Are Streaks the Secret of Gambling Success?

Here's the enigma. The gurus say games are random so streaks don't occur; of course, some experts get no closer to the action than mathematical formulas or computer simulations... so what do they know, anyway? Conversely, solid citizens with floor time under their belts have experienced or observed that big bucks are made when machines or tables are hot, and bankrolls are decimated when they're cold; of course, few players harboring theories as to harbingers of streaks will go whole hog or withdraw completely on their forecasts... so how really confident are they, anyway?

These perspectives turn out to be less contradictory then they may seem. In fact, both are correct. The apparent discrepancies arise because the gurus are talking about the future while the bettors are discussing the past. And destiny looks radically different when viewed when foresight and hindsight.

How are the gurus right? The games are essentially random, results are governed by laws of chance rather than determinism, and successive decisions are unrelated to one another. No covert force or grand design creates streaks by imposing order on the chaos and no parapsychic vision anticipates them. Slot machines don't have hot or cold modes, conform to preordained patterns of wins and losses, or become "due" for payouts. Likewise at the tables, dice don't remember how or where they landed on previous rolls, cards don't assume a deliberate arrangement in the deck or shoe, and the ball doesn't bounce around until put into the appointed groove by the fickle finger of fate.

How are the players right? Random series of decisions may be dominated by wins or losses purely based on probabilities. Consider the simplest case. Flip three unbiased coins, betting the same amount on one side or the other each time. You'll experience a streak. There's a 25 percent chance you'll win - or lose - three out of three and a 75 percent chance it'll be two out of three. The hitch is that instances, lengths, and directions of the streaks won't be known until they're over.

Riding streaks to victory or defeat in the casino is therefore a matter of serendipity. I'll illustrate with two situations.

Ozzie wins two $10 blackjack hands in a row and thinks he's on a streak. He starts parlaying - $20, $40, $80, $160, $320 - winning the next five bets. At this point the shoe is completed so Ozzie quits. He picked up $640 in seven hands, $570 more than by flat betting, and is reinforced in believing that the secret of gambling is in anticipating and exploiting streaks.

Harriet wins two $10 blackjack hands in a row and thinks she's on a streak. She starts parlaying but loses on the fourth round. She breaks even for the four hands. Had she kept betting flat, she would have won $30 and lost $10 for a net gain of $20. However, Harriet's faith isn't shaken; the last four rounds just didn't happen to be a streak. So she keeps playing, forgetting about the inconsequential four hands because there's nothing to remember.

In the long run, table players who raise their bets, thinking they've hit a streak, can expect to average the same as those who ultimately risk the same total but never vary their wagers. And this average depends wholly on the house edge. During individual sessions, though, aggressive bettors tend toward the extremes - winning or losing more than their conservative counterparts. Similarly at the slots, players who think they're on a streak and continue after a few good hits have the same chance of surging further ahead, or losing ground, as they would by starting fresh.

Is catching a streak the key to casino conquest? No more or less than buying low and selling high is the essence of investing. Still, as the retrospective rhymer, Sumner A Ingmark, remarked:

Most gamblers trust in streaks because,
They misinterpret nature's laws.