For the tenth time, you’ve left your entire stake in the casino, while your friend told you yesterday that he’s already won twice in the last week. Is it possible that some people win while others lose money on a regular basis? Why does this happen? And is it even possible to protect oneself from something like this? We will answer these and other questions with this article, which is entirely focused on an issue called variance.
What is variance (definition)?
Variance is the deviation from the average. Variance tells us how far the measured values are from the normal, that is, the statistically given mean. In other words, variance is something that deviates from the normal.
What is variance in a bit more human terms
Describing variance in human terms rather than statistical or mathematical terms will certainly be more helpful. In human terms, variance is something that brings us unpredictable phenomena. For example, variance can cause two white parents to have a dark-skinned child without the mother having to be unfaithful to her partner.
In society, it is expected that a white-skinned parent will have a white child, but even in these situations, statistically, once in a while, it can happen that a gene is “skipped” and therefore the child will have a dark skin. And this is the variance. A deviation from the normal functioning of the world. Some people also call it, for example, a coincidence.
The implication is that if you are sitting at a slot machine and you can’t win, you have just been hit by negative variance. And vice versa. If your friend sent money to an online casino for the first time and hit an interesting win twice in the first three spins, he or she is again experiencing variance in a positive sense.
Depending on the situation, the variance is then pleasant/unpleasant, but the main thing is that in the long run this extreme always evens out somehow.
Variance in the long run
Variance in the sense we have outlined above usually occurs in the short term in online casinos. Over a longer period of time, the variation in results on both sides then evens out and we return to the overall average.
Let’s explain this with an example, ideally on a coin flip.
We all know that the probability of coming up heads or tails is exactly the same, which is also why the coin toss is used to decide certain situations. A coin flip is simply completely unpredictable and, given the even odds, fair to both sides.
But what happens if we flip a coin five times in a row? In this case, of course, we can expect different results, from five consecutive heads to five consecutive tails. Indeed, it is very likely that we would get five consecutive heads or five consecutive tails, or any kind of heads and tails advantage, i.e. we would get an uneven ratio of heads to tails, for example 80 to 20 or 60 to 40 (plus of course 100 to 0).
However, if we flip a given coin regularly, over a period of days or weeks, and if we collect a sufficient number of flips, say 1,000 or 10,000, then the odds of seeing either option prevail decrease dramatically.
Basically, there is a direct proportionality that the more results we have in a given series, the more likely we are to see a tie.
Of course, even within 1,000 rolls, once in a while one of the values may have a significant advantage, but the probability is significantly less than that it will happen within 100 rolls (and of course significantly more than it will happen within 10,000 rolls, etc.).
Variance – conclusion
So, going back to the beginning of our article, where we mentioned the situation where you left money in the casino several times in a row while your friend won twice in a row, we come to a pretty easy conclusion here, variance is to blame for everything.
Variance, or chance if you will, has just caused you to be very unlucky while your friend is very lucky. It may be unpleasant, but wish him well. It is the variance that will eventually ensure that while your friend loses several times in a row in the casino, you will celebrate two beautiful wins in a row. At least, assuming you keep playing, because regularity is something that variance can never beat. Because in the long run, everyone gets what’s coming to them in the casino.
