From: "Ted White" <twhite8 at cox.net>
To: "WSFA members" <WSFAlist at keithlynch.net>
Subject: [WSFA] Re: math problem
Date: Sat, 8 Mar 2003 14:48:40 -0500
Reply-To: WSFA members <WSFAlist at keithlynch.net>

----- Original Message -----
From: <ronkean at juno.com>
To: <WSFAlist at keithlynch.net>
Sent: Saturday, March 08, 2003 3:18 AM
Subject: [WSFA] math problem

>
> Here is a math problem some may find interesting.  Or perhaps it is more
> of a logic problem than a math problem.
>
> Slot machines have been proposed for Maryland, and one of the objections
> to allowing slot machines is that players would lose money, which might
> result in finacial distress for some players, and their families.  Slot
> machines typically have a 'payout ratio' of about 85%, which means that
> on the average, 15% of each bet is lost, over the long run.  On any given
> day, some players win on net, and some lose, but in the aggregate 15% of
> the total money bet is lost (with an 85% payout ratio).
>
> It occurred to me to propose a possible solution to the problem of slot
> players losing inordinate amounts of money - the solution would be to
> make the slot machines have a 100% payout ratio.  To pay for the cost of
> operating the casino, and to provide a profit for the operators and
> revenue for the state, a set fee each day would be charged to players who
> enter the casino.  Someone pointed out to me, though, that many slot
> machine players are in the habit of playing until they lose nearly all of
> their money, that is, they tend not to quit when they are ahead.  For
> those players, it seems that more than half of them would lose nearly all
> of the money they had available to play with on a given day, or would be
> in a losing position at the time the casino closes that day.  Some of
> them would win for the day, in spite of themselves, if the casino
> happened to close at a time when they were ahead.
>
> So it seems, then, that there exists a 'losing strategy' for playing
> slots, the strategy being to play until all, or nearly all, of the
> available money is lost.  That strategy does not guarantee a loss ony
> given day, but it seems as though a player who follows that plan would
> lose money over the long run.  Assuming that the slot machines have a
> 100% payout ratio, it seems that if there is a losing strategy, there
> must conversely be a winning strategy, a strategy which, while it would
> not guarantee a net win on any given day, would yet be expected to yield
> net winnings over the long run.
>
> So, the question is, given a 100% payout ratio and the existence of a
> substantial perentage of players who on any given day persistently play
> until they have lost nearly all of their funds and then stop for the rest
> of the day, is there a winning strategy, and if so, what is it?

You're kidding, right?   The winning strategy is simply to quit while
ahead.

--Ted White