# When in doubt, go back to the basics

Jan 21, 2003 1:23 AM

1. The GamblerÂ¡Â¦s Ruin Problem.

This problem was stated and answered several hundred years ago by the French mathematician DeLambert. What does it say? It says that if you are wagering against an opponent who has a much larger bankroll than you do, even if the game you are playing is a "fair" game (the odds of winning are equal for both players) that you will sooner or later go broke. This is established fact. You cannot avoid it. Ignore it at peril to your pocketbook. There are many proofs available both on the Internet and in your public library.

2. Taxes.

In Keno you are required to report net winnings of \$1,500 or more, or on Keno machines winnings of \$1,200 or more. This does not release you from the responsibility of reporting (and paying taxes on) winnings of lesser amounts. According to the I.R.S., all gaming winnings of any size are considered to be taxable income.

3. Winning streaks.

Winning streaks (and losing streaks) are not uncommon; as a matter of fact streaks persist far longer than most people would imagine. The good news is that if you are in the midst of a winning streak, it may continue for a while longer. The bad news is it may end right now- and the consequent losing streak will most likely last a while also.

See "Theory of Gambling and Statistical Logic." This topic is covered quite well.

4. Random numbers

In the world of computing, a truly random number is a rare commodity. In most cases what we see are "pseudo-random" numbers. These number sets are produced by mathematical algorithms. One characteristic of these pseudo-random sequences is that they repeat after a certain number of iterations. A robust random number generator produces sequences that repeat after hundreds of millions (or many more) iterations. Can you predict such a sequence? Yes, in theory, if you know the algorithm and the initial seed number. Have there ever been "broken" RPGs in action? Yes. Are you likely to find one? No.

See "Theory of Computation" by Knuth.

5. More taxes.

Yes, you can deduct gaming losses IF you itemize your deductions AND the losses are greater than your standard deduction. You CANNOT deduct gaming losses if you file a 1040EZ. DonÂ¡Â¦t believe me? Call the IRS.

6. Professional gamblers.

There arenÂ¡Â¦t very many of these, really. Sleeping in the park gets a little old after a while, even if there are pleasant interludes of good fortune.

7. Poker is a game of skill.

Tell that to my hole cards, they donÂ¡Â¦t listen to me.

8. ThereÂ¡Â¦s this book that tells me how to win at Keno