Gambling

• Lottery numbers - How random are lottery numbers? Do certain numbers in certain states come up more often than would be expected by chance? Can you predict which lotto combinations are typically underbet, meaning that they minimize the likelihood that you must share the pot with someone else if you win. How large must pool size grow in a given progressive lottery to yield a positive expected value for each ticket bought?  

  Plenty of lottery records are available on the WWW if you look hard enough. Check out http://www.lottonet.com/ for several year's historical data for several state lotteries. Minnesota does a particularly good job making its historical numbers available at http://www.lottery.state.mn.us.

• Horse Racing - Many of the ideas employed in our jai-alai system are directly applicable to horse racing. How can you take a horses record and compute a measure of how fast it will run on a particular track in the given weather conditions? How will the other bettors price the respective horses in a race? Is there a betting strategy which will offer you positive returns?  

  The Daily Racing Form, available at http://racingform.com, has the schedules and results for every track in the country. Schedules and results from such New York traces including Aqueduct and Belmont Park are available from http://www.nyra.com/.

• Blackjack - Write a Monte Carlo simulation of a card counting strategy in Blackjack. Thorp's book is the grand daddy of all such schemes, but dozens of other strategies are available in books or on the WWW. Which one is best? For each strategy, what are the expected winnings per hand, as a function of the number of decks employed by the casino?      

  Develop and simulate a card counting strategies for other card games, such as gin rummy or poker variations where cards are publicly discarded. What impact does memorizing the discards have on your ability to predict the odds of getting the card that you want?

• Bidding strategies on Ebay - Ebay (www.ebay.com) is an Internet phenomenon, a giant on-line auction house that lets just about anybody auction just about anything (they draw the line at organs and other body parts). Successful bidding requires considerable strategy. When do you raise a bid, and by how much?   

  Ebay is an excellent resource to study auction strategies, since the bidding history is available, giving the name, bid amount, and time for each bid on every completed auction. How often does making a big presumptive bid knock everyone else out of the game? Does it pay to be the first one to make a bid? Are the rules different for expensive and inexpensive items?

I hope you have enjoyed this excerpt from Calculated Bets: Computers, Gambling, and Mathematical Modeling to Win!, by Steven Skiena, copublished by Cambridge University Press and the Mathematical Association of America. This is a book about a gambling system that works. It tells the story of how the author used computer simulation and mathematical modeling techniques to predict the outcome of jai-alai matches and bet on them successfully -- increasing his initial stake by over 500% in one year! His method can work for anyone: at the end of the book he tells the best way to watch jai-alai, and how to bet on it. With humor and enthusiasm, Skiena details a life-long fascination with the computer prediction of sporting events. Along the way, he discusses other gambling systems, both successful and unsuccessful, for such games as lotto, roulette, blackjack, and the stock market. Indeed, he shows how his jai-alai system functions just like a miniature stock trading system. Do you want to learn about program trading systems, the future of Internet gambling, and the real reason brokerage houses don't offer mutual funds that invest at racetracks and frontons? How mathematical models are used in political polling? The difference between correlation and causation? If you are curious about gambling and mathematics, odds are this is the book for you! This book is available in both hardcover and paperback.