Today's Gambling Myth: The Monte Carlo Fallacy
It’s called a number of things. The “gambler’s fallacy,” and the “Monte Carlo fallacy,” and even “the fallacy of the maturity of chances.” It all boils down to one basic, misguided belief: In games of chance, like roulette or craps, if a certain outcome hasn’t happened in awhile, it’s more likely to occur in the future.
Seriously, black has hit, like, six times in a row. Has to be red next. Definitely.
But here’s why it’s a myth: Every roll of the dice, and every spin at roulette, is its own thing. You’ve probably even heard the expression, “The dice have no memory.” As in life, just because something has happened a lot in the past doesn’t mean it’s more or less likely to happen in the future. There’s really no such thing as a certain outcome being “overdue.” The odds remain the same, no matter what’s transpired during a previous roll or spin. And not surprisingly, those odds always favor the house.
More than a few players have been stung by the Monte Carlo fallacy. (It’s called that because one of the most famous examples of this concept took place at a Monte Carlo casino in 1913. Monte Carlo is in Monaco, and it’s a lot like Las Vegas, just yawnier.)
Think your number or color has to hit soon? The longest recorded streak of one color in roulette in American casino history happened in 1943 when the color red won 32 consecutive times. In a row. The people convinced black had to hit next were absolutely right. Eventually.
Does knowing about the gambler’s fallacy mean you can’t play your hunches or try to outguess your favorite game? Of course not. People win fortunes because of lucky streaks that defy the odds (just ask the woman who had a craps roll for four hours and 18 minutes at Borgata in Atlantic City). But do yourself a favor and know the odds you’re up against (they vary greatly depending upon the game), and don’t fall into the “double up to catch up” trap.
As they say in the financial world: “Past performance is not a guarantee of future results.”