We’ve heard it all before–gambling is just for fun, don’t chase your losses, decide how much you’re willing to lose and if you lost that amount, call it a day.
Sounds simple enough. But when you’re out of chips and faced with the decision of whether you should try and win your money back or accept your losses, things can often go either way.
Most intelligent beings can accept the mathematics of the situation, namely that you are down $x. It is also quite obvious that changing another $100 will mean you could potentially be down $(x+100). However, what makes you willing to risk that extra $100 is the fact that instead of being down by $(x+100), you could potentially recoup your initial loss of $x, or if your luck really turns around, you could even be up by a potentially infinite amount.
To put it simply, when you’ve lost all the money within your gambling budget, you always ask yourself this question:
What will happen if I change another $x? I may lose it all. But I may also win back my money.
Now, there is no need to start spouting odds or calculating probabilities. It is irrelevant how high your chances actually are of winning or losing that additional amount. Very often, the main thing that catalyses the act of changing more money (and thus exceeding your budget) is the uncertainty of what will happen if you change the money.
Even if your brain tells you you’ve already lost money and shouldn’t risk more, and even if you know very well that your luck is poor that day and you’re not likely to win much more, it is the torment of not knowing what would have happened if you had changed another $x that will often break even the most resolutely-held budgets.
When faced with difficult decisions, it is human nature to try to predict what may happen as a consequence of making either choice. Often, after electing to make a certain decision, a person is tormented by the consequences that making the alternative choice would have produced. When they say the grass is greener on the other side, the ‘other side’ is that other choice, the one you didn’t make.
When the gambler who’s just lost everything in his budget is called upon to decide between changing more money or not, he already knows the consequences of one of the choices–walking away having lost everything he agreed to lose. It is the consequences of the other choice, changing more money, that remains a mystery. And dying to know whether that consequence would have allowed him to win back his money is what makes many a gambler plonk down the extra cash.
Be kind and give yourself a second chance
First things first, I am not saying you should change another $500 if you’ve already lost your entire gambling budget of $500.
Since we’ve established that people often exceed their gambling budgets because of a burning curiosity to see what would happen if they changed money again, the best way to combat that is to allow yourself to change another sum of money if you lose–but factor that sum into your gambling budget.
For instance, if your budget is $150, instead of changing $150 all at one go, you could change $100 (the initial injection) first, treating that as you would your entire budget, and leaving $50 (the rebuy amount) for emergencies. If you win money, obviously there is no need to change anymore. If you lose less than $100–suppose you lose $70 and are left with $30, you can decide whether you wish to stop playing right then and there, or wager the remaining $30.
Some of you may decide to break $150 into two sums of $75 instead. Do whatever works best for you, but I prefer to let the initial injection ($100) be larger than the rebuy amount ($50) because it is more effective in preventing further rebuys, as explained later.
When you’ve lost
It is only when you’ve lost your initial injection of $100 that the extra $50 comes in handy. If, after losing the $100 you are still dying to know if you can recoup some of your losses, change the extra $50 and see what happens.
Two possible scenarios may arise:
1) You win money, which may or may not be enough to cover your previous loss of $100. Whatever the case, at least you’ll leave with more than you would have if you hadn’t changed the $50. You can now go home pleased that you made the right decision.
2) You lose the $50, bringing your losses to a total of $150. Since the $50 was taken out of your original gambling budget of $150 (before you decided to break it up into $100 and $50), you have not exceeded your budget.
Now, I’m sure some smartasses will say that after losing the $150, you’ll be tempted once again to see what will happen if you change another $x.
Initially, after losing your first $100, you will be faced with two somewhat equal choices: to change an additional $x which you may win or lose, or not to change the $x.
However, after you’ve changed the extra $50, the two choices no longer seem as equal as before. Since you’ve already changed money twice, and lost both times, it appears that given your current run of luck, changing money a third time would also result in a loss.
Furthermore, people usually change the most money before they start playing; subsequent rebuys after losing money generally involve lower sums. Now that you have already lost $150, you probably wouldn’t want to change another $100 (equal to the initial injection) for fear of losing way too much than you were prepared that day.
On the other hand, since you’re already down $150, changing $50 doesn’t seem like it would help much in helping you recoup your losses as you’d have to win three times that amount. This is why I prefer to split my budget into a larger initial sum and a smaller subsequent rebuy. It helps you start thinking of possible rebuys as smaller sums, and makes it more unlikely you’ll want to rebuy more than once, since rebuys are small relative to your total losses and this makes the likelihood of recouping your losses more unlikely.
Remember, recreational gambling is supposed to enrich our lives and make us happy! If the amount of money you’re losing is stressing you out, it’s time to rethink your budget.