Statistical Estimation of Gambling Outcomes

Abstract

A review of the literature affirms the popularity of casinos and online betting. Despite the dangers inherent in gambling, players are attracted to games of chance for excitement and because of the potential for monetary rewards. Of course, the potential for monetary losses is greater than the potential for gains, and the wise player will study the risk/reward ratio in order to minimize losses. In this industry commentary article, we use applications of house edge in casinos, and overround in sports betting, to demonstrate ways that gambling institutions ensure a high gross profit margin.