While gambling is largely luck based, there are certain ways to increase your chances of winning. While there are various ‘quick fixes’ for successful gameplay, risk intelligence can be used for continuous, long-term success. But what is risk intelligence and how can you use it? In this article, we explore how to develop effective risk intelligence in gambling.
Risk intelligence is best described as the ability to make accurate probability estimates. It can be measured by a simple test, the results of which are then analysed.
Risk intelligence was first discovered in the 1960s when two American psychologists studied a group of gamblers. The men were avid racetrack enthusiasts and were studied over a four-year period. While none of the men earned their living by gambling, they all attended races almost every day in order to bet. Over the course of the study, it was discovered that some of the men were significantly better at estimating the chance that a given horse would win a race. The psychologists then tried to figure out whether there is a fundamental cognitive ability that allowed certain people to gamble successfully. This concept is now known as ‘risk intelligence’.
So how do you test risk intelligence? To begin, you’ll need a set of predictions relevant to your chosen game. For instance, in horse racing, predictions are based upon which horse will win. Once you’ve made your predictions, you’ll need to list the probabilities for the various outcomes and assign them a percentage. At this stage, you should have a chance in a percentage that a certain horse will win. Most people find it best to assign percentages in multiples of ten.
Once the results are in, the horses that win or lose can be placed into specific groups. For instance, horses that have a 20% chance of winning, 30%, and so on. The whole process is then repeated using the data from the previous race. After a while, you’ll begin to build effective risk intelligence.
After studying the gamblers, the psychologists decided to look into risk intelligence on a deeper level. They decided to find out whether the theory could apply to other professionals, such as doctors and weather forecasters. After looking into the statistics, it was clear that weather forecasters had far more success at estimating probabilities than doctors. But why was this?
One of the main reasons is that weather forecasters have a repetitive job with minor degrees in variability; in other words, there are fewer things to predict so they have a greater chance of guessing accurately. Secondly, weather forecasters have far more data to look back on with fewer degrees of uncertainty. This point demonstrates that risk intelligence is built on the level of data accumulated. Thirdly, weather forecasters have clearly defined feedback that is received quickly. With doctors, that’s not always the case. When a doctor makes a diagnosis, the patient is unlikely to return to the clinic if they make a full recovery. However, not returning to the clinic does not necessarily mean that the doctor’s diagnosis was correct. With this in mind, it’s much harder for doctors to collect accurate data and build risk intelligence. When building risk intelligence, quick and concise feedback is key. For best results, the amount of time between the prediction and the outcome should be kept to a minimum. Repetition, sufficient data, and timely feedback are all needed to determine and improve one’s risk intelligence.
When it comes to gambling, risk intelligence can be beneficial. Those who have a higher level of risk intelligence are more likely to make sensible decisions and win more money. If a gambler is offered 5:1 odds for a particular outcome, the probability of this outcome is 20% or less. This means that the odds are high to the gambler, so making the bet would appear to be a bad choice. However, in reality, the chance of winning could be as high as 30%. In the world of betting, this is known as overlay. In this case, the odds listed are actually in greater favour to the player than the casino. If a gambler has good risk intelligence, they will have an advantage against both the bookmaker and the other players. Bookmakers build an advantage over players by collecting more information to evaluate the odds; however, their knowledge often wears thin. With so many events to consider, they don’t have the manpower to focus on one specific area. Gamblers, on the other hand, can concentrate on a single game, event, or sport to build a higher level of risk intelligence.
Software tools can also be used to build risk intelligence. Many gamblers consider these to be an invaluable method of estimating risk factors, whether it be for slot machines, blackjack, poker, or any other casino game. In most cases, computers can calculate the odds quicker and more effectively than humans without running the risk of human error.
If you’re hoping to build effective risk intelligence in gambling, take note of the advice above. Most gamblers find it best to focus on one specific game or event. This way, you can hone your craft and have an advantage over casinos, bookmakers, and fellow gamblers. If you’re struggling to build risk intelligence, there are various software tools that can be used to calculate the odds for you. Many of these are available online for free. If you do choose to use software, remember to customise the program for the event or game on which you choose to bet.