How Gambling Works

Many people gamble without any real understanding of how gambling actually works.

Do you know what ‘odds' and ‘house edge' mean? What about ‘average return to player'? When you gamble, are you playing a skill based game or is it all down to chance – and does it matter? What are your real chances of winning? Can you separate fact from fiction amongst the many myths surrounding gambling? Before you decide to gamble it is a good idea to know how gambling works so there are no hidden surprises.

What is gambling?

Gambling is taking part in a game during which you risk money, or something of monetary value, in order to win money or a prize. The outcome of the game is usually down to chance, so when gambling you might leave with less money than you started off with, and sometimes with nothing at all.

There are many forms of gambling, including lotteries and scratchcards, card games like poker and blackjack, betting on sports or events, playing casino games, gambling machines or bingo. Many people enjoy gambling, whether having a flutter on the Grand National or buying the odd scratchcard, or taking part in gambling on a more regular basis. Gambling is not a bad thing, but it can be risky, so we need to keep ourselves informed and make responsible choices.

What are the odds?

Probability is the likelihood of a specific outcome or event taking place. To work this out, you divide the number of specific outcomes with the number of possible outcomes.

For example, if you were rolling a dice and wanted the number three to come up, there is only one specific outcome; at the same time, there are six possible outcomes because the dice could land on one, two, three, four, five or six. So the probability of you rolling a three is 1 in 6.

Randomness

Randomness means that each possible outcome has the same chance, or probability, of occurring.

For example:

• When you roll a dice, the probability of rolling a two is the same as the probability of rolling a six, which is the same probability of rolling any of the other numbers. So you could say that the chance of rolling a specific number is one in six.
• When you flip a coin, the probability of it landing on heads is the same as the probability of it landing on tails, so you could say that it has a 50% chance or it's 50/50.

The reason each outcome is as likely as all of the others is that it all depends on chance. If a flipped coin landed on heads several times in a row, it's easy to think that it has to come up tails on the next flip. However, the coin doesn't "remember” what it has landed on before in the same way that it doesn't "decide” what to land on next. No matter what has happened already, the probability of it landing on heads or tails is always 50/50. Unless you can see the future, the result of a rolled dice or flipped coin is unknown and unpredictable, so we can say that the outcome is random.

Remember: despite what you might think, you can't work out or control an outcome that's based on chance and randomness – people who try to do this often lose a lot of money. They might win now and then, but this is also down to chance. Thinking that you can beat the system can cause
big problems.

Odds and House Edge

In gambling, the "odds" are the chances a person has of winning a bet, but these always work against that person.

The "house" refers to the people who offer the bet (the casino, bookmaker, slot machine owner etc.) and they always have the "edge". This means that the designers of the machine or game make sure that it works in their favour and they will always make money overall.

In every betting game, the odds are against the player. Every person who hits the jackpot on a slot machine is actually winning money that previous players lost. Sadly, the longer you gamble, the more likely it is that you will lose money, because the odds are against you. Many problem gamblers have the false belief that they will be able to "beat the system" but over time they'll lose money, probably an awful lot of it.

The odds of winning the National Lottery jackpot are about 1 in 14 million. Think of it like this: your friend Dave lives somewhere in London and you want to call him at home but don't have his number. If you try reaching him by dialling one of 12.5 million London phone numbers, your odds of getting his number right on the first try are better than the odds of winning the lottery jackpot.

Skill or Chance?

Some forms of gambling are down to chance, and some may involve some skill. Here are some examples:

Chance:

• Lottery, Euromillions etc
• Scratchcards
• Bingo
• Roulette
• Slot machines

Skill (at least partially):

• Blackjack
• Poker

• Sports betting

Return to Player

Return to Player (RTP) is the term that gambling businesses use to describe the percentage of all the wagered money that a gambling machine or game will pay out over time. RTP is calculated over the long term, rather than being a calculation of short term (e.g. session, daily or even weekly) payout. In the short term, the outcome may be vastly different, so you should only ever bet with money you're prepared to lose.