There is a massive trade off in gambling with regards how much you are prepared to risk compared to how much you can win or lose. I will quote an example here to show you what I mean. Let us say that you offered someone a betting proposition that went along the following lines. You placed ten balls into a bag and nine were white and one was black. Let us then say that you offered to bet his person that if they drew a white ball out of the bag then you would pay them $10 but if they drew the black ball then they had to pay you $10.
Most reasonably intelligent people would take the bet because their chances of winning are 90% or nine times out of ten. Over an average ten events they win $90 and lose $10 for a profit of $80 or $8 per pick. So we can express this as EV and say that the EV or expected value for one pick is +$8. However if you offered many of the same people who would take that wager another different wager then another picture would immerge.
Let us then say that you offered this person the same type of bet but there were now five white balls and five black balls. But if they picked a white ball then you paid them $1000 while they had to pay you $800 if they picked a black ball. Without going into the finer details, you would record an expected profit over ten events of $1000 ($5000 – $4000) or $100 per pick. This is vastly superior to the previous bet but most people would turn it down. The reason is the fear of loss and it is this that is hugely evident in all forms of gambling. You cannot make the big money playing scared. This applies in poker as well as other gambling activities. They simply do not see the value and all they see is those potential $800 losses of they draw a black ball.
