Calculate your expected returns and risk with our Gambler’s Calculation Calculator. Enter your bet amount, win probability, and payout ratio for the basic calculator or use the advanced calculator for more complex scenarios involving multiple bets.

Expected Return Calculation Formula

The following formula is used to calculate the expected return from gambling activities:

Expected Return = Bet Amount * (Win Probability * Payout Ratio - (1 - Win Probability))

Variables:

  • Bet Amount is the amount of money placed on a bet ($)
  • Win Probability is the likelihood of winning the bet (%)
  • Payout Ratio is the ratio of the amount paid out for a winning bet compared to the bet amount (Decimal)

To calculate the expected return, multiply the bet amount by the difference between the win probability times the payout ratio and the probability of losing.

What is Gambler’s Calculation?

Gambler’s calculation refers to the mathematical process used to determine the expected return from gambling bets. This involves calculating the potential returns based on the probability of winning and the payout ratio. Understanding these calculations helps gamblers make informed decisions about their bets and manage their risk effectively.

How to Calculate Expected Return?

Follow these steps to calculate the expected return:

  1. Determine the amount you are betting.
  2. Estimate the probability of winning the bet.
  3. Identify the payout ratio for the bet.
  4. Apply the formula: Expected Return = Bet Amount * (Win Probability * Payout Ratio – (1 – Win Probability)).
  5. Input the values into the calculator above to verify your results.

Example Problem:

Use the following variables as an example problem to test your understanding.

Bet Amount = $100

Win Probability = 30%

Payout Ratio = 2.5

FAQ

1. What is an expected return?

Expected return is the average amount you can expect to win or lose per bet over the long term, based on the probability of winning and the payout ratio.

2. How do I use the expected return to manage my bets?

By calculating the expected return, you can gauge whether a bet is profitable in the long run. Positive expected return indicates a favorable bet, while negative expected return suggests a potential loss.

3. Can the expected return be negative?

Yes, if the expected return is negative, it means that, on average, you will lose money on that bet.

4. How can I improve my chances of having a positive expected return?

Improving your chances involves finding bets with favorable odds, understanding the game or event you’re betting on, and managing your bankroll effectively.

5. Is this calculator accurate for all types of gambling?

This calculator provides estimates based on the inputs provided. For specific gambling games, consider additional factors such as rules and game variations that might affect the actual return.