How Cognitive Biases Influence Your Betting Decisions

Our mentality in our formative years is mostly a product of everything that surrounds us while we are growing up. We inherit the religion we’re brought up under, we’re led to believe that milk is a good source of vitamin D, we’re taught that cereal is a healthy breakfast, that the bubonic plague passed through the air. Each era of humanity is full of bafflingly ridiculous misconceptions and we are not as separated from the Middle Ages in the modern era as we are wont to believe. 

When we have a lot on the line and the casino is really hectic, our connection to reason grows even weaker. With the clocks and the windows missing from the walls, we lose track to the ordinary and our everyday lives too. It’s the perfect milieu for our reptilian brains to go mad and emotional. A lot of misconceptions are birthed in this process, both based on positive and negative events. 

The more aware you become of your biases and weaknesses in advance though, the more of an opportunity you gain to disarm illogical fallacies by planning for them in advance.

Top Fallacies

These aren’t abstract academic concepts. Whenever money is on the table, people’s thinking starts to get a little bit weird. There exists a common set of mental traps that all people are vulnerable to thinking.

Law of Averages

It is true that when you count up all of the gamblers that play a particular game, the cumulative results will average out to a certain amount of money total paid out to players given a particular amount wagered. That figure is called return to player or RTP. However, that only becomes more true the larger the sample size. You as an individual player betting 200 dollars over a single day are not going to revert to the mean achievable for tens of thousands of dollars bet.

Most people fall into this bias that if they just lost 500 dollars at slots, and the RTP is 92%, that they have winnings around the corner that will eventually mirror the losses they just suffered. The volatility for one particular gambler, however, is going to be too high for that to be the case. You are not “due” for a win after losing 7 times, unless you are betting massive amounts of money over a long time.

In 1913 at the Monte Carlo Casino, the roulette wheel famously landed on black 26 times in a row. Players watching this rare streak poured their money onto red, convinced it had to come up next. Instead, black kept hitting, and gamblers lost millions in a single night. 

Confirmation Bias

Once we form an opinion, our reticular activation system leads us to find evidence for that belief. That’s because there is enough information out there to form any opinion about anything. We fail to see everything that goes agains that. A football fan that believes their team is better at every position due to how it’s performed this season so far can latch onto stats about the superstar forward but then disregard all the injuries that have happened on defense. This can cause a man like that too take a -2 handicap bet.

Just as if you’d won a hundred at 21 on a platform like Baji apps and 10x-ed the bet you may assume it’s a walk in the park, so you decide to bet 1,000 and biff it.

In 2015, after Cam Newton started slinging all over the league on track to becoming an MVP, people were enamored with his running and bombs, but they lost track of his inability to handle defensive pressure, which the Broncos later brought in the Super Bowl. Most people lost of ton of money betting in that game.

Overconfidence

Sometimes people just keep getting dealt good hand after good hand. Sometimes they lucked out on their bluff and some poor sucker really bought it. So they think they have some kind of uncany skills.  An example is Chris Moneymaker’s 2003 World Series of Poker win, which inspired thousands of amateurs to believe they could replicate his success.

Anchoring

People’s most vivid memories often form the first time they get into playing a game. Just because craps start out resulting in 4’s and 5’s again and again, doesn’t mean that represents a mode. But that’s what sticks in a lot of people’s minds more is what happened the first time they played. When there’s a slight favorite when the odds for a baseball game opens, betters fixate on that position, even if the weather starts to forecast rain and the opposite team may get extra time for their embattled relievers to recover.

Hindsight

After everything is said and done, it’s easy to say that we knew that was going to happen. In reality, there’s always a number of possibilities, none of them ever being certain. The problem though is people start to believe their sense for the game is better than it is, and they start betting foolishly.

Compensating for Losses

It’s one thing to be aware of biases, but it’s even worse when you know you have a problem and canot hold yourself back. Sometimes we’re distraught about the money we lost, but what’s gone is already gone. Betting more isn’t going to constitute work that earns our way back up to the amount we came with. Sometimes people dig their hole three times bigger.

Defenses Against Biases

It’s an important step when you are aware of destructive behaviors but developing a plan to guard against them and sticking to it is the rest of the battle. Very few people are able to avoid submitting to their reptilian brain at least sometimes but here are some wise strategies to keep on the straight and narrow.

Betting Journal

Write down every bet and the reasoning behind it. 

Data Over Instinct

Gut feelings empty your pockets faster than holes. What you need is statistics databases and betting models. This will keep you from being blind to how matchups are changing, especially when one of the teams is your favorite one.

Bankroll Rules

Set a certain budget for how much money you’re going to let yourself gamble on a particular day. Don’t let it be more than 10% of your regular income. Also commit yourself to not betting more than a percentage of  your budget at once to prevent overconfidence from exposing you.

Take Breaks After Wins and Losses

Biases take their power from heated emotions, good and bad. If you’re devastated or if you’re elated, in both situations, you’ll regain your basis in reality by taking a step back.

Establishing Limits With the Casino

A very trusty method, which casinos are required to oblige in most jurisdictons, is informing them of a stop limit for the amount that you’re able to bet in a certan game, the total number of bets in it, or total playing time. If you’ve decided you’ve already gambled enough but you keep giving in and gambling again, you have the right to self-exclusion too.