The Million Dollar Mistake

How a fundamental lack of gambling theory education cost this woman the motherlode, and what our public school system can do about it.

Most of us, if pressed about our right to gamble, would reason that its a private choice, made by an adult, that shouldn’t be subject to legislation, prohibition or moral judgments.

I’d like to go one step further: Simple gambling theory should be taught in our school system starting in the 7th grade, accelerating to more sophisticated gambling theory concepts as one matures through high school and into college.

Why?

* It prepares our youth with the critical thinking skills they will need as adults

* It teaches an analytical, unemotional approach to money and encourages responsibility in personal finance

* It can make learning (especially a course in Statistics) fun and easier to comprehend.

CASE IN POINT:

ABC’s hit game show, “Who Wants To Be a Millionaire” may have already enjoyed its 15 minutes of fame. It seems to have fallen victim to our culture’s depraved attention span. The mistakes made by the contestants, however, seem limitless in the scope of their stupidity.

As a disclaimer, its important to note that no one gets to sit in that chair with a shot at all that money by being inherently stupid. The pre-show screening process tests ones knowledge and diligence. Once a contestant is on the show, the fast-fingered round dictates that only the quickest of thinkers gets to a chance in the spotlight.

However, one only needs to look at the the mistakes routinely made by the contestants to see what an utter and complete failure our government (AKA “public”) school system is.

If you are unfamiliar with how the show works, its simple: Each question is worth twice as much as the last, and if you miss any question above the $34,000 level, then you loose everything you’ve won DOWN to $34,000. This makes the 6 figure rounds intriguing. Part of the shows appeal is the inherent gambling that must come at the higher levels. Answering a question wrong has its consequence. The more questions you answer correctly, the higher the price becomes for mising.

The questions are multiple choice, and after hearing the question, if the contestant is unsure, he or she may back out and receive the amount of money the current level dictates. If they answer incorrectly, a substantial portion of your winnings could be lost, depending on where you are on the “money ladder”. For a more in depth explanation of the rules, see the Who Wants to Be a Millionaire website.

Recently, a very bright, jovial and articulate woman got a chance to answer the questions. She struggled her way to the $128,000 level, but became stumped with a geography question. She had a “hunch” about the answer, but decided to use her last “life line” to help her answer the question. She called for the “50/50”, which removes 2 of the 4 answers, leaving only the correct answer and one other to choose from.

The computer removed two of the wrong answers, and one of her “hunches” remained, along with one other selection. She’s already won $64,000, and a wrong answer here sends her home with $32,000 — certainly more than she came with, but not quite the 1 Million Dollars the show is named for.


QUICK! What would you do?

For anyone that’s ever attempted to further their gambling education, the choice is simple.

Lets review her choices and their consequences:

1. Stop right now, don’t answer the question and walk away with the $64,000.

or…

2. Guess:
A. If her answer is wrong: She goes home with only $32,000
B. If her answer is correct: She wins another $64,000 and her total is $128,000 and her potential win (what the professional gamblers call “expected value”) is $1,000,000.

Simple, right?

Its a 50/50 proposition – there are only two answers. Actually, she’s a bigger favorite than even money since she has a “hunch” or gut instinct that one of the answers is right.

If she guesses correctly, the next question may be something she knows for sure. She could be on her way to a million bucks.

Basically, at the VERY WORST, she was getting laid $64,000 (This is the very minumum she would win if her answer is correct: She will gross $128,000, but $32,000 is guaranteed which leaves a $96k net win) to $32,000 (the most she will loose – BUT she currently can walk away with $64,000 if she doesn’t attempt to answer the question).

Evidently, getting laid anywhere from 2:1 ($64k vs. $32k) all the way up to 31.25:1 ($1 Million vs. $32k) wasn’t enough of an edge for this woman.

She happily took the $64,000 without much deliberation. There are people that would drive all over the world to get laid 2:1 on an even money proposition. Bookmakers make plenty of money getting laid only 11:10 on the theoretical flip of a coin.

In gambling and in life, when we make a bad decision, we are usually punished severely for it. This was no exception.

After accepting her “big” win and congratulations from Regis, Regis reveals which of the remaining two answers were correct. Her “hunch”, of course, was correct.

This isn’t about hunches though, and you can throw out the potential win of a million dollars. It was about getting laid 2:1 on the toss of a coin and letting fear get in the way of rational thought. Her life could have been changed. Her expected value was astronomically high. Is that extra $32k really going to change her lifestyle?

This woman didn’t even meditate on what to do. Her decision to walk with the $64,000 seemed to take around 30 seconds.

A once in a lifetime shot at a $1,000,000 (plus all the fame and aggravation that comes along with it), and she relied on her public, government, taxpayer bought education and simply made a very, very expensive mistake.

The ironic thing, of course is this:

While the decision to guess was immediately intuitive to me (and probably you as well), I could spend the rest of my life attempting to get on that show and never succeed.

Doyle Brunson said in his famous treatise on poker that if all he had in the world was a million dollars, and someone offered to bet him $2 Million to his $1 Million on the flip of coin toss: he’d do it — even if it left him broke.

His logic was simple: He was getting laid 2:1 on a 50:50 proposition. He also claims to have enough confidence in his ability (if he were to loose) to go find another million or so and flip the coin again.

This commonsense approach to gambling and life unfortunately will never make into our public education system. As our law makers peddle individual security over individual freedom and rational thought, look for more of the same from ABC’s hit show.

The price of an education without gambling theory came at a high price to our jovial, articulate and intelligent female contestant.

A very high price indeed.
thedailyspread.com | January 26th, 2001

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