Not fmailiar with the concept of expected value? You can read the long version here, but the short version of this concept goes as such: Expected Value (often abbreviated to EV) is a number that expresses your expected return over the long run for a given individual gambling situation.
Expected value is important as a concept because it can help gamblers make better decisions about the games they play – and, perhaps more importantly, the games they avoid. Let’s talk a bit more about the common expected value for a variety of popular gambling games to help illustrate this concept further.
Expected Value of the Lottery
Quite poor. It’s hard to put a firm number on this because the probability of winning varies from lottery to lottery, but it’s not uncommon for a state-run lottery to pay out only about half of the money that comes in through sales. You can find the payouts for any lottery online (any legitimate lottery, anyhow) and do the math yourself for individual lottos, but we’ll stick with a 50% payout for our example.
In very simple terms, your EV for every dollar spent playing the lotto is negative .50 – or, to put it differently, you would expect to lose .50 for every dollar you spent playing the lotto. Think of it this way: If you bought every possible ticket every drawing, you would get back the 50% that the lotto pays out – or a negative 50% return on your investment.
If you’re just dying to know the state payouts for lottos in the US, this handy table offers some (slightly outdated) insights into historical data.
Expected Value of Table Games
Table games are quite popular in live and online casinos, and it’s not hard to see why. They’re exciting, social and have some of the best payouts of any game on the casino floor. A good blackjack player can reduce the house edge to under 1% – meaning that they would have a much better EV than the typical lotto player for their gambling dollar. Roulette and craps players can approach similar returns with smart betting, and even the games with worse odds for players such as Let it Ride can be reduced to a reasonable disadvantage with proper strategy.
Expected Value of Slots
This is one of the easiest EV calculations you’ll ever do in your life. Almost every casino is required by law to post their slot payout percentages. You’d be surprised by how much variance you’ll find from one casino to the next. If the payout is typical, you’ll be looking at something in the 90% range, meaning that you’ll be expecting to lose about .10 for every dollar you wager.
That concludes our quick and dirty tour through the world of Expected Value. Learn more of the hardcore math if you like, or just take away these basics that will easily help improve the decisions you make with your gambling bankroll.