My take on Gambling Systems

   The first rule of Gambling Systems is never buy a Gambling System. Trust me, I’ve spent hundreds, if not thousands, on systems and they have all been absolute tosh. The vast majority take the form of progressive Staking plans hidden amongst some over elaborate story. For example:

   “For 28 years I worked as the stable hand for Martin Pipe. Over that time I heard the whispers and was part of all the major coups. Now I am giving you my secrets as I can no longer get a bet at my local shops. When David Pipe sends out two horses in one race back the one with longer odds. If that doesn’t win then wait until the next time this occurs and double your bet. Statistics show you will go no longer than X races without a win”.

Progressive betting doesn’t work. The Martingale system doesn’t work.

ASIDE: A martingale is any of a class of betting strategies that originated from and were popular in 18th century France. The simplest of these strategies was designed for a game in which the gambler wins his stake if a coin comes up heads and loses it if the coin comes up tails. The strategy had the gambler double his bet after every loss, so that the first win would recover all previous losses plus win a profit equal to the original stake. The martingale strategy has been applied to roulette as well, as the probability of hitting either red or black is close to 50%.

   Since a gambler with infinite wealth will, almost surely, eventually flip heads, the martingale betting strategy was seen as a sure thing by those who advocated it. Of course, none of the gamblers in fact possessed infinite wealth, and the exponential growth of the bets would eventually bankrupt "unlucky" gamblers who chose to use the martingale. It is therefore a good example of a Taleb distribution – the gambler usually wins a small net reward, thus appearing to have a sound strategy. However, the gambler's expected value does indeed remain zero because the small probability that he will suffer a catastrophic loss exactly balances with his expected gain. The likelihood of catastrophic loss may not even be very small. The bet size rises exponentially. This, combined with the fact that strings of consecutive losses actually occur more often than common intuition suggests, can bankrupt a gambler quickly.

Casino betting limits eliminate the effectiveness of using the martingale strategy.

   So why have I mentioned something that doesn’t make money? You are not getting it are you? I am looking at this from the sellers point of view – not the mark’s point of view. Take a quick look at Ebay. Type “Betting System” into Ebay and select Completed Listings (200 to a page). You will see that Tens of Thousands has been spent on Betting Systems in the last couple of months. Do it yourself and see. Do you believe that the guys selling these systems are all ex-Jockeys who are in the know? The truth of the matter is that these are being sold by Internet Marketers. Guys in their bedroom, wearing a dressing gown, hunched over a laptop – guys just like us.

   To make money from this simply take a system (google to get free ones). Paper trade for a few weeks. Take the one showing the best profit and wrap it up within a story. For example say that your Grandad was an Equerry for the Queen Mother. He left you the system in his will or something like that. List on Ebay showing your results clearly.

   I would treat this business as a “cold shower”. In quickly and out quickly. Go for 5 x £5 profit sales on a certain system and then mothball it. I reckon you could do this 4 times a year and thereby make £100pa.