PLAYING IT SMART by ALAN KRIGMAN

What Determines whether your Gambling Decisions are Good or Bad?

Decision-making is at the heart of gambling. At least in principle, solid citizens who make good decisions should do better than the bezonians who make poor choices. If not game-by-game, then on a session, visit, or lifetime basis.

But, what are the criteria for good and bad decisions? You can't simply trace back from success and say the choices made along the way were "right," or from failure and label them "wrong." While this would support the notion of learning from experience, it would also falsely honor hindsight over foresight.

One key to good decisions is awareness of the information available about a situation and the ability to make the best possible use of it. In gambling, this information tends to be of a statistical nature. And it varies with the games played.

Some gambling choices represent statistically indistinguishable options. The outcome of a coup may differ depending on a person's decisions, but the effect is pure chance. For instance, consider a slot player selecting a machine. Or, perhaps unconsciously, deciding when to press the "spin" button. Pretend such an individual hits a million dollar jackpot. The same result would not have occurred had he or she grabbed the next seat over. Or touched the button a tiny fraction of a second sooner or later on any spin during the session. But the player didn't affect the jackpot in any cause-and-effect way.

In other circumstances, available information may help gamblers make the best possible selection among games. Video poker affords an illustration. Proficient players know that, other payouts being equal, machines returning 9-for-1 on full houses and 6-for-1 on flushes have higher payback percentages than those with lower returns on these hands. So, when the opportunity arises, a "9-6" machine is a better up-front choice than an "8-5" device.

Further, certain games offer players choices that influence the outcome of particular coups. Take blackjack. A total of 11 against a 10 has a greater chance of losing but an "expectation" of earning more, on the average, when doubled than hit. If a player's goal is the greatest profit during a session for given size bets, doubling is the decision that makes best use of the available information. Were the goal to be maximum likelihood of winning the round in question, hitting would be a superior use of the information. This, regardless of how the round turns out.

Another element of good decisions is a rational appraisal of risks and the associated costs and benefits. How much do you wager on any given round, what's the probability you'll lose it, and what are your chances of winning various amounts? More, how big a stake are you willing to concede in a session, what profit will satisfy you enough to quit, and what's the likelihood you'll get to one or the other level?

It's sensible to consider these factors and make the associated decisions before a game begins, ideally before leaving home. They're also relevant during the thick of the action.

As a case in point, say you fell behind in a game like blackjack where, if you get into a hole, you have to dig yourself out by winning mostly even-money bets one round at a time. Make believe this happens. And after being down by more than you like, you return to break-even. You can declare a moral victory and quit, never knowing whether the alternate decision might have started you on a path culminating in ecstasy or agony. Or, now that the butterflies in your stomach are resting, do you keep playing?

If you keep going and finish ahead, you may think you made a good decision. If behind, a bad decision. In fact, it isn't the outcome that determines whether the decision was good or bad, it was whether or not you made a rational assessment of the risks, the ecstasy of success, and the agony of failure. As the poet, Sumner A Ingmark, wrote:

Though you have no data, decisions still matter,
'Cause risk and reward should not be ignored.

(c) 2006, ICON/Information Concepts Inc

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