Have you ever had a moment in your life where luck just seemed to be on your side and no matter what happened, you came out on top in some way? For those who like to gamble, you probably know this as a ‘hot streak’ or ‘hot hand.’ The idea is that when you get lucky consecutive times, there’s a good chance that luck will keep happening.
At first, it might seem like this type of phenomena is just that: luck. But a recent study focused around online gambling has discovered that ‘hot hands’ are actually a very real thing. When a person won a bet they had placed, their chances of winning again went up. At the same time, people who lost their bets had a greater chance of losing any more bets that they placed.
After analyzing 565,915 sports bets placed by 776 different online players throughout Europe and the U.S., they found that you have an equal chance of winning or losing, at around 48 percent for each (with the remaining 2 percent from each pool resulting from draws). So, when you start gambling, your chances are about 50/50, as one might expect.
But, after that first bet is placed, your chances shift either up or down. If you win, that 48 percent chance of winning again jumps up a tiny bit to 49 percent. However, after a second consecutive win, your chances of winning a third bet jumps to an impressive 57 percent. Then to 67 percent. Then to 72 percent. Then to 75 percent. Then, should you win your sixth bet, your chances of nailing the seventh goes up a small amount to 76%.
Crazy, right? Not as crazy as you might think. The theory is that after a player wins a hand, their fear of losing their next hand goes up, so they make a “safer” bet the second time. After each consecutive win, players continued making safer and safer bets in an effort to counteract their chances of losing.
Published in Cognition journal, the study also found that the opposite was true. When players lost their first and second bets, their chances of winning dropped from 48 percent to 40 percent. After losing four times, their chances of winning dropped to 27 percent. After six losses, their chances of winning dropped to 23 percent.
The theory behind this is that players would typically place bets that had a lower chance of success, but a higher payout if they won, and almost all of them expected to win because they’d lost the previous hand. (Of course, it was also seen that, on average, players tend to gamble less on the next hand following a loss).
The entire phenomena has been described as “The Gambler’s Fallacy.” This idea says that whether you win or lose, you believe that your next bet will likely result in the opposite of what happened during your first bet (even though there’s an equal chance every single time).
"The result is ironic: Winners worried their good luck was not going to continue, so they selected safer odds," the researchers wrote. "By doing so, they became more likely to win. The losers expected the luck to turn, so they took riskier odds. However, this made them even more likely to lose. The gamblers’ fallacy created the hot hand."
What do you think about this phenomena? Have you ever had a ‘hot streak’ or a ‘cold streak’ while gambling or placing bets?