You are at the casino. The roulette wheel is spinning and the ball is bouncing. Bounce, bounce, bounce, you smile: “it’s red!” And then it bounces one more. No, it’s black! You lose everything again and go home with empty pockets.

Well, I hope you won’t — because you don’t go to casinos, you don’t buy scratch tickets, you don’t play the lottery or any gambling game in general.

Why? Because these games are designed to make you lose money.

And in this article I’ll tell you why. (Check out the podcast or video version of it, too!)

The house always wins. We all know this phrase. But this is more than a phrase. This is a simple, mathematically proven fact. And you’ll only have to know three statistical concepts to see why the house always wins.

These three statistical concepts come up often in data science projects, too. So if you are wondering why I’m talking about gambling on a data science channel, rest assured, you’ll be able to take advantage of this knowledge in your data science career, too.

Anyways, three statistical concepts.

These are:

• survivorship bias
• expected value
• and the hot-hand fallacy

Let’s start with the first one.

#bias #gambling #data-science #statistics #math