The Magic Economics of Gambling



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Animation by Josh Sherrington
Sound by Graham Haerther (
Thumbnail by Simon Buckmaster

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44 thoughts on “The Magic Economics of Gambling”

  1. But you DON’T get to play the 80% chance of $6.25 “infinite times”. That’s why your comparison is a bit absurd.

    06:10 Again, 0.5% chance of $1000 is NOT the same amount as 100% of $5, YOU DO NOT GET TO PLAY INFINITE TIMES.

  2. Your premise fails in the first minute. Gambling customers pay for entertainment value; I might pay to see a movie, I don’t expect the theater to give me 100% of my money back. Why would the casino give you all your money back after entertaining you?

  3. In my opinion casino gambling is a fraud. A slot machine is programmed to pay out after consuming hundreds or thousands of dollars. The only ones gambling are the bettors against eachother. Give it to charity and you'll get a nice warm glow. ☮️

  4. But insurance spreads the catastrophic risk among millions of policy holders. People are willing to lose a little (premiums) to avoid losing their homes, life savings, etc.

    Gamblers, on the other hand, are not investors. Science has shown that dopamine in addicted gamblers goes up when? Not when the outcome is revealed, or when the payoff is made. No. It shoots up when the bet is placed! THAT's what casinos are selling.

  5. By the way, do casino resort owners run their businesses like cruise shops or amusement parks (keep the customers inside their business long enough to drain their $$$)?

  6. It takes years of hard work to understand the game,you expect to go play with 1000 dollars and make 50k over a weekend nooo,just like going for degree at university to start earning,same to gambling,a winning mindset, discipline to overcome variance.

  7. Wait. Is your channel not related to the city of Wendover, NV? The city is famous for it's casinos and the Enola Gay began it's infamous flight to Hiroshima from there

  8. this video has errors
    there is no gamble where you have a 100% chance of getting a 105% return. If there was you could sit there and play over and over and within hours you would have many times your original bankroll. Dont confuse interest over time with gambling.

    Your statement that people at a casino are playing to get 97% return is also an error.
    the 97% return is not a guarantee – many people who gamble walk out with no return unless they win big, because they keep playing with the small return they get till they are out of cash.

    The thing you are missing is variance. If you play a roulette wheel and bet black or red, you will break even in the short run and go broke in the long run, but the most you can win on any bet is 2X. The best you can hope for is to put all your money on red and double it, and then leave. Like you said in the video, doubling your money is not a life changing event.

    But on a slot machine, with every spin you have a chance of winning nothing, 2X… 5X…10X…20X… 50X…100X… up to 1000 to 5000X of your bet.

    On a high value slot machine, like $10 or $25, the odds are in the long run your $1000 bank roll will return $970… but its the variance that makes it interesting to play.
    You could win $20,000 on one $25 spin
    or $5,000, or $1000, or $500…. or $50

    or you could play the entire $1000 and win nothing at all….

    That is the hook

    Can you win at a casino? Yes. You CAN put $25 in a slot machine and win $20,000 on one spin.
    just as you can walk out the door and be hit by lightning, hit by a truck, shot, eaten by sharks, struck down by cancer, catch a virus and die.

    Life is a less than zero sum game: you cant win, you cant break even, and you cant get out of the game – everyone dies in the end.

    At a casino you can win and you can get out of the game (take your winnings and walk out)….. but the odds are 3% in favor of the casino.

  9. We pay to use insurance. We use insurance and the price go up. So to keep the price low, we must not use insurance we paid for. Imagine paying for netflix but price increase everytime you watch a movie 🤔

  10. I'm sorry but this video is dumb. infinite is not a thing that applies to human lives, for instance, I need insurance because I don't have infinite time to get the money I would need if I get into an accident, the biggest problem is having all those money at once.

  11. Casinos "work" exactly like any fiat currency. THEY "PRINT" THE CHIPS. The percentage odds on all the games is the "interest." Like our currency system, there will always be losers so money constantly flows in. That's why casinos are constantly trying to find more players and the government/fed keep subsidizing population growth through welfare and tax exemptions.

  12. As a guy that knows these statistics I don't gamble, however my step dad goes to the casino from time to time for fun and 3 years in a row has won thousands more than he put in, somehow he keeps hitting large jackpots, the workers at the casino just shake their head and tell him he is not the norm. Long story short, it's ALMOST persuaded me to go there and be irrational to see what happens

  13. This is actually quite biased. Instead of focusing on how much people would win, you could also say "Would you rather have a 99.5% chance of winning nothing and a 0.5% chance of winning 1000 dollars or a 0% chance of not winning, in other words a 100% chance of winning $5."

  14. gambling is a sickness toward which some people are extremely fragile and irremediably fall for it. Kinda like crack. Don't try to find out for yourself if you can be a victim or not.

  15. Insurance are not gamblers. If they see increased costs in one year, they just increase insurance for their clients in the next year. Same like putting on red on roulette, over and over, until you win and get your money back. Insurance has the money to work almost indefinitely.

  16. Success depends on the actions or steps you take to achieve it. Show me a man with no investment and I'll tell you how long it takes to fail. The investment creates a safe haven for the future. With the right investment choi noce that has at least a minimum risk of 2% and with expert advice, both profits and interest are 100% guaranteed.

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