunningham–Williams, R.M., Cottler, L.B., et al; American Journal of Public Health, 1998 This is the mathematics of a poker machine, and why the player will always – eventually – lose. Unlike some forms of gambling – like horse-racing, professional poker, sports betting – poker machines allow the player no influence over the wager, the risk, nor the outcome. (Arguably, ‘scatchies’ and lotto fall into the same category.) A player can bring nothing to a poker machine other than their money and their willingness to lose it. And the mathematics of ‘the game’ are designed to ensure the machine wins. That’s why they are so profitable. 83 ADA Australia PostScript Section 2 Section 1 Section 3