Gambling has always been linked to psychology as there have been studies on how taking risks on any gambling activities like sports betting could release a brain chemical called dopamine. This neurotransmitter makes a person feel happy. Some could also feel pleasure because of it and this is why gamblers are usually motivated to place more bets even after winning.
The more the brain gets dopamine, the higher tolerance it will have for it. Some studies suggest how dopamine could eventually cause people to have self-destructive behaviors. And this is what problematic gamblers or people with gambling addiction are dealing with.
Nowadays, gambling is becoming a less taboo subject and while some are still ashamed of having problematic gambling behaviors, some just find this a common occurrence and that seeking help should no longer be embarrassing. This is today when casino gaming and sports betting are so accessible.
Sites like TheTopBookies exist to allow people to assess whether they are looking to place their bets on reputable bookies that would help lessen the risks of gambling. There are now betting sites that look after their players by monitoring problematic behaviors.
Now, psychology surely plays an important role when understanding why people gamble and why some people are prone to having gambling problems. There are ways of thinking that usually get gamblers into trouble like the Gambler’s Fallacy and the Hot Hands Fallacy.
Gambler’s Fallacy
Also known as the Monte Carlo fallacy, the gambler’s fallacy isn’t exactly exclusive to gamblers. It’s more of a way of thinking. This is defined as an individual’s erroneous belief that the future event is predictable through the outcome of previous events.
In sports betting, the result of the bet is predictable if a gambler would go back to his or her records of previous bets. This way of thinking is incorrect because any future event cannot be solely the result of just past events.
This is called the Monte Carlo fallacy too because this behavior was first observed in a casino in Las Vegas in 1913. People with this way of thinking tend to misjudge how certain situations will pan out. When this was observed at the Monte Carlo casino, it was during a game of roulette. The wheel’s ball fell on a black spot several times in a row and as a result, the players think that the ball will land on red soon and this is what they bet on. However, it was only after 27 turns when the ball finally fell on a red block. Because of this, millions were lost by the players on the table.
In sports, it’s really hard to say the outcome of a match based on the previous performances alone of a team or an athlete. There will always be other factors to consider to at least have an idea of how a match will end. And so, sports bettors should never heavily rely on their betting history.
The Hot Hand Fallacy
There is a similarity between the gambler’s fallacy and the hot hand fallacy. The hot hand fallacy is also reliant on past events. It is defined as a belief that an individual is hot or cold depending on past performance. An example is how people tend to think that a slot machine is due for a win either because it hasn’t paid players out for so long or because it has already been hitting small wins for a few spins.
This is also applicable to any other activities outside gambling. It’s commonly seen in the field of investing as well. For sports bettors, it’s them having to feel like they should place more bets because they have been winning a lot recently. Sports punters should know that placing bets on every match in a tournament isn’t necessary. Bettors should always know when to turn their backs on certain odds and not just rely on their luck.
What if These Aren’t Fallacies?
A research was done about these two fallacies and how it affects the probability of people winning their bets. The research was headed by Professor of Psychology at University College of London Nigel Harvey and graduate student Juenim Xu.
Together, they analyzed a total of 565,915 sports bets from 776 sports punters. The data they collected were from different licensed online casinos and sportsbooks. What they found is that many of the bettors placed bets as if the gambler’s fallacy helped.
Based on the data that they collected, the winning percentage of all the bets was 48 percent. Bettors who won their first bet won their second bet 49 percent of the time. For the punters who lost their first bet, 53 percent of them also lost their next bet.
The punters who tried to bet for the third time after winning twice won 67 percent of the time. Meanwhile, 67 percent of those who already lost twice also lost their third bet. Until the fifth bet, they found that this was still the case.
And so, this might lead some people to think about how the gambler’s fallacy works. However, in reality, the ones with the winning streak tend to get more careful on their next bet. They are the ones who placed their bets more strategically on the safe side and that’s why their chance of success was higher.
Meanwhile, the ones with the losing streak have this thought that their luck would change on their next bet. They practically chase their losses and placed bets on riskier odds because of this. Overall, they are the best example of why both fallacies shouldn’t be part of a gambler’s mindset.